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Alaska raised its minimum wage, but some workers are still left out

  • Author: Annie Zak
  • Updated: May 31, 2016
  • Published April 17, 2016

Alaska's minimum wage went up again at the beginning of this year, but hundreds of students in the state university system still work jobs that pay less.

That's because the state government and public or quasi-public corporations are exempt from paying Alaska's minimum wage of $9.75 per hour and from paying overtime, relying instead on the federal minimum wage of $7.25 per hour as the base. That includes the University of Alaska system, which appears to be the only state entity in which that exemption is actively used.

The University of Alaska Anchorage, University of Alaska Fairbanks, University of Alaska Southeast and the university's statewide office pay a total of 482 student workers less than state minimum wage. The pay system, which groups jobs into tiers A, B or C, pays students base rates of $8.50, $9.50 and $10.50 per hour respectively.

There are also nine University of Alaska nonstudent workers who are making less than the state minimum wage.

"We certainly want to be competitive with other employers in the state and our local communities," said Sherri Soileau, payroll manager at the UAF, adding that university jobs provide other benefits to students. "Having a job on campus makes it much easier to wrap your schedule around your class schedule. There's a certain degree of flexibility."

State government employees and other state corporations are also exempt from the state minimum wage, but workers there are paid more than the minimum threshold.

In the state's legislative and executive branches, for example, the lowest pay rate is $13.70 per hour. For judicial employees, it's $17.19.

Representatives for the Alaska Railroad Corp., Alaska Energy Authority, the Alaska Industrial Development and Export Authority and the Alaska Housing Finance Corp. said all of their employees are paid above the state minimum.

There are also other groups of workers that are exempt, including agricultural and domestic service.

Tara Ferguson, director of classification and compensation for the university system, said the school has heard complaints from students about their pay being below the state's minimum wage.

"We have a lot of questioning since the minimum wage was raised last year and this year," Ferguson said. "Every year we do an analysis of student wages and compare to both state and federal. But with the extreme budget cuts with the state, we're unable to increase it at this time. That's really what it comes down to. It's not like we don't look at that, because students are a huge part of our workforce."

The cost of raising pay for all university students who are below state minimum wage to $9.75 would be $163,904, Ferguson said, adding that there could potentially be other costs as well.

Some students who make less than $9.75 from UA have jobs through work study.

Joe Dunham, a statewide supervising investigator with the Alaska Department of Labor and Workforce Development's Wage and Hour Administration, said the exemption exists basically so that if a state employee has a wage issue, they take it up in federal court instead of with the state.

"Generally, those who work for less than Alaska minimum wage, it's in conjunction with their schooling or it's something else for school," he said. "It would be unusual to have somebody working less than minimum wage at the school for a living. Usually there's some other reason why they're working there."

Soileau said there are also student workers on campus who are making well over $10.50 per hour.

"We have students doing fairly high-level work on campus," she said. "There's discretion on the part of the department."