Local payroll and employment requirements that differ from or exceed Alabama state law
Last updated: January 2025
Federal minimum wage applies. Alabama preempts local minimum wage increases (Birmingham attempted $10.10 in 2016 but was blocked by state law).
No state or local paid sick leave requirement in Alabama.
Tax on wages, salaries, and other compensation for work performed in Birmingham. Withheld by employers from employee wages.
Separate business license tax based on gross receipts. Required for businesses operating in Birmingham.
Employers with employees working in Birmingham must withhold 1% occupational tax.
Employers file quarterly occupational tax returns with the City of Birmingham.
Employers must obtain Birmingham business license and register for occupational tax withholding.
Tax applies to wages for work performed within Birmingham city limits. Non-residents working in Birmingham are subject.
These local rules apply in addition to Alabama state law. Employers must comply with whichever law provides greater protection to employees. Always verify current requirements with official sources.