Minimum Wage in Alabama: How Much to Pay Employees in Alabama

Wondering how much to pay employees in Alabama? Read our guide about Alabama minimum wage laws, rules for tipped employees, overtime pay and more. 


Note: The information below was last updated September 2021. 


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What is the minimum wage in Alabama? 

The current minimum wage in Alabama is $7.25 per hour for nonexempt employees. A full-time nonexempt employee in Alabama who works 40 hours in a workweek can earn no less than $290, or $15,080 per year. 


Alabama minimum wage laws

Alabama is one of a handful of states without its own minimum wage law, so the Fair Labor Standards Act (FLSA) automatically applies. This legislation is designed to protect workers against exploitation by employers and provide a minimum standard of living for all wage earners.


In accordance with federal law, most nonexempt employees in Alabama must be paid at least $7.25 per hour. This wage matches the federal minimum wage, which has remained unchanged since July 24, 2009. The U.S. Department of Labor’s Wage and Hour Division (WHD) enforces the FLSA, and employers found to be in violation of minimum wage laws are subject to criminal prosecution and fines up to $10,000 per offence. 


Exemptions to these minimum wage requirements apply to most salaried employees along with workers under the aged of 20, full-time students, people with certain disabilities, agricultural workers and servers and other tipped employees. 


The FLSA allows employers to pay an employee under the age of 20 a reduced minimum wage of $4.25 per hour during their first 90 days of employment. Should the employee turn 20 during this 90-day period, the employer must begin paying them the Alabama minimum wage as of their 20th birthday. 


Section 14(a) of the FLSA permits Alabama employers who hold an authorizing certificate issued by the U.S. Department of Labor to pay a subminimal wage of no less than 75% of the federal minimum wage to student-learners. 


The WHD can authorize minimum wage exemptions to employers who employ workers with disabilities that impair their productive capacity. Qualifying disabilities include cognitive impairments, addictions, mental illness, cerebral palsy and blindness. 


Some agricultural employees are exempt from Alabama’s minimum wage laws. These employees include farm workers who are also immediate family members of their employer, and workers who spend the bulk of their time working on the range in livestock production. 


Other agricultural minimum wage exempt employees include local hand harvest workers who are paid on a piece-rate basis, and who work in agriculture for fewer than 13 weeks per year. 


According to DOL regulations, all Alabama businesses must display the FLSA’s minimum wage poster in a place where it is visible to all employees. A PDF version of the poster is available for download on the DOL website.


Alabama minimum wage for servers and other tipped employees

Alabama servers and other tipped employees such as bellhops, valets and tour guides must be paid a minimum wage of no less than $2.13 per hour, regardless of how much they earn in tips. All tips are owned by the employee who receives them.   


Additionally, an employee’s gross combined hourly wage must be no less than the Alabama minimum wage of $7.25 per hour. This means that employers need to ensure that tipped employees earn at least $5.12 per hour in tips, otherwise, the employer is responsible for making up the difference. 


Under FLSA guidelines, employers are barred from using an employee’s tips except to apply them toward the minimum wage obligation, or a tip credit. 


Tip pooling is permitted in Alabama. The pool can only include employees who regularly receive tips, such as servers, bellhops, valets and bussers. Tip pools cannot include employees who receive a non-tipped wage, such as managers and cleaning and food prep staff. 


Alabama minimum wage overtime pay

Nonexempt employees who work more than 40 hours in a seven-day period must be paid overtime pay. In Alabama, overtime pay is calculated in accordance with the FLSA, which dictates that an overtime rate of no less than one and a half times the employee’s usual hourly rate be paid for every hour over 40 worked. 


For example, an employee who earns minimum wage and works 50 hours in one workweek would be entitled to $7.25 per hour for the first 40 hours, and at least $10.86 per hour for the additional 10 hours of overtime. 


Note that agricultural workers are exempt from overtime pay rules, and employers are not required to pay overtime to farm workers who perform more than 40 hours of work in a week. 


Alabama minimum wage FAQs

What states have a $15 an hour minimum wage? 

As with all states, Alabama doesn’t currently have a $15 minimum wage, nor is a $15 minimum wage expected to be introduced in the foreseeable future. In neighboring Florida, a $15 minimum wage will be phased in by September 30, 2026


What is the minimum wage for a 16-year-old in Alabama?

In accordance with FLSA guidelines, a 16-year-old may be paid a training wage of $4.25 per hour during their first 90 days on the job, after which time they must receive the full Alabama minimum wage of $7.25 per hour. Full-time students may be paid 75-85% of the minimum wage when working at an educational institution, a retail store or in agriculture. 


What is a livable wage in Alabama?

According to MIT’s Living Wage Calculator, the hourly livable wage for an Alabama adult with no dependents is $13.77. Workers with one dependent need to earn $27.06 an hour to achieve a livable wage, while those with two dependents need an hourly rate of $33.09. 


What is the minimum a salaried employee can make in Alabama?

By law, all nonexempt employees in Alabama must be paid no less than the Alabama minimum wage, even if those employees are salaried. This means that the minimum that a full-time salaried employee who works 40 hours per week can earn is $15,080 per year. 


What is the federal minimum wage? 

The federal minimum wage is currently set at $7.25 per hour according to the FLSA. States are prohibited from setting a state minimum wage below the federal minimum.


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