10.1 Federal & Alabama Labor Laws for HVAC Employers

10.1 Federal & Alabama Labor Laws for HVAC Employers

[!IMPORTANT] What this subject area actually asks: Labor Laws is a discrete scored block on the Alabama HAC blueprint, drawn from the NASCLA Contractors Guide. The questions are about thresholds and triggers - how many hours before overtime, how many employees before a statute applies, which classification is exempt - not about litigation strategy.

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The Fair Labor Standards Act (FLSA)

Minimum Wage

The federal minimum wage is $7.25 per hour. Alabama is one of a small number of states with no state minimum wage law at all, so the federal rate applies directly to Alabama HVAC employers. There is also no Alabama statute requiring meal periods or rest breaks for adult workers; federal law requires that short breaks of 20 minutes or less, when offered, be paid.

Overtime

Overtime is owed at one and one-half times the regular rate for all hours worked over 40 in a workweek. Three traps recur:

1. The workweek is a fixed, recurring 168-hour period. Employers may not average two weeks together - 50 hours one week and 30 the next produces 10 hours of overtime, not zero.
2. There is no federal daily overtime. Twelve hours on Monday triggers nothing by itself.
3. The regular rate is not just the base wage. Nondiscretionary bonuses, shift differentials, and production or commission pay must be folded into the regular rate before the half-time premium is computed.

Worked example: an installer earns $22.00 per hour and works 46 hours, plus a $60 nondiscretionary attendance bonus.

• Straight-time earnings: $(46 \times $22.00) + $60 = $1{,}072$
• Regular rate: $$1{,}072 / 46 = $23.30$
• Overtime premium owed: $6 \text{ hours} \times (0.5 \times $23.30) = $69.90$
• Total due: $$1{,}072 + $69.90 = $1{,}141.90$

Exempt versus Non-Exempt

An employee is exempt from overtime only if all three tests are met:

[!WARNING] The salary floor has not moved. The 2024 Department of Labor rule that would have raised the threshold to $844 and then $1,128 per week was vacated by a federal district court in November 2024, restoring the 2019 levels. A Department of Labor technical amendment issued May 15, 2026 formally removed the vacated language, confirming that $684 per week is the operative figure. Study material written in 2024 that quotes $1,128 is wrong.

Installers and service technicians are almost always non-exempt regardless of how they are paid. Calling a technician "salaried" does not create an exemption; the duties test still has to be satisfied, and hands-on mechanical work does not satisfy it. A working foreman may qualify for the executive exemption only if managing a recognized unit and directing at least two full-time employees is the primary duty.

Child Labor

HVAC work is heavily restricted for minors. Federal Hazardous Occupations Orders bar workers under 18 from operating most power-driven machinery, from roofing work, and from excavation and trenching. Alabama additionally administers its own child labor law under Code of Alabama Title 25, Chapter 8, which requires an Eligibility to Work certificate for minors and limits hours for 14- and 15-year-olds. Practical rule for a mechanical contractor: no one under 18 on a roof, in a trench, or on power equipment.

Recordkeeping

The FLSA requires payroll records to be kept three years and the wage-computation records (time cards, work schedules, wage-rate tables) two years.

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Anti-Discrimination and Leave Statutes: Count Your Employees

A five-truck Alabama HVAC company with 12 employees is therefore not covered by Title VII, the ADA, the ADEA, or the FMLA - but it is covered by the Equal Pay Act, USERRA, the FLSA, and the Alabama workers compensation and E-Verify statutes.

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Prevailing Wages on Federally Funded Work

The Davis-Bacon Act requires payment of locally prevailing wages and fringe benefits on federally funded or assisted construction contracts over $2,000. Related Acts extend it to many federally assisted projects. Where it applies:

• Wage determinations by classification must be posted on the jobsite.
• Certified payrolls are submitted weekly with a signed statement of compliance.
• Apprentices may be paid at reduced rates only if registered in an approved apprenticeship program.

Alabama has no state prevailing wage law, so on purely state or local Alabama work there is no prevailing wage obligation unless the contract imports one.

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Alabama-Specific Employment Rules

• At-will employment. Alabama follows the at-will doctrine: absent a written contract for a definite term, either party may end the relationship at any time for any lawful reason. Employee handbooks should carry an at-will disclaimer to avoid creating an implied contract.
• Right to work. Alabama is a right-to-work state; union membership or the payment of union dues may not be a condition of employment. This was long a statute and became a constitutional provision by amendment ratified in 2016.
• E-Verify is mandatory for every employer. Code of Alabama Section 31-13-15 (the Beason-Hammon Act) requires every business entity and employer in Alabama, regardless of size, to enroll in E-Verify and to verify the employment eligibility of each newly hired employee. There is no small-employer exemption and no phase-in. The federal Form I-9 must still be completed independently - I-9 first, then the E-Verify case, normally within three business days of the start date.
• New-hire reporting. Employers must report each newly hired or rehired employee to the state new-hire directory within seven days of the hire date.
• Posters. Federal FLSA, OSHA, EEOC (if covered), USERRA, and Alabama unemployment compensation and workers compensation notices must be posted where employees can see them.

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Independent Contractor or Employee?

Calling an installer a subcontractor does not make one. The Internal Revenue Service common-law test weighs three categories of evidence:

1. Behavioral control - who decides when, where, and how the work is done; who provides training.
2. Financial control - who supplies tools and vehicles, who can realize a profit or loss, whether the worker offers services to the public.
3. Type of relationship - written contracts, benefits, permanency, and whether the work is a core service of the business.

In Alabama the stakes are compounded: an unlicensed individual working as an independent HVAC contractor is engaging in unlicensed contracting under Title 34, Chapter 31, and the licensed contractor who arranged it may face Board discipline in addition to back taxes, back overtime, and workers compensation exposure.