Managing hourly workers in Alabama can be complex — especially around paid sick leave laws.
State requirements can interact with federal standards, and in some areas, local rules may layer on additional obligations for employers.
Alabama follows federal wage and hour standards with minimal state-level deviations, making it one of the simpler jurisdictions for employers to navigate.
However, companies should still maintain strong internal policies and accurate payroll documentation to ensure full compliance with federal and local labor requirements.
This blog is based on information available to HireArt as of October, 2025. HireArt does not provide tax, accounting or legal advice. This material has been prepared for informational purposes only, and should not be relied on for, tax, legal or accounting advice. Consult your own tax, legal and accounting advisors before engaging in any related activities or transactions.
Alabama does not have its own state minimum wage and defaults to the federal rate.
The current minimum wage is $7.25 per hour, which serves as the baseline for most nonexempt workers. The state preempts local governments from setting higher minimum wages, ensuring one uniform rate statewide.
Employers must follow the higher applicable rate between state and local law.
Alabama does not mandate paid sick leave for private employers.
Employers may choose to implement their own policies, but these are governed entirely by internal agreements or contracts. Having a clear, written sick leave policy helps prevent confusion and maintain compliance consistency.
Local jurisdictions in Alabama are preempted from setting their own wage or leave laws.
This means employers throughout the state operate under the same federal and state framework, simplifying compliance for multi-location businesses.
Alabama law does not require meal or rest breaks for adult employees.
Employers should instead rely on their internal policies, collective bargaining agreements, or FLSA guidance to determine appropriate rest or meal periods.
Payment for unused paid time off (PTO) depends on company policy or contract terms.
If the employer’s written policy or employment contract provides for payout, the employer must follow those terms. Documentation is key to avoiding disputes at termination.
Alabama does not have a general statute requiring reimbursement for business-related expenses.
Employers are encouraged to adopt internal policies outlining what qualifies as reimbursable expenses and to avoid unauthorized payroll deductions that could reduce wages below the minimum threshold.
Employers in Alabama must provide employees with transparent wage documentation and ensure timely final payments.
These practices align with federal record keeping and payment standards.
Alabama follows the federal economic-realities test to determine whether a worker is an employee or independent contractor.
If the employer exerts significant control over how, when, or where work is performed, the worker is typically classified as an employee. Misclassification can lead to penalties, back pay, and tax liabilities.
HireArt serves as an Employer of Record (EOR) to help companies operating in Alabama stay compliant with employment and payroll laws. Through HireArt, employers can:
HireArt simplifies labor compliance for Alabama employers, helping them stay efficient and legally sound while managing growing contract and full-time teams.
