Alabama Minimum Wage: Rates and Rules for Employers
Alabama has no state minimum wage law, so the federal $7.25 rate applies. Tip credit, youth wage, local preemption, and poster rules for employers.
Alabama Minimum Wage
No state rate, no city rates, no scheduled increase. The federal $7.25 floor and the handful of exceptions that actually apply in Alabama
The first time I set up payroll for a client with a location in Alabama, I spent twenty minutes hunting for the state rate table. There isn't one. Alabama has never passed a minimum wage law, so the search ends where it starts: the federal floor.
That makes Alabama one of the easiest states in the country to get right, and one of the easiest to get wrong for a different reason. Employers who move here from a state with annual January increases keep waiting for a notice that never arrives. Employers who assume a big city sets its own rate go looking for a Birmingham ordinance that state law voided a decade ago.
This page covers one thing: what an Alabama employer pays per hour, and what changes that number. For everything else, hiring paperwork, workers compensation, final paychecks, see the Alabama HR compliance guide.
The Current Alabama Minimum Wage
The minimum wage in Alabama is $7.25 per hour, and it took effect on July 24, 2009. That is the federal rate under the Fair Labor Standards Act, not a state rate, because Alabama has no minimum wage statute of its own.
The Alabama Department of Workforce says so directly in its wage and hour guidance: Alabama does not have any state laws governing wage and hour issues, and employers must follow the federal guidelines set by the US Wage and Hour Division. There is no state wage agency to file with and no state rate schedule to track.
The US Department of Labor lists Alabama among the five states with no minimum wage law at all, alongside Louisiana, Mississippi, South Carolina and Tennessee, in its state minimum wage laws table. Every employee covered by the FLSA in Alabama is entitled to $7.25.
| Rate | Amount per hour | In effect since | Authority |
|---|---|---|---|
| Alabama state minimum wage | None. Alabama has never enacted one | Not applicable | Alabama Department of Workforce |
| Standard minimum wage that applies | $7.25 | July 24, 2009 | FLSA section 6(a)(1) |
| Tipped employee cash wage | $2.13 | Fixed at the August 20, 1996 cash wage | FLSA section 3(m)(2)(A) |
| Maximum tip credit | $5.12 | July 24, 2009 | $7.25 minus the $2.13 cash wage |
| Youth wage, under 20, first 90 consecutive calendar days | $4.25 | 1996 FLSA amendments | FLSA section 6(g) |
| Full-time student certificate rate | At least 85 percent of $7.25 | Advance DOL certificate required | 29 CFR part 519 |
| Student-learner certificate rate | At least 75 percent of $7.25 | Advance DOL certificate required | 29 CFR 520.506 |
Is Another Increase Scheduled?
No increase is scheduled in Alabama. There is no state minimum wage law to raise, and there is no automatic inflation adjustment anywhere in the picture, because Alabama never built one and federal law does not contain one.
The last change to the number an Alabama employer pays was the third step of the Fair Minimum Wage Act of 2007, which moved the federal rate to $7.25 on July 24, 2009. Nothing has moved it since. An Alabama employer watching for the next increase should watch Congress, not the state Legislature. Our tracker of state minimum wage increases covers what is scheduled elsewhere if you employ people across state lines.
Tipped Employees and the Tip Credit
A tip credit is allowed in Alabama, on federal terms only. You may pay a direct cash wage as low as $2.13 per hour and count tips toward the remaining $5.12, provided the employee actually reaches $7.25 for every hour worked in the workweek.
Alabama has no tip credit statute, no state notice form and no state cap that differs from the federal one, so the rules in the Department of Labor tipped employee wage table apply as written. A tipped employee is one who customarily and regularly receives more than $30 a month in tips.
Three conditions travel with the credit. You have to tell the employee you are taking it before you take it. You have to let the employee keep all tips except through a valid tip pool. And you have to make up the shortfall in any workweek where tips came in light. The mechanics are worked through in our guide to minimum wage for tipped employees.
City and County Rates in Alabama
There are no city or county minimum wage rates in Alabama, and there legally cannot be. Ala. Code section 25-7-41, enacted in February 2016 as the Alabama Uniform Minimum Wage and Right to Work Act, reserves wage and benefit regulation to the state Legislature.
The statute bars counties, municipalities and other political subdivisions from requiring an employer to pay wages or provide employment benefits beyond what state or federal law requires. Birmingham adopted a $10.10 ordinance in February 2016 and the preemption act voided it within days. It is the only local minimum wage Alabama has ever seen.
| Jurisdiction | Local minimum wage | Status for employers |
|---|---|---|
| Birmingham | $10.10 ordinance adopted February 2016 | Void. Preempted by Ala. Code section 25-7-41 |
| Montgomery, Mobile, Huntsville, Tuscaloosa | None adopted | No local rate. Federal $7.25 applies |
| All other Alabama cities and counties | None adopted | Local wage ordinances prohibited since February 2016 |
| Statewide result | $7.25 per hour | One rate everywhere. No local variation to track |
For a multi-site employer this is genuinely simplifying. A crew that moves between a Huntsville warehouse and a Montgomery job site is on one wage floor, with no local ordinance lookup and no split-rate payroll setup. That is not true in most neighboring states with local wage authority.
Industry Carve-Outs
Alabama has no industry-specific minimum wage of any kind. There is no fast food council rate, no healthcare minimum, no agricultural state rate and no hospitality schedule, because the state has no wage statute to carve anything out of.
