Alabama salary laws come almost entirely from federal law. The state has no minimum wage, overtime, or wage-payment statute of its own for private employers, so the Fair Labor Standards Act (FLSA) controls how salaried employees in Alabama must be paid, when they are owed overtime, and what an employer can legally deduct from their checks. A handful of Alabama-specific rules fill in around the edges, mainly on garnishment and pay-frequency practice.
The single most important question for any salaried worker in the state is whether they are exempt or non-exempt. That classification decides whether overtime is owed at all, and it drives the deduction rules that follow.
When a Salaried Employee Is Exempt From Overtime
A salary alone does not make anyone exempt. To lawfully treat a salaried employee as exempt from overtime under the FLSA’s white-collar rules, an Alabama employer has to clear two separate bars: a salary threshold and a duties test.
The Salary Threshold
The employee must earn at least $684 per week, which works out to $35,568 per year, on a salary basis. A federal court vacated the Department of Labor’s 2024 rule that would have raised that floor, so the $684 figure from the 2019 rule remains in effect.1U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemption “Salary basis” means the employee receives a fixed, predetermined amount each pay period that the employer cannot reduce based on the quality or quantity of the work performed.2U.S. Department of Labor. Fact Sheet 17G – Salary Basis Requirement and the Part 541 Exemptions Under the Fair Labor Standards Act
Highly compensated employees earning at least $107,432 per year face a lighter duties test, but they still have to meet the weekly salary minimum.
The Duties Test
Clearing the salary threshold is only half the analysis. The employee’s actual day-to-day work has to fit one of the FLSA’s exempt categories:
- Executive: the employee’s primary duty is managing the business or a recognized department, they regularly direct at least two full-time workers, and they have genuine authority over hiring and firing.3U.S. Department of Labor. Fact Sheet 17B – Exemption for Executive Employees Under the Fair Labor Standards Act
- Administrative: the employee performs office or non-manual work tied to management or general business operations and exercises independent judgment on matters that genuinely affect how the business runs.4eCFR. 29 CFR Part 541 – Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Computer and Outside Sales Employees
- Professional: the work requires advanced knowledge in a field of science or learning, typically acquired through prolonged specialized study, or involves recognized creative or intellectual ability.
Computer employees and outside salespeople have their own separate tests. Computer workers can be paid on a salary or hourly basis (at least $27.63 per hour if hourly), and outside sales employees have no minimum salary requirement.
Job Titles Do Not Control
Calling someone a manager does not make them one. In Morgan v. Family Dollar Stores, Inc., a jury found that store managers who spent most of their shifts stocking shelves, running registers, and cleaning were not exempt executives despite their title. The Eleventh Circuit upheld the verdict along with a finding of willful overtime violations.5FindLaw. Morgan v. Family Dollar Stores Inc (2008) What the employee actually does each week controls, not what the job description says.
Overtime for Non-Exempt Salaried Employees
A salary does not eliminate the overtime obligation. Every non-exempt employee in Alabama who works more than 40 hours in a workweek must receive at least one and a half times their regular rate for each hour over 40, even if they are paid a fixed weekly salary.6U.S. Department of Labor. Wages and the Fair Labor Standards Act
Standard Calculation
If a non-exempt salary is intended to cover a 40-hour week, divide the weekly salary by 40 to get the regular hourly rate, then multiply that rate by 1.5 for each overtime hour. An employee earning $800 per week has a regular rate of $20 an hour and an overtime rate of $30.
Fluctuating Workweek Method
When a non-exempt salaried employee’s hours genuinely vary from week to week and both sides understand that the fixed salary covers all hours worked, the employer can use the fluctuating workweek method. The regular rate changes each week because the same salary is spread across a different number of hours, and the employer owes an additional half-time premium (not time-and-a-half) for each overtime hour, since the salary already compensates the straight-time portion.7eCFR. 29 CFR 778.114 – Fluctuating Workweek Method of Computing Overtime The method only works where hours actually fluctuate; it cannot be used for employees who consistently work the same schedule.8U.S. Department of Labor. Fact Sheet 82 – Fluctuating Workweek Method of Computing Overtime Under the Fair Labor Standards Act
Bonuses and Commissions Roll Into the Regular Rate
The regular rate used to calculate overtime includes almost all compensation tied to the employee’s work. Non-discretionary bonuses, productivity incentives, and commissions have to be folded in before the overtime multiplier is applied. Only truly discretionary bonuses, where the employer decides both whether to pay and how much at or near the end of a period with no prior promise, sit outside the calculation.9Office of the Law Revision Counsel. 29 USC 207 – Maximum Hours Employers who skip this step underpay overtime on every bonus-eligible hour.
What Can Be Deducted From a Salary
Deduction rules split along the same exempt/non-exempt line. Improperly docking an exempt employee’s salary can do more than shortchange them for that pay period; it can destroy the exemption entirely and convert that employee into someone who is owed overtime going back years.
