Correction: Alaska’s minimum wage is $9.84 per hour, not $9.80. It rose by four cents per hour on Jan. 1 in an automatic inflation adjustment. This article has been updated to reflect the change.
The State of Alaska is banning mandatory tip-pooling starting this Friday, restoring labor protections revoked by the administration of President Donald Trump.
In a message published Thursday, the Alaska Department of Labor announced that Lt. Gov. Byron Mallott had signed new regulations to prohibit employers from forcibly redistributing tips among workers. The regulations become effective June 29.
While employees can voluntarily share tips, the regulation forbids businesses from requiring them to do so.
“Employers should not be allowed to confiscate tips,” said Labor Commissioner Heidi Drygas in a prepared statement. “These regulations ensure individuals working in Alaska continue to have the right to keep the income they earn through tips.”
The state’s move began after the Trump administration announced in December that it would roll back regulations that prohibit employers from forcing employees to share tips. Those regulations were enacted by the Obama administration in 2011.
Under the Trump administration’s move (which is still pending as it moves through the formal federal process), employers would be considered the “owners” of any tips collected by staff. Employers would thus be able to decide what happens to tips. They might even decide to keep them for themselves.
Alaska’s regulation stops that from happening within state borders and requires written notice of any tip-pooling arrangements. The state regulatory process started in January, soon after the Trump administration started the move.
In a public comment submitted to the state in February, the Economic Policy Institute estimated that Alaska employers would confiscate about $14.4 million in tips annually from their employees. That’s 36 percent of the $40.1 million that Alaska workers earn in tips each year, according to tax records.
The new regulation does not change existing state laws that require all employees to be paid at least minimum wage ($9.84 per hour) before tips are calculated. Unlike other states, Alaska does not allow employers to include tips in minimum-wage calculations.
• Contact reporter James Brooks at jbrooks@juneauempire.com or 523-2258.
