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Employment relationship

State-specific laws

What state-specific laws govern the employment relationship?

Age discrimination in employment is prohibited (under Ala. Code 25-1-20, and following). The statute follows the federal Age Discrimination in Employment Act coverage (i.e. an employer must have 20 or more employees, and protects persons aged 40 and older). Employees must file an Equal Employment Opportunity Commission charge and comply with the federal Age Discrimination in Employment Act timeliness requirements.

The Worker’s Compensation Act (Ala. Code 25-5-1, and following) applies to anyone who employs a person to perform a service for hire and pays wages directly to that person. Employers must maintain insurance—and can be self-insured. Claims can only be settled with court approval.

Full-time employees serving on juries have job protection (under Ala. Code 12-16-8, 8.1). Employers must pay those full-time employees their regular wages during jury service.

The Alabama Restrictive Covenants Act (Ala. Code 8-1-190, and following) regulates non-competes and non-solicitation agreements.

Alabama has a statute which provides that all commissions due at the time of termination of a contract between a sales representative and a principal must be paid within 30 days from the termination. Any commissions that become due after the termination date must be paid within 30 days from becoming due. Failure to pay as required makes the principal liable for three times the damages, plus reasonable attorney’s fees and court costs (Ala. Code 8-24-1, 2 and 3).

The City of Birmingham passed a non-discrimination ordinance prohibiting discrimination based on “real or perceived race, color, religion, national origin, sex, sexual orientation, gender identity, disability, or family status.” This ordinance applies to any person employing one or more employees in the City of Birmingham. This is a criminal ordinance and the municipal court can levy fines for violations, which cannot exceed $500. The mayor has signed the ordinance but has yet to appoint the Human Rights Commission that is to receive complaints.

Who do these cover, including categories of workers?

See above.


Are there state-specific rules regarding employee/contractor misclassification?



Must an employment contract be in writing?

No, oral contracts are enforceable (subject to the statute of frauds).

Are any terms implied into employment contracts?

No, but in the absence of a specific term, employment is assumed to be at will. 

Are mandatory arbitration agreements enforceable?


How can employers make changes to existing employment agreements?

Courts can enforce the terms of a written agreement and amendment provisions. As a general matter, continued employment is sufficient consideration for an alteration to a term of employment and in the absence of a written agreement, employees are employed at will. Employers should consider new or additional considerations to bolster the enforcement of significant changes to employment terms.

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