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the small business resource center

Employment Law

Alabama Right-to-Work and At-Will Employment

“Right-to-work” has nothing to do with “at-will.” The Taft-Hartley Act of 1947 allowed the states to prohibit agreements requiring membership in a labor organization as a condition of employment. In 1953 Alabama passed such legislation, and it is incorporated in Title 25-7, Code of Alabama, 1975. Section 25-7-32 states: “No person shall be required by an employer to become or remain a member of any union or labor organization as a condition of employment or continued employment.”

At-will means that the employee or employer can terminate employment on a moment's notice for any reason - good, bad, indifferent -- or no reason at all. Unless the termination violates federal or state law, company policies, or an implied contract, there is very little that an at-will employee can do to protest such action.

For-cause employment means the opposite: the employer cannot discharge the employee without a legitimate reason, hence the term “for-cause.” Examples of situations where an employer cannot fire without good reason:

  1. Your company's employment policy requires for-cause justifications for firing
  2. A contract exists (implied, oral, or written) with the employer that contains such a provision
  3. The employee is a member of a labor union and protected by a collective bargaining agreement
  4. The employee is a government employee under the protection of civil service laws
  5. Employee termination would violate protective state or federal law (such as whistleblower's protection, civil rights, age, or disability protections)

For-cause employment is recognized either in (1) a written employment contract or (2) in some states, the employer’s verbal statements, such as “you'll have a job here as long as your performance is satisfactory.”

Child Labor Provisions

The minimum age for employment outside school hours is 14. The minimum age for most employment is 16, including many manufacturing jobs. However, teenagers under 18 may not work in jobs that have been declared hazardous by the Secretary of Labor. In Alabama, employees under the age of 21 are prohibited from dispensing alcohol in places where those beverages are served for consumption on the premises.

Teenagers under the age of 16 may not exceed 40 hours of work in a week during summer vacation and no more than 18 hours a week when school is in session. Also, during school session, students who are under age 18 may not work past 10:00 P.M. on nights preceding a school day.

All teenagers under age 17 who are employed must obtain a work permit for each job they hold.

Federal Employment Law Employee Thresholds

You need to understand the employment law issues that apply to your business. Non-compliance can lead to high costs in lawsuits and fines. Even with only one employee there are several applicable laws, and most of these laws contain record keeping requirements in addition to operational requirements. The Acts passed by Congress are codified in the U.S. Code, and the regulations that provide particulars for implementation first come out in the Federal Register and are then incorporated in the Code of Federal Regulations.

Federal Employment Law Requirements by company size:

1 or More Employees

ØFair Labor Standards Act (FLSA) wage and hour

ØChild Labor laws

ØEqual Pay Act

ØEmployee Polygraph Protection Act

ØEmployee Invention Rights

ØImmigration Reform and Control Act - Form I-9 Req.

ØOccupational Safety and Health Act (OSHA)

ØHazardous Communications Act (if hazardous materials or chemicals on site)

ØWithholding of federal income taxes

ØWorkers’ Compensation Insurance coverage

ØUnemployment Insurance coverage

ØWithholding of Social Security (FICA) and Medicare

ØForm 5500 required under ERISA if company offers retirement and pension plans, health plans, severance plans, etc.

ØFair Credit Reporting Act

ØNew Hire reporting

ØUniformed Services Employment and Reemployment Rights Act (USERRA)

ØNational Labor Relations Act (NLRA)

ØCivil Rights Acts of 1866 and 1871

2 or More Employees Covered by Group Health

ØHealth Insurance Portability and Accountability Act (HIPPA)

15 or More Employees

ØTitle VII of the Civil Rights Act of 1964

ØAmericans with Disabilities Act

ØPregnancy Discrimination Act

20 or More Employees

ØAge Discrimination of Employment Act (ADEA)

ØConsolidated Omnibus Budget Reconciliation Act of 1983 (COBRA)

50 or More Employees

ØFamily and Medical Leave Act (FMLA)

ØEEO-1 Report (if company is a federal contractor or subcontractor with affirmative action requirement)

100 or More Employees

ØWorker Adjustment and Retraining Notification (WARN) Act

ØEEO-1 Report required by September 30th

Federal Contractors

ØExecutive Order 11246

ØHandicapped AAP

ØVeterans AAP

ØVets-100 due by September 30th

ØDrug Free Workplace Act

ØApplicant Flow Chart

ØSection 503 of the Rehabilitation Act of 1973

ØDavis-Bacon Act wage and hour provisions of $2,000

ØCopeland Act wage standards for all government contracts, regardless of size

ØMcNamara-O’Hara Act wage and hour provisions for federal contractors of $2,500 or more

ØWalsh-Healy Act wage and hour provisions for federal contractors of $10,000 or more.

Alabama New Hire Reporting

As an employer, you are required to report each newly hired or recalled employee to the Department of Industrial Relations. The information must be furnished within seven days from the date of hire or reemployment. (Employers electing to file electronically may do so twice monthly, not less than twelve days nor more than sixteen days apart, when required.) Employers who fail to report newly hired or recalled workers may be fined for each violation. For complete details on reporting requirements, click on: Alabama Department of Industrial Relations New Hire or call (334) 353-8491.

The I-9 Form

The Immigration and Nationality Act requires employers to verify all employees’ identity and eligibility to work in the United States. You must complete a Form I-9 for all employees, even U.S. citizens. The form must be retained and may be requested for review by the Bureau of Immigration and Customs Enforcement (BICE - formerly the Immigration and Naturalization Service or INS) or during a wage and hour audit by the Department of Labor.

Form I-9 requires the employee to produce documents showing his or her eligibility to work in the United States and for you as the employer to examine those documents. Both must sign Form I-9. You then retain the form.

Who must complete an I-9:

  • Form I-9s must be completed and retained for all employees hired after November 6, 1986.
  • This requirement applies to all employers; there is no minimum number of employees.

Not covered:

  • Casual hires
  • Independent contractors
  • Employees of independent contractors
  • Domestic servants in B-1 status
  • B-1 trainees on short-term training programs

How and when the Form I-9 must be completed:

  • Employer must complete Form I-9 within 3 business days of hire
  • If the employee cannot produce verification documents within 3 days, he/she can have up to the 90th day of hire if he/she submits a receipt for an application of replacement documents.
  • In Section 2 of Form I-9, the employer must attest that he/she has examined documents verifying both identity and work eligibility. The I-9 form provides lists of acceptable documents, which duplicates the lists on the I-9 Handbook for Employers.

How long employers must retain the Form I-9:

  • Retain the completed I-9 and make it available for inspection by the BICE or the U.S. Department of Labor until the later of 3 years from the date of hire or one year after termination
  • Employers are advised to have a separate file for I-9 forms for all employees rather than include them in the individual personnel files.