As of 2025, Alabama’s labor laws continue to evolve, impacting both employers and employees. While many regulations align with federal standards, several state-specific changes have been implemented.
This article provides an overview of the key updates to Alabama labor laws in 2025.
1. Overtime Pay Exemption Ends
In 2024, Alabama introduced a temporary exemption from state income tax on overtime wages under Act 2024-437. However, this exemption expired on June 30, 2025. Employers are now required to resume withholding state income tax on overtime wages paid to non-exempt employees. Overtime earned on or before June 30 but paid in July may still be treated as exempt in reporting. Employers must ensure that exempt overtime is reported correctly in Box 14 of W-2 forms, using the “EX OT WAGES” indicator, and excluded from Box 16.
2. Paid Parental Leave for State Employees
A significant development in 2025 is the approval of paid parental leave for state employees. Under the new law, state employees, including teachers, are entitled to up to eight weeks of paid maternity leave and two weeks of paid paternity leave following the birth, stillbirth, or miscarriage of a child. This legislation aims to support family well-being and enhance employee retention within state employment.
3. Minimum Wage Remains at Federal Level
Alabama does not have a state minimum wage law. As a result, employers in Alabama are required to pay the federal minimum wage, which remains at $7.25 per hour. This rate has not changed since 2009.
4. Child Labor Laws
Alabama enforces specific regulations concerning the employment of minors:
- Ages 14–15: Cannot work before 7 a.m. or after 9 p.m. on any day of the week. Total work hours cannot exceed 8 in a day and 40 in a week, with no more than 6 days in a workweek.
- Ages 16–17: Cannot work between 10 p.m. and 5 a.m. on a night before a school day.
Additionally, minors under 18 are prohibited from engaging in hazardous occupations such as firefighting, roofing, and working with toxic substances.
5. Right-to-Work State
Alabama is a right-to-work state, meaning that employees cannot be compelled to join or pay dues to a labor union as a condition of employment. This status is enshrined in the Alabama Constitution and affects labor relations within the state.
6. Equal Pay and Anti-Discrimination Laws
Alabama labor law prohibits wage discrimination based on sex or race for equal work performed under similar working conditions. Employers may justify wage differences based on seniority, merit, or other non-discriminatory factors. Additionally, the Alabama Age Discrimination in Employment Act protects employees aged 40 and over from age-based discrimination in employment.
7. No State-Level Paid Sick Leave
Alabama does not mandate paid sick leave for employees. Employers are not required by state law to provide paid sick leave, though some may choose to offer it as a benefit. Employees should consult their employer’s policies to determine eligibility for paid sick leave.
8. Workplace Safety and OSHA Compliance
Workplace safety in Alabama is governed by the federal Occupational Safety and Health Administration (OSHA) standards. Employers are required to comply with OSHA regulations to ensure a safe working environment for employees. Alabama does not operate its own state-level occupational safety and health program.
9. Employer Responsibilities
Employers in Alabama are obligated to:
- Comply with federal and state labor laws.
- Maintain accurate records of employee hours worked and wages paid.
- Ensure workplace safety and health standards are met.
- Provide appropriate accommodations for employees with disabilities.
- Adhere to anti-discrimination laws in hiring and employment practices.
10. Resources for Employers and Employees
For more detailed information on Alabama labor laws, employers and employees can refer to the following resources:
- Alabama Department of Labor: Provides information on wage and hour laws, unemployment insurance, and workplace safety.
- S. Department of Labor: Offers federal guidelines on labor standards, including minimum wage, overtime, and child labor laws.
Conclusion
Staying informed about Alabama labor laws is crucial for both employers and employees to ensure compliance and protect rights. While many regulations align with federal standards, recent state-specific changes, such as the end of the overtime pay exemption and the introduction of paid parental leave for state employees, highlight the importance of keeping abreast of legal developments.
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