Alaska Workers’ Compensation

USTAX BAY
Apr 28
3 min read

A Complete Guide for Employers

Written by US Tax Bay

At US Tax Bay, we know compliance is critical to protecting your business. If you have employees in Alaska, understanding your workers' compensation obligations is essential. In this guide, we'll explain Alaska workers’ compensation laws, who must be covered, penalties for noncompliance, and how to secure a policy — so your business stays compliant and your workforce stays protected.

Is Workers’ Compensation Required in Alaska?

Yes.

Under Alaska law, every business with one or more employees must carry workers' compensation insurance. This includes both full-time and part-time employees. Workers’ compensation provides medical and wage benefits to employees injured on the job, helping protect both your staff and your business from major financial risk.

Which Workers Can Be Excluded from Coverage?

While most employees must be covered, Alaska law allows certain types of workers to be excluded from workers' compensation coverage, including:

Part-time babysitters
Domestic servants
Harvest and other seasonal agricultural help
Contracted entertainers
Taxi cab drivers (as defined by statute)
Commercial fishermen (as defined by statute)
Non-commercial cleaning employees
Sports officials at amateur sporting events
Professional hockey players and coaches with health insurance
Real estate agents working under contract
Transportation company drivers

Employers must carefully evaluate employee classifications. Misclassifying workers could result in serious fines and legal issues.

How to Buy Workers’ Compensation Insurance in Alaska

Alaska business owners can purchase workers’ compensation insurance through:

Private insurance companies, or
Competitive state insurance funds (typically used when businesses are classified as high-risk and unable to get private coverage).

At US Tax Bay, we help businesses find the right insurance solutions tailored to their needs — ensuring coverage that’s both compliant and affordable.

Penalties for Not Having Workers’ Compensation Insurance

Failing to comply with Alaska’s workers’ compensation laws can have severe consequences:

$1,000 fine per employee for each day without coverage
Criminal penalties: Up to $10,000 in fines and one year in jail
Forced business closure until compliance is achieved
Loss of eligibility for in-state job contracts
Full liability for any benefits owed to injured workers

Noncompliance is costly — both financially and legally. Ensuring you have proper coverage is not only smart; it’s required.

Death Benefits for Workers’ Families

In cases of fatal workplace injuries, Alaska law provides important support to surviving family members:

Weekly death benefits equal to the deceased employee’s total disability rate
$10,000 lump-sum payment to cover funeral expenses
$5,000 payment to the surviving spouse and/or children

This coverage ensures families are supported during an incredibly difficult time.