Alabama’s workers’ compensation rates and rules require most employers with five or more employees to carry coverage, pay injured workers two-thirds of their pre-injury weekly wages up to $1,172 per week as of July 1, 2025, and cover the full cost of medical treatment. Written notice of the injury has to reach your employer within 90 days, and any lawsuit has to be filed within two years. Disputed claims here go through circuit court rather than an administrative agency, which sets Alabama apart from most other states.
Who Alabama’s System Covers
Any Alabama employer with five or more employees, part-time workers included, must carry workers’ compensation insurance or qualify as a self-insurer.1Alabama Legislature. Alabama Code 25-5-50 – Applicability; Exemptions; Coverage for School Boards, Volunteer Fire Departments, and Rescue Squads Construction employers building new single-family homes need coverage no matter how few people they employ.
Domestic employees, farm laborers, casual workers whose jobs are outside the employer’s usual business, and municipalities under 2,000 in population all fall outside the system.1Alabama Legislature. Alabama Code 25-5-50 – Applicability; Exemptions; Coverage for School Boards, Volunteer Fire Departments, and Rescue Squads Independent contractors also have no access to benefits, though workers labeled as contractors are sometimes misclassified and may still qualify if the hiring company controls the details of their work.
Your injury must arise out of and in the course of your employment.2Alabama Legislature. Alabama Code 25-5-1 – Definitions Assaults by a coworker or third party for purely personal reasons are not covered, and mental injuries are compensable only when they stem from a physical injury.
Reporting Deadlines You Cannot Miss
Two separate notice clocks run from the day you are hurt. Written notice to your employer within five days is the first.3Alabama Legislature. Alabama Code 25-5-78 – Written Notice to Employer of Accident – Required Missing that window does not automatically end your claim, but it cuts off medical fees and any compensation that accrued during the delay unless you can show physical or mental incapacity, fraud by the employer, or another equally good reason.
The 90-day deadline is absolute. No compensation is payable unless written notice reaches your employer within 90 days of the accident, or within 90 days of death if the injury proves fatal.3Alabama Legislature. Alabama Code 25-5-78 – Written Notice to Employer of Accident – Required There are no exceptions. Include the date, time, and location of the accident along with how you were hurt. Many employers accept their own incident report form.
Wage Replacement Rates
Wage benefits pay 66⅔ percent of your average weekly earnings before the injury, but nothing begins until day four. Alabama imposes a three-day waiting period. If your time off work runs past 21 days, the insurer goes back and pays for those first three days. Carriers can waive the waiting period upfront when it is obvious the disability will last longer than 21 days.
Weekly maximums and minimums track the statewide average weekly wage and reset every July 1.4Alabama Legislature. Alabama Code 25-5-68 – Maximum and Minimum Weekly Compensation The maximum equals 100 percent of the state average weekly wage; the minimum equals 27.5 percent. As of July 1, 2025, that puts the maximum at $1,172 and the minimum at $322. If you earned less than the minimum before your injury, you receive your full weekly earnings instead.
Temporary Total Disability
If you are completely out of work on a temporary basis, you receive 66⅔ percent of your pre-injury average weekly wage, subject to the maximum and minimum.5Alabama Legislature. Alabama Code 25-5-57 – Compensation for Disability Payments continue for the duration of your disability, up to 300 weeks.
Temporary Partial Disability
If you can return to work at reduced earnings, benefits are 66⅔ percent of the difference between your old weekly earnings and your current earnings, subject to the same weekly cap.5Alabama Legislature. Alabama Code 25-5-57 – Compensation for Disability
Permanent Disability Benefits
Once your treating physician says you have reached maximum medical improvement and lasting limitations remain, permanent disability benefits may apply. The rate stays at 66⅔ percent of pre-injury earnings, but the weekly cap and the number of weeks depend on the type of loss.
Scheduled Losses
Alabama assigns a fixed number of weeks for the loss of specific body parts:5Alabama Legislature. Alabama Code 25-5-57 – Compensation for Disability
- Arm: 222 weeks
- Hand: 170 weeks
- Leg: 200 weeks
- Foot: 139 weeks
- Eye: 124 weeks
- Thumb: 62 weeks
- Index finger: 43 weeks
- Hearing loss, both ears: 163 weeks
- Hearing loss, one ear: 53 weeks
Loss of two major limbs, or combinations such as an arm and a leg, pays 400 weeks. A partial phalange of a finger or toe pays half the full digit’s weeks.
The $220 Weekly Cap on Permanent Partial Disability
This is where Alabama’s system is unusually harsh. Permanent partial disability is capped at the lesser of $220 per week or 100 percent of the statewide average weekly wage.4Alabama Legislature. Alabama Code 25-5-68 – Maximum and Minimum Weekly Compensation The $220 figure is written into the statute and does not adjust each year. Temporary total disability may pay up to $1,172 a week, but a worker who loses a hand collects at most $220 a week for 170 weeks. That totals no more than $37,400. It is one of the lowest permanent partial disability caps in the country and often surprises injured workers.
