Guides

Alabama restaurant pay rules (2026): what to pay tipped and non-tipped staff

Mays TeamApril 22, 2026
The availability Glance View in Mays for the week of April 13, 2026: each person's available and unavailable times day by day, including one employee available only in the late afternoon and evening on weekdays

Alabama has no minimum wage law and no overtime law; its labor department says the state has no laws of its own on wage and hour issues and points employers to the federal rules (Alabama labor department, wage and hour). So a restaurant the federal Fair Labor Standards Act (FLSA) covers pays at least $7.25 an hour, or a $2.13 cash wage to tipped staff whose tips make up the rest. A business with $500,000 or more in yearly sales is covered, and a smaller one can be too (DOL Fact Sheet #14). Where Alabama writes its own rules, they're mostly about teenagers, and about keeping cities out of wages: in February 2016 a state law voided Birmingham's new $10.10 minimum wage the day after the city's mayor signed it (Lewis v. Governor of Alabama (2019)).

This page puts Alabama's figures in one place. It covers what you owe tipped staff like servers and bartenders, what you owe everyone else, and two example weeks with the math shown. Every figure links to the official page it comes from.

Updated September 24, 2026: these figures are still current. The minimum wage for Alabama employers the federal law covers is the federal $7.25 an hour ($2.13 cash wage for tipped employees).

This is general information, not legal advice. Whether a rule applies can depend on your business's size and your own facts; the note at the end says more.

Alabama pay rules at a glance

As of April 22, 2026:

Rule

Alabama

Minimum wage

$7.25 an hour, since July 24, 2009 (the federal rate; Alabama sets no higher one)

Tipped employees: minimum cash wage

$2.13 an hour, if you take the tip credit

Maximum tip credit

$5.12 an hour

Who counts as tipped

Customarily and regularly receives more than $30 a month in tips

Overtime

1.5× the regular rate after 40 hours in a workweek; no daily overtime

Meal and rest breaks for adults

Not required by Alabama or federal law

Sources: US DOL, minimum wage; US DOL, tipped wages by state; US DOL, overtime; Ala. child labor brochure.

Who counts as a tipped employee in Alabama

Alabama has no threshold of its own, so the federal one applies: a tipped employee is someone who customarily and regularly receives more than $30 a month in tips (US DOL, tipped wages by state).

In a restaurant that usually means servers, bartenders, bussers and counter staff who serve customers, including baristas who get tips. Cooks and dishwashers usually aren't tipped employees. Only tips the employee actually receives count. If someone works two jobs, say a server who also works prep shifts, the tip credit applies only to the hours in the tipped job (DOL Fact Sheet #15).

What you must pay tipped staff in Alabama

Servers, bartenders, bussers and baristas who get tips can be paid a lower cash wage, with part of their tips counted toward the minimum wage. That's the tip credit, and it comes with conditions:

  • Pay at least $2.13 an hour in cash wages. That's the $7.25 minimum wage minus the most you can credit from tips, $5.12 (US DOL, tipped wages by state).
  • Cash wages plus tips must reach $7.25 for every hour worked, week by week. If tips fall short in a workweek, you pay the difference by the regular payday for that week (DOL Fact Sheet #15).
  • Tell them first. Before you take the tip credit, tell each tipped employee, in writing or out loud: the cash wage you pay, the tip credit you claim, that the credit can't be more than the tips they actually get, that they keep all their tips except through a valid tip pool, and that the credit doesn't apply unless you've told them all this (DOL Fact Sheet #15).
  • Overtime is figured on the full minimum wage. An overtime hour is worth 1.5 × $7.25 = $10.875. After the $5.12 tip credit, you pay at least $5.755 of it in cash wages (DOL Fact Sheet #15).

You don't have to take the tip credit. If you pay tipped staff the full $7.25 an hour, their tips are all on top, there's nothing to make up at the end of the week, and you can put kitchen staff in the tip pool (see below).

What you must pay non-tipped staff in Alabama

Cooks, dishwashers, prep cooks, and cashiers or counter staff who don't get tips are paid like any other hourly employee:

  • At least $7.25 an hour for every hour worked (US DOL, minimum wage). No tip credit applies.
  • The same goes for a tipped employee's hours in a non-tipped job, like a server's prep shift (DOL Fact Sheet #15).
  • Overtime is at least 1.5 times their regular rate for hours over 40 in a workweek. At $7.25 an hour, that's $10.875 (US DOL, overtime).
  • Can they share in the tip pool? Only if you take no tip credit and pay everyone in the pool at least the full minimum wage. If you take a tip credit, a pool you require can include only staff who customarily and regularly receive tips (US DOL, tips). Managers and supervisors can never take from the pool.

Worked examples (made-up numbers)

The names, hours and tips below are made up. The rates are the federal ones that apply in Alabama as of April 22, 2026.

A server's week: when you have to top up

Sam is a server paid the $2.13 cash wage. He works 37 hours in each of two weeks: a busy one with $440.00 in tips and a slow one with $120.00.


