Compliance Watch:

What are my rights as a salaried employee in Alabama?

In Alabama, a salaried employee is someone who receives a fixed and predetermined payment at the end of each pay period, regardless of how much or how well they work.

Salaried employment in Alabama falls into two categories, depending on whether employees are eligible for overtime pay. The first category includes salaried employees who don’t qualify for overtime pay or compensatory time because they are exempt from overtime regulations. The second category includes non-exempt employees, who  qualify for overtime pay for any hours worked beyond 40 in a work week.

Learn more about Alabama labor laws through our guide on the rights of hourly employees in Alabama.

Here are the key rights and protections that salaried employees in Alabama should know to ensure a fair and respectful workplace:

• Age Discrimination Protection: Employees aged 40 and above are safeguarded from age-related discrimination during hiring and employment processes.
• Veterans’ Hiring Preference: Employers can give veterans an advantage in job applications, but this is voluntary.
• Record Expungement: People with certain past legal issues may have them removed from their records, which means they don’t have to disclose them during job applications.
• Equal Employment for Individuals with Disabilities: Persons with disabilities can have equal job opportunities in public services if their disability doesn’t prevent them from doing the job.
• Right-to-Work: Employees can choose whether or not to join a labor union, and it’s illegal for anyone to make union membership mandatory.
• At-Will Employment: Employees can be terminated at any time and for any reason, as long as it’s not due to discrimination based on factors like race, age, or ethnicity.
• Final Paychecks: Alabama doesn’t have specific rules for the timing of an employee’s final paycheck, except for sales representatives, who must be paid their commissions within 30 days of termination.

Yes, overtime pay is applicable to salaried employees in Alabama under specific circumstances. Salaried employees in Alabama are entitled to overtime pay when they work more than 40 hours in a single work week.

To determine the overtime rate for these salaried employees, employers should calculate their hourly pay rate by dividing the total salary by the number of hours intended to be covered by that salary. Overtime pay, at a rate of one and a half times the regular pay, is applicable only after an employee has worked more than 40 hours in a workweek. If an employee’s salary covers fewer than 40 hours in a workweek, their regular rate will be used for additional hours worked until the 40-hour threshold is reached. To learn more about overtime laws, you can access our guide on Alabama overtime laws.

No. Employers in Alabama are restricted from deducting amounts from an employee’s compensation unless such deductions are permitted by law. Permissible deductions can include things like income tax withholdings and deductions initiated and declared in writing, by the employee. It is imperative to emphasize that employers are not authorized to withdraw funds from an employee’s pay to cover their routine business expenditures.

In Alabama, there are no distinct regulations pertaining to breaks and meal periods. The state aligns with the provisions of the federal Fair Labor Standards Act (FLSA). The responsibility for determining break schedules and arrangements depends on negotiation between employers and their staff. Both parties must be well-informed about their individual entitlements and responsibilities concerning breaks and meal periods.

Alabama state laws do not prescribe an 8-hour limit for a workday but do set a 40-hour limit for a workweek. Consequently, employers within the state have the discretion to provide adaptable work arrangements to their employees.

Common flexible work arrangements in Alabama encompass alternative work schedules, enabling employees to exceed 40 hours in one week and reduce their hours the following week. Additionally, remote work arrangements are prevalent, permitting employees to work outside of the office, provided they fulfill their work responsibilities effectively.

In Alabama, exempt status refers to the classification of certain employees who are exempt from specific labor regulations, particularly pertaining to overtime pay and other related provisions. Exempt employees in Alabama, as in most U.S. states, are typically salaried employees who are exempt from overtime laws as defined by the Fair Labor Standards Act (FLSA).

The implications and benefits of exempt status in Alabama include:

• Minimum Salary Guarantee: Exempt employees in Alabama are typically guaranteed a minimum salary as per FLSA standards, providing financial security and ensuring a baseline level of income.
• Job Autonomy and Responsibility: Exempt positions often come with more decision-making authority and increased responsibility, affording employees the opportunity to take on leadership roles and have a greater impact on their organizations.
• Salary Cap: While there is a guaranteed salary, it may not increase significantly over time, limiting the earning potential compared to roles with variable compensation like hourly pay or commissions.
• High Stress and Responsibility: With autonomy and authority come increased responsibilities, potentially leading to high-stress levels and work-related pressure.
• Benefits and Perks: Exempt employees usually have access to a wider range of benefits, such as health insurance, retirement plans, and paid time off, enhancing their overall compensation and well-being.
• Professional Growth: Employers may invest in the professional development of exempt employees through training and educational opportunities, allowing them to enhance their skills and advance in their careers.
• Job Security and Legal Protections: Exempt status typically provides stronger legal protections, ensuring job security and offering protection in cases of workplace disputes, discrimination, or wrongful termination.