Medical Care and Choosing a Doctor
Your employer pays the full cost of reasonably necessary treatment tied to your injury: surgery, hospital care, prescriptions, and rehabilitation.6Alabama Legislature. Alabama Code 25-5-77 – Expenses of Medical and Surgical Treatment, Vocational Rehabilitation, Medicine, Etc. There is no time limit on medical benefits as long as treatment stays medically justified.
Alabama gives the employer the right to pick your initial treating physician.7Alabama Department of Labor. Workers’ Compensation Medical In a genuine emergency you can use any available provider, but once the emergency passes, care shifts to the employer’s chosen doctor.
If you are unhappy with that physician and still need treatment, you can request a change in writing. The employer must then give you a panel of four alternative physicians, and you pick one.6Alabama Legislature. Alabama Code 25-5-77 – Expenses of Medical and Surgical Treatment, Vocational Rehabilitation, Medicine, Etc. A separate panel of four applies for surgery. If four qualified providers are not available in your area, the employer lists as many as are available. The physician you select from the panel becomes your authorized provider for the rest of the claim, and seeing an unauthorized doctor on your own usually means the insurer refuses to pay those bills.
Travel to and from medical and rehabilitation appointments is reimbursed at the same rate Alabama uses for official state travel.6Alabama Legislature. Alabama Code 25-5-77 – Expenses of Medical and Surgical Treatment, Vocational Rehabilitation, Medicine, Etc.
If your treating physician says you cannot return to your former job, you may qualify for vocational rehabilitation at the employer’s expense. Both a vocational rehabilitation specialist and your treating physician must agree in writing that rehabilitation is reasonably calculated to restore you to gainful employment. If training requires temporary relocation, the employer covers reasonable board, lodging, and travel.6Alabama Legislature. Alabama Code 25-5-77 – Expenses of Medical and Surgical Treatment, Vocational Rehabilitation, Medicine, Etc.
Death Benefits
When a workplace injury causes death, dependents receive the compensation. A single dependent gets 50 percent of the deceased worker’s average weekly earnings; two or more dependents share 66⅔ percent.8Alabama Legislature. Alabama Code 25-5-60 – Compensation for Death Payments run for the period of dependency up to 500 weeks and use the same weekly maximum and minimum that apply to disability benefits. Partial dependents receive a proportional share based on how much the worker regularly contributed to their support.
When You Can Sue Beyond Workers’ Compensation
In exchange for providing coverage, Alabama employers get broad immunity from injury lawsuits. You generally cannot sue your employer in civil court for a covered workplace injury. The main exception is willful conduct by a coworker, supervisor, or officer, which lets you bring a separate civil action against that person. Alabama defines willful conduct three ways: acting with a purpose or intent to injure; knowingly removing a manufacturer’s safety guard from machinery where injury is likely; or intoxication of a coworker whose impairment contributed to the injury.9Alabama Legislature. Alabama Code 25-5-11 – Actions Against Persons Other Than Employer The standard is high and these claims are difficult to win.
Disputes: Mediation, Then Circuit Court
Most disagreements start with the state’s ombudsman program, which offers free mediation with a neutral third party.10Workforce Alabama. Ombudsman Program Mediation is voluntary and either side can end it.
If mediation fails, Alabama sends you to circuit court rather than to an administrative board. You file a complaint in the county where the injury happened or where the employer has a place of business, the court issues a summons, and the employer has 30 days to respond. The process runs like any civil lawsuit and typically takes months to reach judgment or settlement.
Two-Year Statute of Limitations
You have two years from the date of the accident to file a formal claim or reach an agreement on compensation. For cumulative physical stress injuries, the two-year clock starts when the injury is identified. If the worker dies from the injury, dependents have two years from the date of death, provided death occurred within three years of the accident.11Alabama Legislature. Alabama Code 25-5-80 – Limitation Period for Claims or Actions One important wrinkle: if the insurer is making compensation payments, the two-year period does not start running until the last payment is made. Physical or mental incapacity extends the deadline to two years after the incapacity ends.
Attorney Fees
Alabama caps attorney fees in workers’ compensation cases at 15 percent of the compensation awarded or paid, and the court must approve both the fee and how it will be paid.12Alabama Legislature. Alabama Code 25-5-90 – Proceedings for Determination of Compensation Your lawyer cannot take a percentage without judicial sign-off.
Social Security Disability Offset
If you collect workers’ compensation and Social Security disability at the same time, your combined payments cannot exceed 80 percent of your average earnings before the disability. Once you cross that threshold, the Social Security Administration reduces your disability check by the excess.13Social Security Administration. How Workers’ Compensation and Other Disability Payments May Affect Your Benefits The reduction continues until you reach full retirement age or your workers’ compensation payments stop, whichever comes first. Lump-sum settlements can also trigger a reduction. Veterans Administration benefits, Supplemental Security Income, and state or local government benefits where Social Security taxes were already deducted are exempt from the offset. You have to report any change in your workers’ compensation payments to Social Security.
Fraud Penalties
Making a false statement to obtain workers’ compensation benefits is a Class C felony in Alabama, punishable by up to 10 years in prison and a fine of up to $15,000. The statute covers workers who fake or exaggerate injuries as well as employers and providers who submit fraudulent claims. A fraud finding also destroys your ability to collect any legitimate benefits from the same injury.