Employer of record in Alaska: PEO rules, payroll registration and what the client still owns (2026)

Alaska has no law that licenses or registers professional employer organizations (PEOs), employee leasing companies or employers of record, as of November 2026: neither the Employment Security Act (AS 23.20) nor the Workers' Compensation Act (AS 23.30) has a PEO or leasing chapter, and the only mention of leased labor is the ban on "deceptive leasing practices" in AS 23.30.250. What Alaska does have is an unusual unemployment rule. The Department of Labor and Workforce Development says that when a business supplements its staff or hands its HR functions to another company, the business is "in most cases" the liable employer and the wages go under its own Alaska unemployment insurance account, not the provider's. Workers' compensation must be an Alaska policy from the first employee, and there is no state income tax to withhold.

This page is for a company outside Alaska, or a staffing firm, deciding whether to employ someone in Alaska through an employer of record (EOR) or PEO, or to register itself. The general difference between an EOR, a PEO, a staffing agency and payrolling is in what is an employer of record and payrolling services explained. The employment agency permit and its open question for temp firms are in staffing agency license in Alaska, and the full state checklist is in hiring employees in Alaska.

Alaska employer of record and PEO rules at a glance

Does Alaska license employer of record companies or PEOs?

No. Neither the Employment Security Act (AS 23.20) nor the Workers' Compensation Act (AS 23.30) regulates professional employer organizations or employee leasing beyond one fraud provision, and their regulations (8 AAC 85 and 8 AAC 45) are silent too. Our Alaska staffing license guide found no PEO registration anywhere in the statutes. So there is no registration number to ask for and no state list of PEOs to check. Two Alaska laws still reach a provider:

• The business license. AS 43.70.020 says "For the privilege of engaging in a business in the state, a person shall first apply" for a license, and AS 43.70.030 sets the fee at $50 a year.
• The employment agency permit. AS 23.15.340 requires a permit "In order to operate an employment agency," and AS 23.15.520 defines one as "a person engaged in the business of furnishing employment or help." The statute has no exclusion for firms that supply their own employees to clients, and we found no department statement on whether it covers EORs or PEOs. A provider that has thought about Alaska should be able to tell you why it does or does not hold one.

What if the provider calls itself an employer of record?

The label matters less in Alaska than in states with a PEO act, because Alaska decides who the employer is with its own tests:

1. Unemployment. Under 8 AAC 85.015(a), an individual is considered an employee of an employing unit if it "is the direct beneficiary of services," the services are "within the usual course and places of the employing unit's business," or it "exercises or has the right to exercise direction and control over the day-to-day duties." Any one is enough. A client that directs the work of a worker doing its business meets all three.
2. Workers' compensation. The Workers' Compensation Division's Employer's Guide to the Alaska Workers' Compensation Act (revised September 2022) says deceptive leasing practices occur when, to avoid premiums, "a person, business, or professional employer organization engaged in the business of leasing employee labor (1) purports to be the sole employer of the leased employee, and (2) fails to report client names and effective coverage dates to the carrier and division."
3. Federal payroll taxes. The IRS says that when a business outsources payroll, it "generally remains responsible for paying taxes and filing returns," unless the provider is a certified PEO; see the IRS's CPEO public listings.

The practical result: an EOR contract can move the payroll work, but it does not make the provider the only employer in Alaska's eyes.

Who pays Alaska unemployment tax on an EOR or PEO worker?

In most cases, you do, through your own account. The Employment Security Tax section's guidance on supplemental and leasing worker reporting (revision dated 4/20) covers both staffing and HR outsourcing. It says "the job(s) filled by the contracting of these worker(s) belongs to the employer supplementing their workforce," which "is therefore the liable employer," and "those wages must be reported to its account, not under the account of the company supplying the workers or HR functions." It cites AS 23.20.525(a)(8), AS 23.20.180, Article 4 of AS 23.20 and 8 AAC 85.015. The mechanics:

• Who files. "The supplemental worker's wages must be reported under the Employer's account by either: the Employer or the Staffing/Leasing Business."
• If the provider files, it needs your account number and yearly tax rate. You can give them to it directly, or file a power of attorney with Employment Security Tax (the guidance says to select item 6) so the section gives the provider your number and rate each year until you revoke it. The provider reports on the Supplemental Form (TSUP).
• If you file, you add the wages to your Alaska Quarterly Contribution Report or submit a supplemental report through TaxWeb.
• Due date. For an employer with a tax rate, the tax "is due the end of the month following the quarter the wages are reportable."
• Liability stays with you. "For UI purposes the Employer is liable for both ensuring wages are reported properly and taxes are paid on their account."

Coverage starts early. Under AS 23.20.520(10), an employer is an employing unit that "for some portion of a day within the calendar year has or had in employment one or more individuals," and AS 23.20.525(a)(9) covers a worker whose service is localized in Alaska, which includes a remote employee working from home there. On top of the employer's rate, the 2026 rate page says "The 2026 Employee Rate is 0.50%" on a taxable wage base of $54,200, so the payroll has to deduct the employee share. If your contract assumes the provider will report your Alaska worker under its own account, as it might in Georgia or Alabama, raise it before you sign.

