Payroll Alabama, Unique Aspects of Alabama Payroll Law and Practice

The Alabama State Agency that oversees theThis information must be reported within 7 days of
collection and reporting of State income taxesthe hiring or rehiring.
deducted from payroll checks is:The information can be sent as a W4 or equivalent
Department of Revenueby mail, fax or electronically.
Income Tax DivisionThere is a $25.00 penalty for a late report in
Withholding Tax SectionAlabama.
50 North Ripley St.The Alabama new hire-reporting agency can be
P.O. Box 327480reached at 334-353-8491 or on the web at
Montgomery, Alabama 36132-7480Alabama does allow compulsory direct deposit but
334-242-1300the employee's choice of financial institution must
Alabama requires that you use Alabama form "A-4,meet federal Regulation E regarding choice of financial
Employee's Withholding Exemption Certificate" insteadinstitutions.
of a Federal W-4 Form for Alabama State IncomeAlabama has no State Wage and Hour Law
Tax Withholding.provisions concerning pay stub information.
Not all states allow salary reductions made underIn Alabama there are no statutory requirements
Section 125 cafeteria plans or 401(k) to be treated inconcerning pay frequency or the lag between when
the same manner as the IRS code allows. In Alabamathe lag time between when the services are
cafeteria plans: are not taxable for income taxperformed and when the employee must be paid.
calculation; are taxable for unemployment insuranceNor for that matter does Alabama have legal
purposes. 401(k) plan deferrals are: not taxable forprovisions concerning when a terminated employee,
income taxes; are not taxable for unemploymentvoluntary or involuntary, must be paid.
purposes.Deceased employee's wages must be paid when
In Alabama supplemental wages are taxed at a 5%normally due to the surviving spouse or custodian of
flat rate.minor children.
You may file your Alabama State W-2s by magneticEscheat laws in Alabama require that unclaimed
media if you choose to.wages be paid over to the state after one year.
The Alabama State Unemployment Insurance AgencyThere is no provision in Alabama law concerning
is:record retention of abandoned wage records.
The Department of Industrial RelationsThere is no provision in Alabama law concerning tip
649 Monroe Streetcredits against State minimum wage.
Montgomery, Alabama 36131In Alabama the payroll laws covering mandatory rest
334-242-8990or meal breaks are only that: minors under 16 must
The State of Alabama taxable wage base forhave 30 minutes rest after five hours of work.
unemployment purposes is wages up to $8000.00.There is no provision in Alabama law concerning
Alabama requires Magnetic media reporting ofrecord retention of wage and hour records therefor
quarterly wage reporting if the employer has at leastit is probably wise to follow FLSA guidelines.
250 employees that they are reporting that quarter.The Alabama agency charged with enforcing Child
Unemployment records must be retained in AlabamaSupport Orders and laws is:
for a minimum period of five years. This informationAlabama Department of Human Resources
generally includes: name; social security number; datesChild Support Enforcement Division
of hire, rehire and termination; wages by period;50 Ripley St.
payroll pay periods and pay dates; date andMontgomery, AL 36130-1801
circumstances of termination.334-242-9300
The Alabama State Agency charged with enforcingAlabama has the following provisions for child support
the state wage and hour laws is:deductions:
The Department of Industrial RelationsWhen to start Withholding? Immediately after receipt
649 Monroe Streetof order.
Montgomery, Alabama 36131When to send Payment? Within 7 days of Payday.
334-242-8990When to send Termination Notice? "Promptly"
There is no provision for minimum wage in the StateMaximum Administrative Fee? $2 per month.
of Alabama.Withholding Limits? Federal Rules under CCPA.
There is also no general provision in Alabama StatePlease note that this article is not updated for
Law covering paying overtime in a non-FLSA coveredchanges that can and will happen from time to time.
employer.Charles J. Read, CPA has been in the payroll,
Alabama State new hire reporting requirements areaccounting and tax business for 30 years, the last
that every employer must report every new hire,fifteen in private practice.
rehire and recall. The employer must report theMr. Read is the author of How to Start a New
federally required elements of:Business.
Employee's nameTo find professional payroll service at a budget price
Employee's addressgo to a paperless payroll company.
Employee's social security numberFor a full service payroll bureau with CPAs on staff
Employer's namevisit .
Employers addressSee an excerpt of Mr. Reads interviews from William
Employer's Federal Employer Identification NumberShatners Heartbeat of America television show on
(EIN)the web sites linked above.