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Alabama does not have an independent state minimum wage law; hence, it has been adhering to the federal minimum wage since 2009. The current minimum wage rate is $7.25 per hour for non-tipped employees and $2.13 per hour for tipped employees.
All exempt employees in Alabama can negotiate with employers for higher pay, but there are no mandates for wage increases beyond the federal minimum.
Overtime pay is calculated at 1.5 times the standard hourly rate for all hours worked over 40 in a given week, consistent with federal guidelines.
Minimum Wages in Alabama Cities
As Alabama doesn’t have a state-mandated rate, the federal minimum wage for tipped and non-tipped employees across all the cities. Here is a table-wise breakdown of the minimum wage rate for the top 30 Alabama cities:
| City | Non-Tipped Minimum Wage | Tipped Minimum Wage |
|---|---|---|
| Birmingham | $7.25 | $2.13 |
| Montgomery | $7.25 | $2.13 |
| Mobile | $7.25 | $2.13 |
| Huntsville | $7.25 | $2.13 |
| Tuscaloosa | $7.25 | $2.13 |
| Dothan | $7.25 | $2.13 |
| Auburn | $7.25 | $2.13 |
| Decatur | $7.25 | $2.13 |
| Madison | $7.25 | $2.13 |
| Florence | $7.25 | $2.13 |
| Phenix City | $7.25 | $2.13 |
| Gadsden | $7.25 | $2.13 |
| Prattville | $7.25 | $2.13 |
| Vestavia Hills | $7.25 | $2.13 |
| Alabaster | $7.25 | $2.13 |
| Opelika | $7.25 | $2.13 |
| Enterprise | $7.25 | $2.13 |
| Homewood | $7.25 | $2.13 |
| Northport | $7.25 | $2.13 |
| Anniston | $7.25 | $2.13 |
| Prichard | $7.25 | $2.13 |
| Athens | $7.25 | $2.13 |
| Daphne | $7.25 | $2.13 |
| Pelham | $7.25 | $2.13 |
| Oxford | $7.25 | $2.13 |
| Albertville | $7.25 | $2.13 |
| Selma | $7.25 | $2.13 |
| Mountain Brook | $7.25 | $2.13 |
| Trussville | $7.25 | $2.13 |
| Hoover | $7.25 | $2.13 |
Threshold For Employees Exempt
The Fair Labor Standards Act (FLSA) divides workers in Alabama into two primary categories that govern their compensation:
- Non-exempt employees must receive at least Alabama’s minimum wage (which follows the federal rate of $7.25). When these employees work over 40 hours a week, they must be paid overtime at 1.5 times their regular pay rate. This typically applies to hourly workers and those in lower-salaried positions.
- Exempt employees in Alabama must earn at least $844 per week ($43,888 annually) to qualify for exemptionfrom minimum wage and overtime rules. These employees, often in professional, executive, or administrative roles, don’t receive overtime pay regardless of hours worked.
According to federal overtime and Railway Labor Laws, the overtime earnings of employees are exempt from state income tax. Workers earning overtime (1.5 times the regular rate) after 40 hours get to keep more of their overtime earnings due to the state tax exemption.
Historical Data of Alabama Minimum Wages
Unlike all other states, Alabama does not have a state minimum wage. Thus, the federal minimum wage law is all that applies to workers here, which has been pegged at $7.25 since 2009.
In 2016, the city of Birmingham passed an ordinance that increased its minimum wage to $10.10 an hour. However, later in the same year, the Alabama state legislature voted to pass a law that would prohibit cities from implementing their own minimum wage laws, which essentially negated the ordinance passed by the city of Birmingham.
Here is a table that summarizes the minimum wage rates applicable in Alabama from 1968 to 2023:
| Time Period | Year | Minimum Wage (in $) |
|---|---|---|
| 1968 to 1981 | 1968* | 1.15 & 1.60 |
| 1970* | 1.30 & 1.60 | |
| 1972 | 1.60 | |
| 1976* | 2.20 & 2.30 | |
| 1979 | 2.90 | |
| 1980 | 3.10 | |
| 1981 | 3.35 | |
| 1988 to 1998 | 1988 | 3.35 |
| 1991 | 3.80 | |
| 1992 | 4.25 | |
| 1994 | 4.25 | |
| 1996 | 4.25 | |
| 1997 | 4.75 | |
| 1998 | 5.15 | |
| 2000 to 2006 | 2000 | 5.15 |
| 2001 | 5.15 | |
| 2002 | 5.15 | |
| 2003 | 5.15 | |
| 2004 | 5.15 | |
| 2005 | 5.15 | |
| 2006 | 5.15 | |
| 2007 to 2013 | 2007 | 5.15 |
| 2008 | 5.85 | |
| 2009 | 6.55 | |
| 2010 | 7.25 | |
| 2011 | 7.25 | |
| 2012 | 7.25 | |
| 2013 | 7.25 | |
| 2014 to 2019 | 2014 | 7.25 |
| 2015 | 7.25 | |
| 2016 | 7.25 | |
| 2017 | 7.25 | |
| 2018 | 7.25 | |
| 2019 | 7.25 | |
| 2020 to 2023 | 2020 | 7.25 |
| 2021 | 7.25 | |
| 2022 | 7.25 | |
| 2023 | 7.25 |
* – Under the FLSA, the two rates shown in 1968, 1970, and 1976 reflect the former multiple-track minimum wage system in effect from 1961 to 1978.
Source: https://www.dol.gov/agencies/whd/state/minimum-wage/history
Exemptions in Minimum Wages of Alabama
Alabama uses the federal (FLSA) regulation for minimum wage exemptions. These workers may be paid less than minimum wage and aren’t entitled to overtime pay. However, employers may choose to provide higher wages voluntarily. Exempt employees include:
- Seasonal workers: Employees at amusement parks, recreational facilities, or seasonal entertainment venues.
- Agricultural exemptions: Farm workers on small farms (using less than 500 “man-days” per quarter) and fishing operation employees
- Media and delivery: Small newspaper companies’ employees or newspaper delivery workers.
- Care services: Casual babysitters or companions for elderly or infirm individuals
- Maritime: Seamen working on foreign vessels
- Special pay rates: Tipped workers: $2.13/hour (must reach $7.25 with tips), students, under 20: $4.25/hour (first 90 days only), disabled workers.
Note: Full-time students can be paid 85% of the minimum wage ($6.16/hour) in retail, service, agriculture, or education jobs if working under 20 hours weekly. Vocational students can receive 75% ($5.44/hour). Both require Department of Labor certification and strict hour limits.
