Alabama Minimum Wage 2026: $7.25 per Hour (Federal Rate Applies)
Alabama has no state minimum wage law, so the federal $7.25 per hour applies to covered employers. Tipped cash wage is $2.13, local minimum wages are banned, and no increase is scheduled.
Alabama has no state minimum wage law. The Alabama Department of Labor states that Alabama does not have any state laws governing wage and hour issues, so employers must follow the federal rules enforced by the US Department of Labor's Wage and Hour Division. That makes the minimum wage in Alabama the federal rate of $7.25 per hour for employers and employees covered by the Fair Labor Standards Act, with a $2.13 tipped cash wage. A 2016 state law bars cities and counties from setting their own minimum wage, so $7.25 applies statewide.
- Alabama is one of five states with no minimum wage law; the federal $7.25 governs
- The federal law covers most employers, but a small business outside FLSA coverage has no minimum wage obligation in Alabama
- Tipped cash wage is $2.13 with a $5.12 federal tip credit
- Act 2016-18 preempts local minimum wages after Birmingham tried to set $10.10
- Wage claims go to the federal Wage and Hour Division, not a state agency
Current Alabama Minimum Wage
Alabama, Louisiana, Mississippi, South Carolina and Tennessee have never enacted a state minimum wage statute. In those states the only minimum wage is the federal one, and the only employers required to pay it are those covered by the FLSA. Coverage is broad: any business with $500,000 or more in annual sales, plus any employee who engages in interstate commerce or handles goods that have crossed state lines, plus hospitals, schools and public agencies. A small local shop with under $500,000 in sales and no interstate activity can fall outside the law, and Alabama provides no backstop.
The Alabama Department of Labor's wage and hour guidance directs employers to the federal Wage and Hour Division offices in Montgomery, Birmingham and Mobile for minimum wage, overtime, hours worked, recordkeeping and deduction questions. The state does have its own child labor law, enforced by the department's Child Labor Division, but no state rules on adult wages.
Alabama Minimum Wage vs Federal Minimum Wage
| Rate | Amount | Effective |
|---|---|---|
| Alabama state minimum wage | None | No statute |
| Federal minimum wage (applies in Alabama) | $7.25 per hour | July 24, 2009 |
| Federal tipped cash wage | $2.13 per hour | Unchanged since 1991 |
| Federal youth wage (under 20, first 90 days) | $4.25 per hour | 1996 |
Every neighboring state except Florida also sits at $7.25 or has no law: Georgia's $5.15 statute is overridden by the federal rate, Mississippi and Tennessee have no law, and Florida pays $14.00 rising to $15.00 on September 30, 2026. Our minimum wage by state guide compares the full list.
Tipped Minimum Wage in Alabama
Federal tip credit rules apply. The US Department of Labor's tipped wage table lists Alabama at a $2.13 cash wage with a maximum tip credit of $5.12. If an employee's tips plus $2.13 do not average $7.25 per hour over the workweek, the employer pays the difference. Employers must notify tipped employees of the tip credit before using it, may not keep employees' tips, and may not take the credit for time spent on non-tipped duties beyond the federal limits.
Because there is no state law, Alabama has no separate rules on service charges, tip pooling or tip credit notices; the federal regulations at 29 CFR part 531 are the whole rulebook.
Alabama Minimum Wage Increase Schedule
Alabama's effective minimum wage has moved only when the federal rate has.
| Effective date | Rate |
|---|---|
| July 24, 2007 | $5.85 |
| July 24, 2008 | $6.55 |
| July 24, 2009 | $7.25 |
| 2010 through 2026 | $7.25, no change |
No increase is scheduled. The rate will change only if Congress raises the federal minimum wage or the Alabama Legislature passes a state minimum wage law, and bills to do the latter have not advanced.
Local Minimum Wages in Alabama
In 2015 the Birmingham City Council passed an ordinance to raise the city's minimum wage to $10.10. Before it took effect, the Legislature passed Act 2016-18, the Alabama Uniform Minimum Wage and Right-to-Work Act, which declared minimum wage a matter of statewide concern and voided any local minimum wage. Litigation challenging the preemption law ended without restoring the Birmingham ordinance. As a result, no city or county in Alabama has a minimum wage above the federal rate, and employers can apply one figure statewide.
Who Is Covered and Who Is Exempt
Coverage in Alabama is entirely a question of federal law. An employer is covered if it meets the $500,000 enterprise threshold or if the individual employee is engaged in interstate commerce. Within covered employers, the usual federal exemptions apply: bona fide executive, administrative and professional employees who meet the salary and duties tests, outside sales staff, certain computer professionals, some agricultural workers, and others. Our guide to exempt vs non-exempt employees explains the tests.
