Alabama Overtime State Law 2026

As of 2025, Alabama does not have any state-specific overtime laws. It mostly follows the federal rules, especially the federal Fair Labor Standards Act (FLSA). In 2024, the state passed a temporary law making overtime pay exempt from Alabama’s income tax, allowing workers to take home more of their overtime pay. However, the exemption ends on June 30, 2025. Starting July 1, 2025, overtime wages will be taxed in the same manner as before.

Overview of Alabama Overtime Laws 2026

Since the state doesn’t have its own overtime laws, it follows the federal Fair Labor Standards Act (FLSA). This ensures that all employees are paid fairly for additional hours worked under federal standards.

• Overtime rate: 1.5X the employee’s regular hourly rate.
• Weekly overtime: Applies only after 40 hours in a workweek.
• Daily overtime: No separate daily overtime rule.
• Exemptions: Certain salaried, executive, administrative, and professional employees are exempted under the FLSA guidelines.
• Recordkeeping: Employers must maintain accurate records of all hours an employee works and their wages.

The table below features key changes that impact overtime and exemptions in 2025:

Eligibility for Overtime in Alabama

As per the state laws, not all workers qualify to receive overtime pay. The employee classification is ideally based on the FLSA standards defined by federal regulations.

• Nonexempt employees: Blue-collar, hourly, and some specific salaried workers typically qualify for overtime pay when working beyond 40 hours per week.
• Exempt employees: These include EAPs (executives, administrators, and professionals), outside salespeople, and certain computer employees who earn over $1,128/week.

Please note, no specific state categories exempt or extend overtime eligibility, and exceptions primarily follow the FLSA regulations.

Federal vs. Alabama Overtime Rules

Because Alabama follows federal rules, this alignment streamlines compliance for HR teams and makes overtime management simple for companies and employees. 

The table below sheds more light on federal vs. state overtime rules. 

Exemptions in Alabama

Alabama follows the federal FLSA definitions when classifying overtime exemptions. It is as follows. 

• Executive Employees: Manage a department, supervise the staff, and have the authority to hire/fire employees as needed. 
• Administrative Employees: Those in office management or support roles with independent judgment
• Professional Employees: Those with advanced knowledge or an educational qualification in specialized fields.
• Outside Salespersons: Those who work in the field (or outside the employer’s premises) and mainly generate sales leads for the business.
• Highly Compensated Employees: Employees who earn more than $151,164 per annum and perform some exempt duties.
• Certain Computer Employees: Those who perform skilled computer-related duties such as system analysis, software development, and programming. 
• Other Federal Exemptions: These include farm-workers, drivers covered under the Motor Carrier Act, and certain types of seasonal and recreational workers.

No additional state-specific overtime exemptions exist. Hence, employers must use federal FLSA standards to classify employees.

Employer Obligations and Employee Rights

• Timely Payment: Employers must pay full wages to employees, including overtime, as per the agreed-upon paycheck schedule.
• Tax Withholding and Remittance: Employers must deduct federal and state income taxes (once applicable) on overtime wages and send those withheld taxes to the respective governments on behalf of the employees, without fail.   
• Workplace Safety: Companies must strictly adhere to OSHA safety and health regulations
• Recordkeeping: Employers must maintain accurate and updated records for hours worked, wages, and employee classification
• Benefits: The Company must provide all legally required benefits to employees and comply with federal law.
• Anti-Discrimination: Employers must comply with Title VII, ADA, and EEOC standards for fair employment.

In addition, penalties for non-compliance may include back wages, fines, and other legal actions against employers.