Alabama — Hiring & Onboarding

Alabama law requires every private employer that conducts business or performs work in Alabama to use the federal E-Verify system for verifying the employment eligibility of all newly hired employees. This requirement has been in effect since April 1, 2012, under Ala. Code § 31-13-15(b). The statute makes clear that completing the federal Form I-9 does not fulfill the state’s verification mandate; E-Verify use is mandatory in addition to the underlying I-9 process required by federal law.

All private employers must enroll in E-Verify and use it for every newly hired employee working in Alabama. The law requires employers to retain records of the E-Verify attestation for each worker (the result when the employer confirms employment eligibility through E-Verify), but does not specify an exact retention period in the statute itself.

For smaller employers, Ala. Code § 31-13-15(d) authorizes the Alabama Department of Homeland Security to serve as an E-Verify Employer Agent for those with 25 or fewer employees, facilitating their participation without requiring direct federal E-Verify registration.

Noncompliance—including failing to enroll in E-Verify or failing to verify new hires—triggers administrative penalties under the statute, including business probation and, in serious or repeated cases, business license suspension or revocation (see the penalties section for detail).

Source: Ala. Code § 31-13-15

Alabama law requires all employers to report each newly hired, recalled, or rehired employee to the Alabama Department of Workforce within seven days of hiring. This obligation applies to every employer operating in Alabama, regardless of size, and covers all employees for whom a W-4 form is completed — including full-time, part-time, and temporary workers.

Statutory deadline and electronic-filing alternative. Code of Alabama § 25-11-5(a) establishes the baseline seven-day reporting window, measured from the employee's date of hire (the first day services for remuneration are performed). Employers who choose to report electronically, however, may transmit reports twice monthly, not less than 12 days nor more than 16 days apart, under the same statute. Effective May 1, 2008, employers with five or more employees must use electronic filing through the Alabama Department of Workforce's online system; smaller employers (fewer than five employees) may file electronically or submit annotated copies of the employee's W-4 form by mail.

Covered employees. A "newly hired individual" includes an employee who (1) has not previously been reported by that employer, or (2) was previously employed by the same employer but has been separated from employment for at least 60 consecutive days. Returning employees who have been separated for 60 or more days trigger the reporting obligation anew.

Required data elements. Each new hire report must include the employee's name, address, Social Security number, and date of hire, plus the employer's name, address, and federal employer identification number (FEIN). The date of hire is the date services for remuneration were first performed, not the offer-acceptance date or the date paperwork was signed.

Enforcement and penalties. Employers who fail to report a newly hired or recalled employee may be assessed a civil penalty of up to $25 per violation under Code of Alabama § 25-11-17. The Department may enforce this penalty for each unreported hire. Late reports (up to 12 months from the start-to-work date) must still be submitted, as the information is needed by the Department of Human Resources and the Federal Parent Locator Service for child-support enforcement and benefit-fraud prevention; reports more than 12 months late are rejected by the system.

Purpose and data use. Alabama established its State Directory of New Hires in 1997 to comply with the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104-193). The Directory cross-matches new hire data with unemployment-compensation, workers'-compensation, and child-support databases to prevent dual-benefit payments and locate non-custodial parents delinquent in support obligations. Within three days of entry, the Department forwards the information to the federal National Directory of New Hires maintained by the Department of Health and Human Services.

Multi-state employers. A multi-state employer may choose to report all new hires to a single state in which it has employees, rather than reporting separately to each state. If the employer designates a state other than Alabama, it must notify the U.S. Secretary of Health and Human Services in writing of the designated state. Alabama law does not require reporting of independent contractors.

Source: Ala. Code § 25-11-5 Source: Alabama New-Hire Reporting (Alabama Department of Labor) Source: Ala. Admin. Code r. 480-1-1-.11

Alabama’s Beason-Hammon Taxpayer and Citizen Protection Act (Ala. Code § 31-13-15) establishes a tiered civil and administrative penalty regime against employers that knowingly employ unauthorized workers or fail to enroll in E-Verify as required. Penalties escalate on repeat violations and are enforced through court proceedings.

First violation:

• The court must order the employer to terminate employment of all unauthorized aliens.
• The employer is placed on statewide probation for three years, with a requirement to submit quarterly compliance reports to the local district attorney.
• All business licenses and permits for the specific business location are suspended for up to 10 business days. This suspension ends one business day after the employer files a sworn affidavit of compliance and provides a copy of the E-Verify Memorandum of Understanding with the court, demonstrating active enrollment in E-Verify.

Second violation at the same location:

• The court must permanently revoke all business licenses and permits for the specific location.

Subsequent violations:

• The court must order permanent, statewide revocation of all business licenses and permits held by the employer.

No monetary fines are set out in Ala. Code § 31-13-15 itself. Enforcement relies on license suspension, probation, and—after repetition—complete loss of the right to operate in the state. These penalties are only imposed following a finding in state court. The triggering violation is "knowingly" employing, hiring, or continuing to employ an unauthorized alien, as established in court.

Source: Ala. Code § 31-13-15

Alabama employers must obtain a signed Form A‑4 (Employee’s Withholding Tax Exemption Certificate) from each new employee on or before the first day of employment. Alabama Code § 40‑18‑73(a) requires that "on or before the date of commencement of employment," the employee must provide the employer with a completed and signed Alabama withholding exemption certificate (the A‑4). This certificate indicates the number of Alabama withholding exemptions the employee is entitled to claim. The employer must retain the A‑4 in their records. The form is available directly from the Alabama Department of Revenue.

Federal Form W‑4 is not valid for Alabama withholding purposes. Section 40‑18‑73(b) is explicit: "Due to the fact that the federal exemptions differ significantly from Alabama law, federal Form W‑4 is not an acceptable filing under this section." Employers must therefore collect the state A‑4 from every hire. If an employee fails to furnish a signed A‑4 before the first payroll period, the employer is required to withhold Alabama income tax using zero exemptions—the highest withholding level (see § 40‑18‑73(c)).

This state‑specific requirement exists in addition to the federal obligation to obtain Form W‑4 (which must still be collected for federal income tax withholding). For Alabama payroll compliance, only the A‑4 is recognized for state withholding certificates.

Source: Ala. Code § 40‑18‑73 Source: Ala. Admin. Code r. 810-3-73-.01