Employers should not assume a small business is exempt. Handling credit card payments, ordering supplies from out of state, or making interstate phone calls can bring individual employees under federal coverage even when the business is below the sales threshold.
Overtime and the Minimum Wage
Alabama has no state overtime law, so the federal rule applies: time and a half after 40 hours in a workweek for non-exempt employees, with no daily overtime. A minimum wage worker who works 45 hours earns 40 hours at $7.25 ($290.00) plus 5 overtime hours at $10.875 ($54.38), for $344.38 gross. Alabama did briefly exempt overtime pay from state income tax under a 2023 law, which affected withholding rather than the pay itself; confirm the current status with the Alabama Department of Revenue. Use our overtime calculator for any rate and see our guide to overtime pay laws by state.
What a Minimum Wage Worker Earns in Alabama
| Period | Hours | Gross pay at $7.25 |
|---|---|---|
| Weekly | 40 | $290.00 |
| Biweekly | 80 | $580.00 |
| Monthly (average) | 173.33 | $1,256.64 |
| Annual | 2,080 | $15,080.00 |
These are gross figures before taxes and deductions; see our explainer on gross pay and the salary to hourly calculator.
Employer Compliance Checklist
- Determine whether the business or individual employees are covered by the FLSA; most are
- Pay covered non-exempt employees at least $7.25 per hour
- Pay tipped staff at least $2.13 in cash wages, provide the tip credit notice, and make up any weekly shortfall
- Apply federal overtime after 40 hours in a workweek
- Post the federal FLSA minimum wage poster; there is no Alabama minimum wage poster
- Keep the federal three-year payroll records and two-year time records; a time card calculator or automatic time tracking makes this simple
Reviewed September 2026
Alabama's position is taken from the Alabama Department of Labor's wage and hour guidance, and the federal rates from the US Department of Labor tables as of July 1, 2026. Coverage under the federal law depends on facts specific to each business; confirm with the Wage and Hour Division before treating any employee as uncovered.
Federal recordkeeping made automatic
HiveDesk tracks hours and generates timesheets so Alabama employers meet FLSA recordkeeping and overtime rules without paper time cards. $5/user/month, 14-day free trial.
How Alabama Compares With Neighboring States
Alabama's region sits almost entirely at the federal floor, with Florida the exception.
| State | Minimum wage (July 1, 2026) | Notes |
|---|---|---|
| Alabama | $7.25 | No state law; federal rate |
| Tennessee | $7.25 | No state law; federal rate |
| Mississippi | $7.25 | No state law; federal rate |
| Georgia | $7.25 | State statute of $5.15 overridden by the federal rate |
| Florida | $14.00 | $15.00 on September 30, 2026; indexed from 2028 |
Employers along the Florida Panhandle border face the region's only large gap, at nearly $7.00 per hour.
Common Minimum Wage Mistakes in Alabama
- Assuming a state agency will handle a minimum wage complaint; Alabama refers all wage claims to the federal Wage and Hour Division
- Treating a small business as exempt without checking individual employee coverage under the FLSA
- Failing to provide the federal tip credit notice to tipped employees
- Applying Birmingham's voided $10.10 ordinance
- Missing federal recordkeeping rules because no state poster or form exists
Frequently Asked Questions
What is the minimum wage in Alabama in 2026?
$7.25 per hour under federal law. Alabama has no state minimum wage statute.
Is Alabama raising its minimum wage?
No. The rate changes only if Congress raises the federal minimum wage or Alabama passes its own law, and neither is scheduled.
Does every Alabama employer have to pay $7.25?
Employers covered by the federal Fair Labor Standards Act must. A small business outside federal coverage has no minimum wage obligation in Alabama, but coverage is broad and most businesses qualify.
What is the tipped minimum wage in Alabama?
$2.13 per hour in cash wages under federal rules, with tips making up the rest to $7.25.
Can Birmingham set its own minimum wage?
No. Act 2016-18 preempts local minimum wage ordinances and voided Birmingham's $10.10 ordinance before it took effect.
Who enforces minimum wage in Alabama?
The US Department of Labor's Wage and Hour Division, through its Montgomery, Birmingham and Mobile offices. The Alabama Department of Labor does not handle adult wage and hour complaints.
Does Alabama have a youth or training wage?
The federal youth wage of $4.25 for workers under 20 during their first 90 days applies to FLSA-covered employers.
How much does a full-time minimum wage worker earn in Alabama per year?
$15,080 before taxes, based on 2,080 hours at $7.25 per hour.