Employment and labor laws in Alabama [Updated 2024]

If you’re hiring in Montgomery, Birmingham, or anywhere else in Alabama, it’s critical to understand and comply with the relevant labor laws. Employment laws safeguard employees against discrimination and hazardous working conditions—and employers who violate these regulations face serious repercussions. 

Alabama ranks near the bottom of worker-friendly states in terms of wages, worker rights, and the right to organize. Applicable labor laws are a mix of constantly evolving federal, state, and even local regulations—and it’s important to keep track of them all. 

Looking to take the guesswork out of complying with Alabama’s labor regulations? Easily expand your business by using Rippling’s Professional Employer Organization service to handle your tax registration and management.

Employment vs. labor law: What’s the difference?

You’ll often hear the terms employment and labor law used interchangeably. While they have some similarities, they are legally distinct. The difference depends on the parties involved. If a matter pertains to the relationship between an employer and an individual, it generally falls under employment law. When the matter is between an employer and a group (like unions), you’re talking about labor law. 

What do employment and labor laws cover? These are the main areas: 

• Employment law covers areas such as hours, wages, overtime, recruitment, workplace discrimination, and retaliation.
• Labor law is a part of employment law, including union membership, dues, and collective bargaining negotiations.

Wages and hours in Alabama

According to the Alabama Department of Labor, the state doesn’t have its own regulations governing wages and hours. Employers must follow federal standards from the US Department of Labor’s Wage and Hours Division. 

Minimum wage in Alabama

Because Alabama doesn't have a minimum wage law, most employees in the state are eligible to receive the federal minimum wage rate of $7.25 per hour, per the Fair Labor Standards Act (FLSA).

For tipped employees, the minimum wage works differently. The hourly wage is $2.13 per hour, with tips making up the difference. The employer must make up the difference if the tips plus $2.13 are less than the federal minimum wage of $7.25. 

For workers under 20 years of age, the minimum wage is $4.25. This applies for their first 90 days of employment. After the first 90 days or when the worker turns 20, they are entitled to the federal minimum wage. 

When establishing hourly wages for workers, Rippling can automatically flag minimum wage violations based on the state and federal regulations where employees are located—ensuring you remain compliant in Alabama.

Overtime pay in Alabama

Sometimes, employees have to work outside of their regular hours to complete a big project or deal with a temporary surge in business. In Alabama, the federal Fair Labor Standards Act regulates overtime rates.

Federal regulations require overtime to be paid at 1.5 times the employee’s regular rate for time exceeding 40 hours in seven consecutive days. In Alabama, there is no daily limit that triggers overtime. Some exceptions include executives, administrators, professionals earning over $455 per workweek, salespeople, and independent contractors. 

To comply with these overtime laws in Alabama, Rippling’s payroll software automatically applies the correct pay rates when an employee’s number of hours triggers overtime pay requirements.

Pay transparency in Alabama

Pay transparency is gaining ground across the US and around the world. Pay transparency aims to prevent wage inequality based on gender, age, and race—basically, equal pay for equal work.

In Alabama, the Clarke-Figures Equal Pay Act aims to address some of these issues. Under the act, Alabama employees may reveal and discuss their compensation. However, employers are not obligated to disclose salary ranges for job openings or reveal wage information to applicants or employees.

Employers aren’t allowed to retaliate against employees for sharing their salary histories. Penalties for employers found violating these regulations include paying the wages the employee should have received, plus interest, and double that amount as a penalty. 

Rippling enforces compensation bands during the hiring process and flags out-of-band adjustments, so you can accept special cases and block others as needed.

Breaks and rest periods in Alabama

In most cases, Alabama follows federal regulations regarding break times and rest periods. There is one exception. Under state law, employees who are 14 or 15 years old are entitled to a 30-minute break if they’ve worked more than five hours in a row. 

