Hiring employees in Alabama: the 2026 compliance checklist for employers and recruiters

As of October 2026, an employer hiring in Alabama has to open an unemployment compensation account with the Alabama Department of Workforce once it pays wages for work in the state, register with the Department of Revenue for a withholding tax account, carry workers' compensation once it regularly employs five or more people, enroll in E-Verify and run new hires through it, collect Form A-4 from each new hire (the federal W-4 is not a substitute), and report the hire within seven days, far inside the 20-day window most states use. Alabama lets employers ask about salary history but bars holding a refusal to answer against the applicant. It has no private-employer ban-the-box, pay transparency or AI hiring law, and it is a one-party consent state for recording.

This page is the Alabama hub: one table with every item and its official source, then a short section on each. Where we already have a full guide to an item, the section summarizes it and links there.

The Alabama hiring checklist at a glance

What must be in place before the first Alabama hire?

Two state accounts and, for most employers, an insurance policy. The Department of Workforce, which took over the unemployment work of the former Department of Labor, says a non-farm employer becomes liable for state unemployment tax when it has "paid wages of $1,500 or more in any calendar quarter" of the current or preceding year, or has had one or more workers in 20 different weeks. Its employer FAQ says that once wages have been paid for work in Alabama, "you may apply for a new number with eGov," and newly liable employers start at 2.70% on each employee's first $8,000 of wages. The Department of Revenue says an employer "with employees working in the state of Alabama" needs a withholding tax account number, opened through My Alabama Taxes.

Workers' compensation turns on headcount. The Department of Workforce says an employer that "regularly employ[s] fewer than five employees", full-time or part-time and counting corporate officers, is generally not required to carry it, with an exception for businesses building new single-family homes. Domestic, farm and casual employees are outside the requirement. The federal layer (an EIN, Form W-4 and Form I-9 by the third business day) applies on top.

Does a staffing or recruiting agency need an Alabama license?

In practice, no general license, though the Code is untidy. Ala. Code § 34-10-1, from 1965, still says no one may run a private employment agency without a license from the Commissioner of Revenue, yet the Department of Revenue's license quick reference lists employment agencies as needing none and offers no way to apply. What is live is the professional employer organization regime: PEOs register with the Department of Workforce, and temporary help firms must certify each year, at no cost, that they are not providing PEO services, using the affidavit on the department's PEO page. Our guide to the Alabama staffing agency license question covers the gap and the filings.

What must an Alabama job posting include, and can you ask about pay history?

We found no Alabama statute requiring a pay range in job postings as of October 2026, and Alabama does not appear in our pay transparency laws by state tracker. A posting for a remote role open to candidates in Colorado, New York or Washington can still pick up those states' rules; see pay transparency for remote jobs.

Pay history is a narrower rule than the label "salary history ban" suggests. The Clarke-Figures Equal Pay Act, Ala. Code § 25-1-30, bars refusing to interview, hire, promote or employ an applicant, or retaliating against one, "because the applicant does not provide wage history." Asking is lawful; counting a refusal against the candidate is not. Our page on the Alabama salary history law explains how to document that a refusal played no part.

When can you ask about criminal history or run a credit check?

Alabama has no statewide ban-the-box law for private employers that we found as of October 2026, so the timing of a criminal history question is set by federal law, any local rule where the job sits, and your own policy. When a screening company prepares the report, the federal disclosure, authorization and adverse action steps apply; our FCRA background check guide walks through them, and EEOC guidance on individualized assessment still shapes how a record should be weighed.

We also found no Alabama statute limiting employment credit checks; Alabama is not among the states in our credit check laws guide, so the FCRA rules are the ones to follow.

Can you record or transcribe a job interview in Alabama?

Yes, as a participant. Under Ala. Code § 13A-11-30, to eavesdrop is to record a private communication "without the consent of at least one of the persons engaged" in it, so an interviewer recording their own call is outside the offense. Criminal eavesdropping under § 13A-11-31 is a Class A misdemeanor. Alabama's southern neighbor, Florida, requires every party's consent, which matters for candidates across the line. See Alabama recording consent law for interviews and recording calls across state lines; saying you are recording or transcribing and getting a clear yes works everywhere.

