Alabama is one of the five states that has not passed any state legislation setting a minimum wage, which means that it defaults to the federal minimum wage. Given a lack of traction in legislative efforts to improve the minimum on even a local level, Alabama will likely not see any changes for several years.
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2020 Minimum Wage in Alabama: $7.25 per hour
Because Alabama doesn’t have its own minimum wage legislation, it defaults to the federal minimum wage. This effectively sets the minimum wage at $7.25 per hour.
However, there are a few exceptions:
- If the employee is under the age of 20, they can be paid $4.25 per hour for the first 90 days of employment, according to the Fair Labor Standards Act.
- Full-time vocational students can be paid 75% of the minimum wage ($5.44 per hour).
- Full-time students employed part-time at a retail store, in agriculture, or at a college can be paid 85% of the minimum wage ($6.16 per hour).
Tipped: $2.13 per hour
One of the biggest exceptions to the minimum wage affects tipped workers such as servers, bell boys, or drivers. Their minimum wage is significantly lower, under the assumption that tips will fill the gap.
In Alabama, tipped employees can be paid $2.13 per hour. If their tips plus their hourly wage do not add up to at least $7.25 per hour worked, then their employer must make up the difference. Since the minimum wage for tipped workers is so low in Alabama, it’s especially important that everyone follows tip etiquette.
The weekly minimum wage — $290 — is calculated by taking the minimum wage, $7.25, and multiplying it by 40 — the number of hours in a full work week. However, it’s important to remember that not every employee is able to work a full 40 hours a week, and they may see a lower weekly wage as a result.
The annual income while earning the minimum wage is $15,080. This is calculated by taking the weekly minimum wage ($290) and multiplying it by the number of weeks in a year (52). This does not account for holidays, and employees don’t always receive holiday pay.
Depending on an individual’s living situation, $15,080 can be tough to stretch out over a year. Employees can either ask for more hours or for a higher wage. Alternatively, they may explore opportunities in the gig economy.
Overtime: $10.88 per hour
Overtime pay kicks in whenever an employee works over 40 hours a week. For every hour worked over 40 hours, the employee should be paid one and a half times their hourly wage. In Alabama, the minimum wage is $7.25 per hour. One and a half that wage is $10.88 per hour.
Alabama Minimum Wage Increase News
There are no current plans to increase the minimum wage in Alabama. In fact, the state legislature has been extremely resistant to attempts to increase the minimum wage, as illustrated by a decision in 2016 to ban any attempts by cities or towns to increase the local minimum wage.
It seems the greatest hope for a minimum wage increase in Alabama rests on an increase of the federal rate. As there are no developments on that front, it’s safe to say that the Heart of Dixie won’t see an increase at any point in 2020.
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