What does apply are the federal FLSA exemptions, and those matter to small employers in a few real situations. The small farm exemption is the one that catches Alabama employers most often.
| Work or industry | Alabama rule | Federal rule that applies instead |
|---|---|---|
| Fast food and quick service | No Alabama industry rate | $7.25 standard minimum wage |
| Healthcare, home care and residential care | No Alabama industry rate | $7.25. The FLSA companionship services exemption is narrow and unavailable to third-party employers |
| Agriculture | No Alabama industry rate | Small farm exemption if the employer used no more than 500 man-days of agricultural labor in any calendar quarter of the prior year (29 U.S.C. 213(a)(6)(A)) |
| Seasonal amusement and recreational establishments | No Alabama industry rate | Exempt from federal minimum wage and overtime under 29 U.S.C. 213(a)(3) |
| Restaurants with tipped staff | No Alabama tip credit statute | Federal tip credit: $2.13 cash wage plus up to $5.12 in tips |
| Workers with disabilities | No Alabama program | Section 14(c) certificates remain available. The 2024 proposal to phase them out was withdrawn on July 7, 2025 |
Exempt status under the white collar rules is a separate question from the minimum wage and gets decided employee by employee. If you are unsure whether a salaried role is genuinely exempt, work through exempt versus non-exempt classification before you set the salary rather than after.
Youth and Training Wages
Alabama has no state youth or training wage. The federal youth minimum wage of $4.25 per hour is the only one available, and it applies to employees under 20 years old during their first 90 consecutive calendar days of employment with you, under FLSA section 6(g).
Three limits are easy to miss. The 90 days are calendar days, not worked days, so the clock runs through slow weeks. The rate ends on the employee's twentieth birthday even if fewer than 90 days have passed. And you may not displace an existing employee, including by cutting hours, in order to hire someone at the youth rate.
Two other subminimum rates exist for full-time students and student-learners, at 85 percent and 75 percent of the applicable minimum respectively. Both require a certificate issued in advance by the Department of Labor, and neither is something you can simply start paying. Alabama's own child labor law under Ala. Code section 25-8 governs hours and work permits for minors, not their pay rate.
The Poster Requirement
Alabama employers post the federal Fair Labor Standards Act minimum wage notice, WH-1088, and there is no state minimum wage poster to add. Every employer of employees covered by the FLSA minimum wage provisions must display it in a conspicuous place where employees can readily read it.
The current version was revised in April 2023, and the Department of Labor states that older versions no longer satisfy the requirement. Download the current file free from the Wage and Hour Division poster page rather than buying a laminated bundle from a vendor.
Alabama does require its own state postings from the Alabama Department of Workforce, covering child labor, workers compensation and unemployment compensation. None of them carry a wage rate, so they do not change when a wage does. The full posting list sits in the Alabama compliance guide.
Which Employers the $7.25 Floor Reaches
Because Alabama has no state wage law, FLSA coverage is the whole question. An employee who falls outside the FLSA has no wage floor in Alabama at all, which is the one place where the absence of a state statute has real bite.
Coverage comes two ways. Enterprise coverage reaches businesses with at least $500,000 in annual gross volume of sales or business done, plus hospitals, schools and government regardless of revenue. Individual coverage reaches employees whose own work involves interstate commerce, which in practice sweeps in most staff who handle out-of-state orders, credit card transactions or shipments.
Between the two tests, the majority of Alabama employees are covered even at small companies. Assuming you are outside the FLSA because you are under $500,000 in revenue is a common and expensive mistake. The mechanics of coverage, overtime and recordkeeping sit in our FLSA overview, and the national rate picture is in the federal minimum wage guide.
What to Do When a Rate Rises
When the federal rate moves, an Alabama employer has a short and specific list of work to do, and no state wage-notice statute forcing a deadline on any of it. That last part cuts both ways: nothing is legally due on a set date, so nothing prompts you either.
FirstHR keeps pay rates, offer letters and acknowledgements in one employee record, so a rate change updates in one place instead of five spreadsheets. FirstHR is an onboarding and HR platform, not a payroll provider, so the actual wage calculation still happens in your payroll system.
Frequently Asked Questions
What is the minimum wage in Alabama?
$7.25 per hour, the federal rate, in effect since July 24, 2009. Alabama has never enacted a state minimum wage, and the Alabama Department of Workforce confirms that employers must follow federal wage and hour rules instead. Alabama is one of five states with no wage statute of its own.
Is the Alabama minimum wage going up?
No increase is scheduled. There is no state law to raise and no federal increase pending since the Fair Minimum Wage Act of 2007 finished phasing in. Federal law contains no automatic inflation adjustment, so the number holds until Congress changes it.
What do I have to pay tipped employees in Alabama?
At least $2.13 per hour in cash wages, with tips covering the rest of $7.25. The maximum tip credit is $5.12. Alabama has no tip credit statute, so federal rules govern: advance notice to the employee, employee retention of tips, and an employer top-up in any workweek where the total falls short.
Can a city or county in Alabama set a higher minimum wage?
No. Ala. Code section 25-7-41 reserves wage regulation to the Legislature and prohibits local governments from mandating wages or benefits beyond state and federal law. Birmingham's $10.10 ordinance from February 2016 was voided by that act within days, and no Alabama locality has an enforceable rate today.
Can I pay a teenager less than $7.25 in Alabama?
Yes, but only $4.25 per hour for employees under 20 during their first 90 consecutive calendar days, under federal law. The rate ends at the 90-day mark or the twentieth birthday, whichever comes first, and you may not displace an existing worker to use it. Alabama adds no state youth rate.
Which minimum wage poster do Alabama employers display?
The federal FLSA poster WH-1088, last revised April 2023, posted where employees can read it. There is no Alabama minimum wage poster. Separate Alabama postings for child labor, workers compensation and unemployment compensation are still required, but none of them state a wage rate.
Overtime is the companion question to the minimum wage and follows federal rules in Alabama too. If you need the calculation, start with our overtime pay guide, then come back to the Alabama compliance hub for the rest of the state picture.