Alaska uses the ABC test to classify gig workers as employees or independent contractors under state labor laws, such as for unemployment insurance purposes. Workers are presumed employees unless all three prongs are met: free from the hiring entity’s control in performing the work, the service occurs outside the entity’s usual business course, and the worker customarily engages in an independent trade or business of the same nature. This test, outlined in Alaska Statute 23.20.525(a)(8)(A-C), applies strictly to gig economy roles like ride-sharing or delivery if the work integrates into the platform’s core operations.​
Key Classification Factors
Control (Prong A): Gig workers must operate independently without direction on how, when, or where to perform tasks, beyond results.​
Business Course (Prong B): Services cannot be central to the platform, such as driving for a ride-hailing app.​
Independent Trade (Prong C): Workers need evidence of offering similar services to multiple clients, like business licenses or other ongoing gigs.​
Federal FLSA rules also influence via economic reality factors like permanency and investment, but state ABC prevails for Alaska wage and unemployment claims. Misclassification risks penalties, back wages, and benefits like overtime.​
Gig Economy Implications
Platforms face challenges meeting Prong B, often leading to employee status and obligations for minimum wage, overtime, and taxes. Contact Alaska DOLWD Wage and Hour for audits or claims. Consult legal experts for specific cases, as 2025 updates emphasize compliance.​
SOURCES
[1](https://www.tcwglobal.com/usa-ic-compliance-guide)
[2](https://repository.uclawsf.edu/cgi/viewcontent.cgi?article=1216&context=hastings_business_law_journal)
[3](https://labor.alaska.gov/lss/forms/pam100.pdf)
[4](https://www.dol.gov/agencies/whd/flsa/misclassification)
[5](https://timeclick.com/how-to-classify-employees/)