Busy week

Slow week

Hours worked

37

37

Cash wages (37 × $2.13)

$78.81

$78.81

Tips received

$440.00

$120.00

Cash wages + tips

$518.81

$198.81

Minimum for the week (37 × $7.25)

$268.25

$268.25

You pay on top

$0.00

$69.44

In the slow week, $120.00 in tips covers only part of the $189.44 tip credit (37 × $5.12), so you pay the difference by the regular payday: $268.25 − $198.81 = $69.44. In the busy week you owe nothing extra, and every dollar of tips is still Sam's.

A cook's week with overtime

Ana is a line cook paid the federal minimum wage, $7.25 an hour. Over five days she works 9, 10, 8, 10 and 9 hours: 46 hours in all.


Hours

Rate

Pay

Regular hours

40

$7.25

$290.00

Overtime hours (over 40)

6

$10.875 (1.5 × $7.25)

$65.25

Total

46


$355.25

Overtime is counted by the workweek, and hours can't be averaged across two weeks: a long week earns overtime even if the next one is short (US DOL, overtime). Bonuses can change the rate too; see Time clock, breaks and overtime: first-month payroll mistakes to avoid.

Tip pooling rules in Alabama

No specific Alabama rule found — federal rules apply (Alabama labor department, wage and hour). Under federal law (US DOL, tips):

  • The business, its managers and supervisors never keep employees' tips. A manager can't take anything from a pool; they may keep only tips for service they directly and solely provide. An owner with a real stake who helps run the business counts as a manager too.
  • With a tip credit, a pool you require can include only staff who customarily and regularly receive tips: servers, bartenders, bussers, counter staff who serve customers.
  • Without a tip credit, when everyone in the pool gets at least the full minimum wage, you can include cooks and dishwashers.
  • Card fees: you may reduce a card tip by the percentage the card company actually charges you, and no more (DOL Fact Sheet #15).
  • Service charges aren't tips. Money you share with staff from a mandatory service charge is wages, and it counts in the regular rate for overtime (DOL Fact Sheet #15).
  • Pay pooled tips out by the regular payday for the week or pay period (DOL Fact Sheet #15).

How to split a pool fairly, with a worked example: Tip pooling for new restaurant owners.

Overtime in Alabama

Alabama has no overtime law of its own (Alabama labor department, wage and hour), so the federal rule applies: non-exempt employees get at least 1.5 times their regular rate for hours over 40 in a workweek (US DOL, overtime).

A workweek is any fixed, recurring stretch of seven days that you choose, and hours can't be averaged across two weeks. There's no daily overtime, no double time and no seventh-day premium under Alabama or federal law, and weekend or holiday hours don't earn a premium by law.

For tipped staff, overtime is figured on the full minimum wage, not the cash wage (see the tipped section above).

A state tax break on overtime. A law signed on April 16, 2026 lets employees deduct the premium part of their overtime pay, up to $1,000 a year, from their Alabama income tax for 2026 through 2028. It doesn't change what you owe; the state revenue department explains how the premium is reported (Ala. Dept. of Revenue, overtime deduction).

Breaks in Alabama

  • Meal breaks: No specific Alabama rule found — federal rules apply (Ala. child labor brochure). The FLSA does not require meal periods. A bona fide meal period (typically 30+ minutes) is not work time (US DOL, breaks).
  • Rest breaks: No specific Alabama rule found — federal rules apply (Ala. child labor brochure). The FLSA does not require breaks. Short breaks an employer offers (about 5 to 20 minutes) are paid work time (US DOL, breaks).
  • Minors: 14 and 15: no more than five hours in a row without a documented break of at least 30 minutes for a meal or rest; a shorter break does not interrupt the five hours. For every employee under 19, keep time records showing the hours worked each day, the starting and ending times and the break times (Code of Ala. § 25-8-38).

Other Alabama rules that affect pay

  • Paid sick leave: No specific Alabama rule found — federal rules apply (Alabama labor department, wage and hour). No federal paid sick leave requirement. The FMLA provides unpaid, job-protected leave (up to 12 weeks) where it applies (US DOL, sick leave).
  • Food handler training: A certified food protection manager or person in charge is required on every shift. Who: at priority category 3 and 4 establishments (those that handle unpackaged raw animal foods, for example), a person in charge with a valid certification from an accredited program, or verified attendance at one, present during all hours of operation (Ala. Admin. Code r. 420-3-22-.02).

Young workers

  • A child labor certificate. Employing 14- and 15-year-olds takes a Class I certificate, and 16- and 17-year-olds a Class II, at $15 per location, issued every year (Ala. Dept. of Workforce, child labor; Code of Ala. § 25-8-45).
  • Hours. While school is in session, 14- and 15-year-olds work no more than 3 hours on a school day or 18 in a school week, and not after 7 p.m.; students aged 16 to 18 can't work between 10 p.m. and 5 a.m. on a night before a school day (Code of Ala. § 25-8-36).
  • No under-16s where alcohol is served. A restaurant that serves alcohol for drinking on the premises can't employ anyone under 16; from 16, they can work as bussers, dishwashers, cooks or hosts (Code of Ala. § 25-8-44).
  • Servers under 21. Staff aged 18 to 20 can serve alcohol as servers or bussers in a restaurant that's certified every year as a responsible vendor, but can't tend bar or pour (Code of Ala. § 28-1-5).
  • The poster. A child labor poster (the 2024 version or later) goes up at every location that employs anyone 18 or younger (Ala. child labor brochure).