Federal law only offers guidance regarding work and meal breaks, but does not mandate them. The Fair Labor Standards Act suggests that 20-minute (or less) breaks should be counted as work time and that 30-minute (or more) meal breaks do not need to be paid. The employer, however, can offer employees a break structure that works for everyone. 

Leaves of absence in Alabama

There are situations when employees need to take time off work to tend to personal matters. It could be to seek medical treatment, take care of a relative, or recover from an illness. During those times, keeping one’s job should be the last thing on a person’s mind. That’s why there are regulations in place to protect employees’ jobs until they return to work. 

In Alabama, there are few state regulations covering leaves. However, the federal Family Medical Leave Act (FMLA) does allow some employees to take unpaid time off without jeopardizing their job. For FMLA eligibility, an employee must:

• Be employed by a covered employer
• Have worked at least 1,250 hours during the 12 months leading up to their leave date 
• Work at a location where the employer has 50 or more workers within 75 miles 
• Have worked for the employer for 12 months, although this does not have to be consecutive

Once these requirements are met, employees have the right to take 12 weeks of unpaid leave a year. This leave can be used: 

• To take medical leave when the employee can’t work because of a serious health condition
• To help care for an immediate family member with a serious health condition
• The birth, adoption, or foster care placement of a child (Note that Alabama’s Adoption Promotion Act mirrors FMLA leave for birth, adoption, and foster care placement and runs concurrently.) 
• Qualifying military reasons

Upon the conclusion of an employee's FMLA leave, they are entitled to reinstatement in either the same or a comparable position.

Pregnancy disability leave in Alabama

Alabama doesn't have a dedicated state law that provides pregnancy disability leave. But, unpaid leave may be available through the Adoption Promotion Act. It’s similar to the birth/adoption/foster care placement benefits of the FMLA and has the same qualifications. 

Paid sick leave in Alabama 

Employers in Alabama are not required to provide paid sick leave. They may choose to provide paid sick leave as part of a benefits package.

Jury duty in Alabama

Full-time employees are entitled to paid leave if selected for jury duty. 
With Rippling, you can automate and customize your leave policy, giving you complete insight into how your employees are utilizing it.

Workplace safety in Alabama

Employers are responsible for maintaining a safe working environment for their employees by providing safe equipment, instructing employees on safety plans, and setting up companywide safety policies. 

There is no state law overseeing workplace safety in Alabama. Instead, workplace safety is governed by regulations established by the federal Occupational Safety and Health Administration (OSHA). These laws are in place to protect employees from unsafe working conditions. Employers are required to provide their employees with a safe and secure work environment, per OSHA regulations.

In addition, the Alabama Child Labor Law enforces restrictions on minors, preventing them from engaging in hazardous occupations.

Rippling PEO offers a handy pay-as-you-go workers’ comp plan that doesn’t require you to pay upfront for the entire year, so you can grow your business in Alabama and elsewhere in the US. 

Discrimination and harassment laws in Alabama

With the exception of the Alabama Age Discrimination in Employment Act (AADEA), most of Alabama’s legal protections against discrimination and harassment are found in federal civil rights laws. These include the Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the National Labor Relations Act (NLRA). It’s illegal for employers to discriminate against or harass employees based on a range of factors, including:

• Race
• Ethnicity
• Ancestry
• Religion
• National origin
• Disability
• Sex
• Sexual orientation
• Gender
• Citizenship status
• Age (40 and over)

Laws against employment discrimination typically provide protection not just for current employees but also former employees—and even job applicants who have never been employed by the organization. 

Harassment occurs when an employee experiences unwelcome behavior rooted in the characteristics mentioned above. This can include offensive jokes, insults, racial or sexual slurs, physical or sexual assaults, verbal threats, inappropriate objects or images, and any other behavior that disrupts an employee's well-being and job performance.

Another situation that qualifies as harassment is when an employee is forced to endure an offensive environment as part of their employment. It's important to note that minor annoyances, like a one-off joke, are different from harassment. When offensive conduct is extreme enough to create a hostile work environment, it crosses over into illegal territory. 

