Alabama Minimum Wage: Rate, Tipped Wage, and Local Rules

Alabama has no state minimum wage law of its own. That means the floor for nearly all Alabama workers is the federal minimum wage of $7.25 per hour set by the Fair Labor Standards Act (FLSA), and the federal tipped cash wage of $2.13 per hour. Alabama is one of a small group of states (along with neighbors like Mississippi, Tennessee, and Louisiana) that has never enacted a statewide minimum wage statute. So unlike states that pay more than the federal floor, in Alabama the practical answer to "what is the minimum wage" is simply the federal number that has stood unchanged since July 24, 2009.

Because there is no state statute setting a higher rate and no state inflation-indexing mechanism, the Alabama minimum wage does not rise on a schedule. It will only change if Congress amends the federal FLSA rate or if Alabama's Legislature passes a new state law. As of 2026, neither has happened, so $7.25 remains the operative figure. Always confirm the current federal rate with the U.S. Department of Labor's Wage and Hour Division before relying on it, since federal law can change.

How the federal floor applies in Alabama

The FLSA covers most Alabama employees through two routes. "Enterprise coverage" applies to businesses with at least $500,000 in annual gross sales, and many large employers fall under it automatically. "Individual coverage" applies to workers whose duties involve interstate commerce - producing goods that cross state lines, handling out-of-state shipments, making interstate phone calls, or processing credit card transactions, for example. In practice, the vast majority of Alabama jobs are covered by one route or the other, so $7.25 functions as the effective statewide minimum.

A genuinely small, purely local business that is not engaged in interstate commerce may technically fall outside FLSA enterprise coverage. But individual coverage is broad, and most workers are protected. If you are unsure whether your job is covered, the Wage and Hour Division can evaluate the specific facts.

Tipped employees and the tip credit

Because Alabama defers entirely to federal law, the federal tip-credit rules govern tipped workers such as servers, bartenders, and others who customarily receive tips. The key numbers are:

• Cash wage: An employer may pay a tipped employee a direct cash wage as low as $2.13 per hour.
• Tip credit: The employer may claim a "tip credit" of up to $5.12 per hour - the gap between $2.13 and $7.25.
• The guarantee: Cash wage plus tips must add up to at least $7.25 per hour for every hour worked. If a worker's tips fall short, the employer must make up the difference so total pay reaches $7.25.

An employer can only use the tip credit if it tells the employee about the tip-credit provisions in advance, lets the employee keep all tips (except for a valid tip pool among employees who customarily receive tips), and does not take the credit for time spent on substantial non-tipped duties. If those conditions are not met, the employer owes the full $7.25 cash wage. A "tipped employee" under federal law is generally someone who regularly receives more than $30 a month in tips.

No city or county minimum wages

Alabama law specifically blocks local governments from setting their own, higher minimum wage. In 2015, the City of Birmingham passed an ordinance that would have raised the local minimum wage above the federal level (toward $10.10 an hour). In response, the Alabama Legislature enacted the Alabama Uniform Minimum Wage and Right-to-Work Act (Act No. 2016-18) in February 2016, which preempts the entire field of wage and employment-benefit regulation and voids any local minimum-wage ordinance. The result: no Alabama city or county can legally require employers to pay more than the federal $7.25.

This preemption law means you will not find a Birmingham, Montgomery, Mobile, or Huntsville minimum wage that exceeds the federal rate. The same single floor applies everywhere in the state. (A separate, unrelated legal challenge to the preemption law was litigated in federal court on civil-rights grounds; regardless of that history, the statute remains in effect and no local rate is currently enforceable.)

Overtime and other wage rules

Alabama also has no state overtime law, so federal overtime rules apply. Under the FLSA, non-exempt employees must receive 1.5 times their regular rate for hours worked over 40 in a workweek. Alabama does not require daily overtime, mandatory rest or meal breaks for adults, or premium pay for weekends or holidays - those are matters left to the employer or to any private contract. Common FLSA exemptions (for bona fide executive, administrative, professional, outside sales, and certain computer employees) apply the same way they do nationwide.

Subminimum and special categories

A few federal exceptions can allow pay below $7.25, and they apply in Alabama because federal law controls:

• Youth wage: Workers under 20 may be paid a federal youth minimum of $4.25 per hour during their first 90 consecutive calendar days with an employer.
• Tipped wage: The $2.13 cash wage described above, provided tips bring the total to $7.25.
• Student learners and certain workers may be paid subminimum rates under special Department of Labor certificates.

How to enforce your wage rights

Because Alabama has no state wage-and-hour enforcement agency or state minimum-wage statute, wage claims are handled under federal law. If you are paid less than $7.25 an hour, denied overtime, or shorted on the tip-credit guarantee, you can file a complaint with the U.S. Department of Labor's Wage and Hour Division, which has offices serving Alabama (including Birmingham). The Division can investigate, recover back wages, and assess penalties at no cost to the worker. You may also file a private FLSA lawsuit; successful workers can recover unpaid wages plus an equal amount in liquidated damages and attorney's fees. The general FLSA statute of limitations is two years, extended to three years for willful violations, so do not wait long to act.

Where to verify the current rate

Alabama's state workforce agency is the Alabama Department of Labor. Note that it does not set or enforce a state minimum wage, because none exists - it handles unemployment compensation, workers' compensation, and workplace safety matters. For the binding minimum-wage and overtime figures that actually apply in Alabama, the authoritative source is the U.S. Department of Labor, Wage and Hour Division. Before relying on any number, confirm the current federal minimum wage, tipped cash wage, and tip credit directly with the Wage and Hour Division, since these can change if federal law is amended.

Official Alabama Sources

This page is based on Alabama employment law. Rules and figures change — verify the current details directly with the official Alabama sources below. This is general legal information, not legal advice.

• Alabama Department of Labor — official Alabama agency.
• Alabama Department of Labor — Questions About Pay, Unpaid Wages, Breaks, Vacation Pay, FMLA (state has no wage-claim process; directs workers to the federal DOL Wage and Hour Division)

Federal law and local ordinances may also apply. Federal laws like the Fair Labor Standards Act set a national floor, and your city or county may add protections (such as a higher local minimum wage or paid sick leave). Check both alongside Alabama state law.