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HOURLY WAGE INDEX

Let’s talk wages in Alabama

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$7.25

What is the minimum wage in Alabama?

What is the minimum wage in Alabama? The Alabama minimum wage is $7.25 per hour. This is the same as the federal minimum wage, which has been in place since 2009. There are some exceptions to this rule, such as for tipped workers, who must be paid at least $2.13 per hour. 

There have been a number of efforts to raise the Alabama minimum wage in recent years. In 2019, state lawmakers introduced a bill that would have gradually increased the minimum wage to $15 per hour by 2024. However, the bill did not pass.

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$25.67

What is the average wage in Alabama?

According to the U.S. Bureau of Labor Statistics, the average hourly wage in Alabama was $25.67 in 2023. This means that the average worker in Alabama earns about $53,400 per year.
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$30.32

What is the living wage in Alabama?

Wages aren’t everything!

While pay is one of the main factors that hourly employees consider when choosing to join (or stay at) a company, it’s not the end all be all. Research shows that advancement opportunities, supportive management, and schedule flexibility are all incredibly important as well.

Want to learn more about this trend? We dive deep into the data behind which perks and benefits matter most to hourly workers. Check out our full conversation with expert Sara Wasserteil of Cara Collective.

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A guide to hourly labor laws in Alabama

Verified by Legal Counsel Brooke Davis

  • Standard Minimum Wage: No state minimum wage. Adheres to the federal minimum wage of $7.25 under the Fair Labor Standards Act (29 US Code § 206).
  • Tipped Minimum Wage: No state tipped minimum wage. Adheres to the federal minimum wage of $2.13, with wage and tips totaling at least minimum wage (29 US Code § 203) (DoL Table).
  • Overtime: Hours exceeding 40 in a fixed week are overtime, paid at 1.5 times the regular rate (29 US Code § 207) (DoL).
  • Meal Breaks: No state or federal law requiring meal breaks. Federal law allows unpaid, non-working, bona-fide meal breaks over 30 minutes; exceptions may apply (29 C.F.R. § 785.19) (DoL).
  • Rest Breaks: No state or federal law requires rest breaks. Breaks lasting 5–20 minutes must be paid (29 C.F.R. § 785.18).
  • Wage Deductions: No state laws (Alabama DoL). Federally limited to those required by law, such as taxes. Third-party deductions benefitting the employer may not reduce wages below the applicable minimum (29 C.F.R. § 4.168) (29 US Code § 203).
  • Final Paychecks: By the next scheduled payday, regardless of termination or resignation (DoL).
  • Wage Payment Frequency: No state/federal laws. Wages should be paid consistently, according to employment terms (DoL).
  • Paid Sick Leave: No state/federal law. Policies are determined by the employer or through collective bargaining agreements (DoL).
  • Paid Family and Medical Leave: No state law. Employees may be eligible for up to 12 unpaid weeks in one year for a qualifying medical condition (FMLA).
  • Maximum Daily and Weekly Hours for Children Under 16: Alabama prohibits children under 16 from working during school hours (Ala. Code § 25-8-37).
    • School session: Three hours per day; 18 hours per week.
    • Non-school session: Eight hours per day; 40 hours per week.
    • Working hours: Only between 7 a.m. and 7 p.m., extended until 9 p.m. June 1 through Labor Day (29 C.F.R. § 570.35).
  • Maximum Daily and Weekly Hours for Children 16 and 17: No state/federal laws (DoL).

Frequently asked questions

What is the difference between gross wages and net wages?

It's important to remember that the Hourly Wage Index data above reflects gross wages, or the amount of money an employee earns before accounting for payroll deductions like taxes, benefits, or wage garnishments. Due to variability in tax rates across locations, slightly lower gross wages in a certain location might result in higher take home pay, or vice versa.

What is a good hourly wage?

This question is a difficult one to answer, as a "good hourly wage" is highly subjective according to experience, work responsibilities, cost of living, and other factors. We recommend using Hourly Wage Index data as a starting point. Once you have established a baseline for certain positions, do further research into similar businesses in your area.

Lastly, consider surveying your employees. They're the best resource to help you know what is a good hourly wage, what competitive pay looks like in your location, and how competitive wages change in your industry over time.

Offering competitive pay is one of my top priorities—what other resources do you have that might help?

We know that getting applicants to pay attention to your business can be extremely challenging, and that offering competitive pay is a huge part of that. Wages aren’t everything, however! Applicant experience is another important factor that can help set you apart from your competition. A few examples include:

  • Short, easy to understand job descriptions
  • Mobile-friendliness
  • Quick communication
  • Streamlined interview stages
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