Key Facts at a Glance
| Requirement | Alabama Rule |
|---|---|
| Minimum Wage | $7.25 (federal) |
| Tipped Minimum | $2.13 + tips |
| Overtime Threshold | 40 hours/week (no daily OT) |
| Final Pay (Termination) | Next regular payday |
| Final Pay (Resignation) | Next regular payday |
| PTO Payout Required? | No (unless policy requires) |
| Pay Frequency Mandate | None (employer discretion) |
| State Income Tax | Yes (2% - 5%) |
| Unemployment Insurance | Yes |
| State Disability Insurance | No |
| Paid Family Leave | No |
| Paid Sick Leave | No |
| Workers' Comp Required | Yes (5+ employees) |
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Local Jurisdiction Rules
Birmingham and other Alabama cities have local occupational taxes that employers must withhold.
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