Does Alabama regulate AI in hiring?

Not with a dedicated statute as of October 2026: Alabama does not appear in our state-by-state AI hiring summary, and we found no Alabama law requiring notice, consent or bias audits for AI screening tools. Federal anti-discrimination law still applies, so a tool that screens out a protected group creates the same exposure as a human decision; see Title VII disparate impact and AI hiring. A requisition open to candidates in Illinois, New York City or Colorado can pick up those rules.

Can you drug test applicants in Alabama?

Alabama's drug-testing law for private employers is an incentive, not a restriction. The Department of Workforce says "Employers who establish a drug-free workplace earn a 5% workers' compensation insurance premium discount," provided the program is certified as complying with Code of Alabama §§ 25-5-330 through 25-5-340: a written policy, a substance abuse testing program, an employee assistance provision, employee education and supervisor training. Certification is renewed each year, and the discount runs for up to four years. The program is voluntary. Our drug testing laws guide compares states that restrict testing.

Does Alabama require E-Verify?

Yes, for every employer. Ala. Code § 31-13-15, part of the Beason-Hammon Alabama Taxpayer and Citizen Protection Act, requires every business entity or employer in the state to enroll in E-Verify and verify new hires through it, with no employee-count threshold. A related section adds a proof-of-enrollment condition for state and local contracts, grants and incentives, and violations can lead to business license suspension. Who must enroll, records and staffing agency duties are in E-Verify requirements in Alabama.

Which state withholding form does a new hire complete?

Form A-4, the Employee's Withholding Exemption Certificate (revision 4/2025). The Department of Revenue's Rule 810-3-73-.01 says every employee must furnish one "at the time of employment," that the federal W-4 "will not be accepted as a substitute," and that without a signed A-4 the employer withholds using zero exemptions. Keep it in the personnel file, and send the department a copy within 60 days of the start date when an employee claims eight or more exemptions. Military spouses who qualify use Form A4-MS instead.

Which notices must a new Alabama employee get at hire?

• Workers' compensation notice. The Department of Workforce lists a Workers' Compensation Notice, in English and Spanish, marked "Required", and its employer FAQ says employers must display the Alabama Child Labor Law, workers' compensation and "Your Job Insurance" unemployment posters.
• No state pay notice. We found no Alabama statute requiring a written notice of pay rate or payday at hire as of October 2026; put pay terms in the offer letter anyway.
• Background check consent. If an outside agency runs a check, the FCRA requires the stand-alone disclosure and written authorization before the report is obtained.

How do you report a new hire in Alabama?

Through the Department of Workforce's Alabama New Hire Center. The department says employers must report "within seven days from the date of hire or reemployment," and that late filers "may be fined up to $25 per violation." The report needs the employee's name, address, Social Security number and first day of work, plus the employer's FEIN and Alabama employer account number. Employers with five or more employees must report online, by form or file upload, and may transmit twice a month; smaller employers may also mail or fax copies of W-4s. The New Hire FAQ says recalled workers count, and that Alabama "does not require the reporting of independent contractors."

The Alabama hiring steps in order

1. Before the first hire: get an EIN, open the Department of Revenue withholding account and, once wages are paid, the unemployment compensation account; enroll in E-Verify; bind workers' compensation if you will regularly employ five or more. Temp firms file the annual non-PEO certification.
2. Posting: no Alabama pay range rule, but check the rules of any state where remote applicants live.
3. Screening: you may ask about pay history, but never hold a refusal to answer against the candidate; run background checks under the FCRA.
4. Interview: a participant may record; announce it and get a yes, especially with candidates in Florida or another all-party state.
5. Offer: drug test under your policy, and consider Drug-Free Workplace certification for the premium discount.
6. First day: Form I-9, W-4 and A-4, then an E-Verify case within three business days of the start date.
7. Within seven days of the hire date: report the hire to the Alabama New Hire Center.

Hiring in more than one state? The same checklist is available for Alaska, Arkansas, Connecticut, Delaware, the District of Columbia, Hawaii, Idaho, and Alabama's neighbors Georgia, Tennessee and Florida.