To determine whether you are categorized as an exempt or non-exempt employee in Alabama, it is imperative to adhere to the guidelines established by the Fair Labor Standards Act (FLSA):

• Salary Threshold Examination: If your annual salary surpasses $35,568 per annum, you may be eligible for exempt status.
• Salary Basis Assessment: You could qualify as an exempt employee if you receive a fixed minimum compensation regardless of the number of hours worked.
• Job Duties Evaluation: To qualify as exempt, you must satisfy the criteria of the initial two tests and also hold a job position that falls within exempt categories. These responsibilities may encompass tasks such as overseeing administrative functions, regularly supervising two or more employees, engaging in professional work that necessitates specific education, and making significant decisions based on your discretion.

Alabama’s minimum wage is fixed at $7.25 per hour, as stipulated by the federal Fair Labor Standards Act (FLSA). Notably, Alabama lacks its own state-specific minimum wage law. Federal regulations permit employers to pay a reduced minimum wage of $4.25 per hour to employees under the age of 20 during their initial 90 days of employment. This reduced minimum wage applies only for a limited time from the commencement of employment.

For tipped employees, the minimum wage is set at $2.13 per hour. However, it is imperative to ensure that the combined earnings per hour, inclusive of tips, amount to the federal minimum wage of $7.25 per hour.

As per the Fair Labor Standards Act (FLSA), employers are required to give extra pay to non-exempt employees when they work more than 40 hours in a week. In Alabama, this extra pay must be at least 1.5 times their regular hourly wage.

Moreover, salaried employees with changing work hours have the right to receive overtime pay at half their hourly rate for each hour worked beyond 40 in a week. This is calculated using the “fluctuating workweek” (FWW) method.

To be eligible for FWW, employees must have varying hours each week, get a fixed salary no matter how many hours they work, and earn at least the federal or state minimum wage per hour.

In Alabama, there are strict rules regarding reducing the pay of exempt employees. Usually, if you need to cut an exempt employee’s salary, it should be done in whole-day portions. The only exception is if they’re absent for part of a day due to a reason that aligns with the Fair Labor Standards Act (FMLA). In that case, you can reduce their pay for the time they missed.

Apart from that, you can only make deductions in full-day blocks, and the exempt employee must still receive a full day’s pay for any partial day worked. The following deductions are considered permissible under these guidelines:

• If an employee is absent for personal reasons for one or more full days, excluding sickness or disability.
• When an employee is absent due to sickness or disability for one or more full days, but only if there’s a legitimate plan or policy compensating for illness-related pay loss.
• To account for jury fees, witness fees, or temporary military duty pay received by the employee.
• For penalties imposed in good faith for serious violations of safety rules.
• For unpaid suspensions of one or more full days as a disciplinary measure for workplace rule violations, as long as they are imposed in good faith.
• In the employee’s first or last week of work if they don’t work the whole week.
• For unpaid leave taken under the Federal Family and Medical Leave Act.

Employees in Alabama enjoy a variety of benefits and legal protections under state legislation, which encompass the following:

• Protection Against Discrimination: Alabama’s laws ensure that individuals cannot be subjected to unfair treatment or workplace harassment based on factors such as gender, race, age, or other protected characteristics.
• Prevention of Sexual Harassment: In Alabama, it is unlawful for any person to engage in sexual harassment in the workplace. Employers are expected to maintain a work environment free from any form of harassment or hostility.
• Equitable Treatment for Individuals with Disabilities: The Alabama Fair Employment Practices Act guarantees that employers may not discriminate against individuals with disabilities. Employers are obligated to provide reasonable accommodations, except for when it presents undue hardship.
• Parental Leave and Pregnancy: If employed by a company with a minimum of six employees in Alabama, individuals have the right to take up to eight weeks of unpaid leave for the birth or adoption of a child. This right applies to all employees, regardless of their gender.
• Employers must provide a reasonable break and an allocated room for employees to express breast milk.
• Religious Accommodations: Employees are entitled to request accommodations to practice their religion in Alabama, particularly concerning specific beliefs or practices.

If you find yourself facing a health and safety concern in the workplace, you can contact the Occupational Safety and Health Administration (OSHA) area office that is closest to you. Federal employees who have been discriminated against should reach out to the US Equal Employment Opportunity Commission (EEOC) for assistance. The charge must be filed within 180 days from the date of the alleged violation.