Out-of-State Employees: Minimum Wage and Overtime Exemption

Employers who hire out-of-state workers must comply with the state and local minimum wage and overtime exemption requirements based on where the employee resides.  If an employee is subject to more than one minimum wage requirement (i.e. federal, state and local), employers must pay the rate that is most generous to the employee.  As these rates are subject to change, they are not listed in this document. If you have questions, please reach out to UA HR.

 

Minimum Wage by State 

Exempt Salary Minimums by State 

MINIMUM WAGE:

More than 20 states and 27 local minimum wage rates increased on January 1st.  UA HR is checking for out-of-state employees on a regular basis to ensure the correct minimum wage is being paid.  However, when an out-of-state employee is hired, it is best practice to hire the employee at the correct rate of pay, rather than doing a retroactive salary change and payroll adjustment.

The below chart is a list of states and locales with minimum wage requirements different from Alaska and Federal minimum wage.  Please consult with UA HR for the correct minimum wage for these areas or if you are unsure if the employee resides in one of these areas. 

OVERTIME EXEMPTION:

The FLSA requires employers to pay overtime pay for all hours worked in excess of 40 in a workweek; however, exemptions from overtime requirements are allowed for certain employees who work in administrative, professional, and executive jobs (known as "exempt" employees).*

Five states currently have their own salary and duty tests for determining whether an employee is exempt from overtime under state rules. 

The states in the chart below have exempt salary thresholds different from the federal salary requirement of $684/week.*

*To be considered "exempt," these employees must generally satisfy three tests:

• Salary-level test - Currently, employers must pay employees a salary of at least $684 per week.
• Salary-basis test - With very limited exceptions, the employer must pay employees their full salary in any week they perform work, regardless of the quality or quantity of the work.
• Duties test - The employee's primary duties must meet certain criteria.

Note: There are also exemptions for outside sales and computer professional employees. For the outside sales employee exemption, there is no minimum salary requirement. For the computer professional employee exemption, the employee may be paid by salary.

Need additional help or have questions?

Please contact ua-compensation@alaska.edu for additional assistance.  

To contact other UA HR teams, please visit our Contact Us page at https://alaska.edu/hr/contact.php