Sexual harassment training requirements vary by state, and such training is not legally required in Alabama. Nevertheless, employers should offer sexual harassment training to mitigate legal risks—and as a best practice. Rippling’s Learning Management System is pre-loaded with core sexual harassment training courses to make sure each employee fulfills the state requirements based on where they live.

In Alabama—and federally—employers aren’t only responsible for the discrimination and harassment they commit; they’re also responsible for the behavior of their employees, regardless of whether they knew about it happening. Alabama takes workplace discrimination and harassment seriously, and violations can lead to hefty penalties.

Unions in Alabama

A labor union is an organization formed by employees who join together, or "act collectively," to advocate for improved working conditions, which may include increased wages, additional time off, and better benefits. The National Labor Relations Act (NLRA) guarantees workers the ability to:

• Organize or join a union in order to negotiate with their employer
• Bargain collectively by selecting employee representatives for an agreement outlining working conditions 
• Discuss their employment contract, terms, and conditions with fellow workers
• Improve working conditions by taking action and filing complaints with their employer or the government, or seeking assistance from a union
• Strike and picket, depending on the motive
• Abstain from becoming a member of a union

The NLRA prohibits unions from making job loss threats or undertaking adverse actions against employees if they don’t support the union. Similarly, employers can’t prohibit, discourage, bribe, fire, demote, or threaten employees who choose to support a union. 

Under Alabama’s right-to-work laws, employers can’t retaliate against employees because of membership or non-membership in any labor union or organization. Further, employers can’t require participation in a labor union or the payment of union dues as a condition of employment.

FAQs about Alabama labor and employment laws

Are independent contractors covered under Alabama employment laws?

No. If the worker is correctly classified as an independent contractor, they're not entitled to workers’ compensation, coverage under the federal Family and Medical Leave Act, or coverage under the Fair Labor Standards Act. Our analyzer tool can help you classify workers correctly and comply with Alabama’s employment regulations. 

Does at-will employment exist in Alabama?

Yes, at-will employment exists in Alabama. At-will employment means an employer can fire workers without notice, at any time, and for any reason. Employees may do the same with quitting.

What privacy rights do employees have in Alabama?

Alabama doesn’t have a comprehensive law that governs employee privacy rights. Audio and video recording in the workplace is legal as long as one party consents to it. 

Are background checks legal in Alabama?

Yes. Background checks are legal in Alabama, and there are no state restrictions. However, employers have to follow federal regulations in some cases. For example, the Fair Credit Reporting Act (FCRA) imposes time limits on credit information.

Are whistleblowers protected in Alabama?

It depends. The federal False Claims Act covers people who report fraud against the federal government, like Medicare fraud. In the private sector, there are few protections. Because Alabama is an at-will employment state, an employer could fire a worker for whistleblowing. State-specific protections only cover child labor, workers’ compensation claims, and age discrimination.

Is workers’ compensation coverage required in Alabama?

Yes, the Alabama Workers’ Compensation Law requires businesses that employ five or more employees to provide workers’ compensation insurance coverage. In cases where the employees are domestic workers, casual employees, or farm laborers, you’re not required to provide coverage. Failure to remain compliant can result in stiff fines and penalties.

Are there required healthcare benefits in Alabama?

Under federal law, employers with 50 or more full-time employees must provide certain health insurance benefits. Employers with less than 50 full-time employees don’t have to provide these benefits.

Are Alabama employers required to provide bereavement leave?

No. Employers in Alabama are not required to provide employees with bereavement leave or time off for funerals. Employers can offer bereavement leave as part of a benefits plan if they so choose. 

What employee protections are available in Alabama if layoffs occur?

If a business falls under the jurisdiction of the federal Worker Adjustment and Retraining Notification (WARN) Act, employees are entitled to receive a notice period of 60 days before being laid off, whether the layoff occurs in Alabama or any other location within the US.

Disclaimer: Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.