Other Alabama rules

  • No payday or final-pay law. Alabama sets no rules of its own on how often you pay or when final pay is due (US DOL, state paydays).
  • Jury duty is paid. A full-time employee summoned for jury duty gets their usual pay, and you can't make them use vacation or sick leave for it (Code of Ala. § 12-16-8).
  • E-Verify. Every employer in Alabama enrolls in E-Verify (Code of Ala. § 31-13-15).

Local rates in Alabama

Alabama law bars cities and counties from requiring private employers to pay a minimum wage other than the state or federal one, or to provide employment benefits, such as paid sick leave, that state or federal law doesn't require (Code of Ala. § 25-7-41). The same 2016 law says the state occupies the whole field of wages, leave and other employment benefits (Code of Ala. § 25-7-45). It was signed the day after Birmingham's mayor signed an ordinance raising the city's minimum wage to $10.10 an hour, and voided it (Lewis v. Governor of Alabama (2019)). So the federal $7.25 minimum wage applies everywhere in Alabama, and there's no local rate table for Alabama.

How Mays helps

Mays runs the schedule, time clock, tip pool and payroll export for each location. For Alabama pay rules, that means:

  • Positions and wages. Give each position a default hourly wage, for example the tipped cash wage for servers and at least the minimum wage for cooks. Turn on Labor law compliance and Mays looks up each location's minimum wage from its address and warns you when a position's default wage, someone's hourly wage or a punch is below it, comparing tipped positions with the tipped cash wage when it has that figure. It never blocks the save.
  • A tip pool per location. Split pooled tips by hours worked, equally or by FTAR score, per pay period or day by day, and choose which positions receive. Until you pick positions under Who receives, the positions marked Tipped share the tips; if no position is marked, everyone who worked does, cooks included. So if you take a tip credit, tick Tipped position only on positions whose staff get tips, or pick them yourself. A punch with no position counts under its shift's position, or else the person's primary or only position at that location; with neither, its hours get no share, and the tip pool card shows how many punches that leaves out. Leave managers and admins out of the pool is on by default, so leave it on. The tips come from your connected POS at that location (Square or Union) or from tips synced with 7shifts time punches, and each person's share appears in the Tip Payouts report and the payroll export. If you take your card processor's fee out of card tips, turn on Labor law compliance and Deduct the card processing fee from card tips: Mays deducts only your processor's percentage, split in proportion to each person's card tips, and shows it on the pay period and in the export.
  • The tip-credit make-up is yours to check. Mays doesn't compare a tipped employee's cash wages plus tips with the minimum wage, so check each workweek the way the server example above does.
  • Time clock and timesheets. Staff clock in on their phone, a shared kiosk or an NFC tag. Timesheets run by pay period. Overtime is counted by the workweek, and with Labor law compliance on, by any daily, double-time and seventh-day rule the location's state sets too, which Mays reads from its address; the schedule's labor cost, the reports and the pay summary all include it.
  • Payroll export. A standard CSV or a Gusto-format CSV with regular and overtime hours and pooled tips for each employee. A card surcharge you share with staff goes in as wages, not tips.
  • Minors. Turn on Labor law compliance and work rules for minors at a location, and Mays warns you when a shift breaks a minor's hours or time-of-day limits under federal law, and the auto-scheduler won't put a minor on one. It doesn't track minors' breaks yet, so build a minor's meal break into their shifts when you schedule them.
  • A certified person on every shift. Turn on Labor law compliance and keep food handler and manager certificates in Mays with their expiry dates. Before you publish, the schedule warns about any stretch with nobody certified on shift, and Mays reminds people before a certificate expires.
  • Availability at a glance. Record a student's after-school hours as their availability, and the Glance View under Availability shows everyone's available times for the week; the schedule warns when a shift falls outside someone's available hours. The minors check above uses federal limits, not Alabama's own, so check a young worker's shifts against Alabama's hour limits yourself.
  • Break times on record. Breaks started and ended at the time clock are saved with each punch, and Alabama wants hours, start and end times and break times on file for every worker under 19 (Code of Ala. § 25-8-38). Keep those records for at least a year.

Sources

Every figure on this page comes from these official pages, as they read on the date shown.

This page is general information, not legal advice. Laws change, and coverage rules (your business's size, whether federal law covers you) decide which of them apply. Check the pages above, and ask an employment lawyer or accountant about your situation.

Run Alabama payroll on the right numbers

Set each position's wage, turn on the tip pool with managers left out, and let the time clock count overtime by the workweek. Then payroll is an export, not an evening.

Start your free trial: 30 days, every module, no card needed. Setting up a tip pool? Read Tip pooling for new restaurant owners.