Who carries workers' compensation in Alaska?

The employer, and the statute does not split the duty between a provider and a client. AS 23.30.045(a) says "An employer is liable for and shall secure the payment to employees of the compensation payable" under the Act, and AS 23.30.075(a) requires each employer to insure with a company authorized in Alaska or prove it can pay directly. An employer convicted of failing to insure faces a $10,000 fine and up to a year in jail under AS 23.30.075(b). Four Alaska points matter for an out-of-state client:

• One employee is enough. The division says the Act "requires each employer having one or more employees in Alaska to obtain workers' compensation insurance," unless approved to self-insure.
• No reciprocity. The same page says Alaska has no reciprocity agreements, which "includes an out-of-state employer with employees working in Alaska," and the policy must come from an insurer admitted in Alaska.
• Leasing is policed as fraud. A leasing company that, to avoid premiums, claims to be the sole employer without reporting its clients and coverage dates (the division's definition, above) is civilly liable and "guilty of theft by deception" under AS 23.30.250(a)(3).
• No PEO allocation. Unlike states with PEO acts, the Act does not say how liability and the exclusive remedy of AS 23.30.055 are shared between a client and a leasing company, so ask counsel before relying on the provider's policy alone.

Check coverage yourself: the division says whether a business "is or was insured for workers' compensation liability is a matter of public record in Alaska," and its online verification page links to the coverage search. The insured employer must also post the notice of insurance "in three conspicuous places" under AS 23.30.060(b); for a remote worker, ask how the provider will deliver it.

Which Alaska registrations, reports and notices still apply?

• No state withholding. Alaska repealed its individual income tax in 1980, so new hires complete only the federal W-4; check the tax rules of any other state the employee lives or works in.
• New-hire reporting. Under AS 25.27.075, an employer reporting on paper does so "not later than 20 days after the date of the hiring," and an electronic reporter sends two transmissions a month 12 to 16 days apart. An employer with employees in another state may instead report all hires electronically to one state after notifying the federal Department of Health and Human Services (AS 25.27.075(c)), so ask a national EOR which state it reports to.
• Unemployment notices. 8 AAC 85.060 requires the "Notice to Employees" poster where employees can see it, and written unemployment information to every separated employee within seven days of the last day worked. A person without an Alaska unemployment account number may not post the notice.
• Paid sick leave. Since July 1, 2025, employees accrue one hour per 30 worked. The department's sick leave FAQ says "Upon hire, employers are required to notify their employees in writing" of the entitlement, and the 40-hour or 56-hour annual cap depends on whether the employer has fewer than 15 full-time equivalents. Ask whose headcount the provider uses.
• E-Verify. No state mandate; see E-Verify requirements in Alaska.

What does the client company still own in Alaska?

More than in most states, because the unemployment account stays yours. Beyond that, hiring rules follow whoever recruits and decides, which is usually you:

• Job ads and pay questions. Alaska has no pay range posting or salary history law, but many candidates live in Washington, which requires pay ranges; see hiring employees in Alaska and pay transparency for remote jobs.
• Screening. No state ban-the-box law (see ban the box in Alaska), conviction-only state record releases and barrier-crime rules for care jobs (see Alaska background check laws), and the federal steps in the FCRA background check process.
• Drug testing. The voluntary AS 23.10.600 program protects only an employer that adopts the written policy; see Alaska drug testing laws.
• Interviews. One-party consent for recording, but Washington candidates need everyone's consent; see Alaska recording consent law for interviews.
• Non-competes. No statute; courts apply reasonableness factors and may rewrite an overbroad covenant; see Alaska non-compete law.
• Co-employment liability. See joint employer liability for staffing agencies.

When is registering your own company in Alaska the better route?

The gap is narrower in Alaska than elsewhere. Since the unemployment account will usually be yours anyway, and there is no income tax withholding account, registering yourself adds an Alaska workers' compensation policy, a business license, new-hire reports and a payroll that deducts the employee unemployment share and handles paid sick leave. That tends to win when you expect more than one Alaska hire, already run multi-state payroll or want one policy for all your Alaska work. An EOR still fits when you want benefits, payroll and onboarding handled for a single remote hire, as long as the contract reflects Alaska's rule that the wages go under your account.

Questions to ask an employer of record or PEO before signing for Alaska

1. Under whose Alaska unemployment account will our worker's wages be reported? If ours, will you file the TSUP supplemental reports, and do you need a power of attorney from us?
2. Who deducts and remits the 0.50% employee share, and who answers Employment Security Tax notices?
3. Whose workers' compensation policy covers our worker? Is it written by an insurer admitted in Alaska, and have you reported us and our coverage dates to the carrier and the division?
4. Can we confirm your current coverage in the division's online coverage search?
5. Do you hold an Alaska business license and, if you furnish workers to clients, an employment agency permit under AS 23.15.340? If not, why not?
6. Which state do you send new-hire reports to, and who posts or delivers the Alaska notices?
7. Whose headcount sets the paid sick leave cap, and who tracks accrual?
8. Are you an IRS-certified PEO, and who is liable for federal employment taxes if a deposit is missed?

Employer of record rules in other states: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia and Washington.