Deductions From Exempt Pay
The salary-basis rule generally prohibits reducing an exempt employee’s pay for partial-day absences or for variations in the quality or quantity of work. Deductions are allowed only in a short list of situations:
- Full-day personal absences unrelated to sickness.
- Full-day sickness or disability absences, if the employer has a bona fide paid-leave plan and the deduction follows that plan.
- Unpaid FMLA leave, where the employer may pay only for the portion of the week actually worked.
- Full-day disciplinary suspensions imposed under a written workplace-conduct policy that applies to all employees.
- Penalties for breaking safety rules of major significance, such as rules preventing serious physical danger.
- The first or last week of employment, prorated to the time actually worked.
Anything outside those categories puts the exemption at risk.10eCFR. 29 CFR 541.602 – Salary Basis
Safe Harbor for Mistakes
An employer that accidentally makes an improper deduction does not automatically lose the exemption. Protection is available if the employer maintains a clearly communicated policy prohibiting improper deductions, provides a complaint mechanism, and reimburses employees promptly when errors surface. The safe harbor disappears if the employer keeps making the same deductions after receiving complaints.11eCFR. 29 CFR 541.603 – Effect of Improper Deductions From Salary
Deductions From Non-Exempt Pay
Employers have more latitude with non-exempt workers, but one hard rule applies: no deduction can push the employee’s effective pay below the federal minimum wage of $7.25 per hour for that workweek, and no deduction can cut into required overtime compensation. That limit covers charges for uniforms, tools, equipment damage, cash-register shortages, and customer nonpayment. It holds even when the loss was the employee’s fault, and employers cannot work around it by asking the worker to reimburse the cost in cash.12U.S. Department of Labor. Fact Sheet 16 – Deductions From Wages for Uniforms and Other Facilities Under the Fair Labor Standards Act Legally required withholdings such as federal income tax, Social Security, and court-ordered garnishments are always permitted.
Pay Frequency and Final Paychecks
Alabama does not require any particular pay schedule for private employers. Weekly, biweekly, semimonthly, and monthly payroll cycles are all permitted. Wages must be paid without unreasonable delay, and any employment contract or collective bargaining agreement can impose a tighter timeline.
There is also no separate final-paycheck statute. When an employee resigns or is terminated, the employer must deliver the last paycheck by the next regularly scheduled payday. Alabama does not accelerate that deadline for involuntary separations the way some other states do, so someone fired on a Monday with a biweekly pay cycle may have to wait until the next scheduled payday to receive their final wages.
Garnishment Limits on Alabama Paychecks
Federal law caps garnishment for most debts at the lesser of 25% of an employee’s disposable earnings for that week or the amount by which disposable earnings exceed 30 times the federal minimum wage, which comes to $217.50 per week at the current $7.25 rate.13Office of the Law Revision Counsel. 15 USC 1673 – Restriction on Garnishment Disposable earnings are what remains after deductions required by law.
Alabama applies a tighter cap for consumer debts under the Alabama Consumer Credit Act. For debts created on or after April 12, 1988, garnishment is limited to the lesser of 20% of disposable earnings or disposable earnings minus $217.50. For non-consumer debts, the federal 25% ceiling applies. Child support and alimony orders operate under a different framework and can reach 50% or 65% of disposable earnings depending on the employee’s circumstances.
Recordkeeping and Pay Stubs
Alabama defers to the FLSA on recordkeeping. Employers have to maintain payroll records for at least three years, including each employee’s hours worked per day and per week, wage rates, total earnings, and every addition to or deduction from wages.14U.S. Department of Labor. Fact Sheet 21 – Recordkeeping Requirements Under the Fair Labor Standards Act Supporting documents like time cards and wage-rate tables must be kept for at least two years.
Alabama does not require employers to hand out written pay stubs. That said, incomplete records almost always benefit the employee in a wage dispute, because in Anderson v. Mt. Clemens Pottery Co. the Supreme Court held that when an employer fails to keep required records, employees can prove their hours through their own testimony and reasonable estimates, and the burden shifts to the employer to disprove those estimates.15Justia Law. Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946)
Recovering Unpaid Wages
Alabama has no state wage-and-hour enforcement agency for private-sector employees, so unpaid-wage claims go directly to the federal Department of Labor’s Wage and Hour Division. There is no fee to file, and the WHD investigates on the employee’s behalf.16U.S. Department of Labor. How to File a Complaint
Employees can also sue directly. Under the FLSA, the statute of limitations is two years from the date each missed payment was due, extending to three years if the violation was willful.17Office of the Law Revision Counsel. 29 USC 255 – Statute of Limitations A successful claim recovers the full amount of unpaid wages plus an equal amount in liquidated damages, effectively doubling the recovery, along with attorney’s fees and court costs.18U.S. Department of Labor. Back Pay Every pay period that slips past the two- or three-year window cannot be recovered later, so acting sooner protects more of the claim.