Worker Compensation Requirements in Alabama

Alabama's Basic Coverage Mandate

In Alabama, employers with five or more employees must purchase workers' compensation insurance or obtain a self-insurance certificate. Employers with fewer than five employees are exempt, but can still opt for coverage. The insurance must be issued by an Alabama‑licensed carrier or a federally licensed insurer authorized to operate in the state.

Coverage Limits and Benefits

Alabama limits the amount of benefits an employee can receive to the lesser of the following:

• Weekly wage limit: $2,400 (2024 rate)
• Maximum benefit period: 26 weeks for temporary total disability, 52 weeks for permanent total disability, or 52 weeks for permanent partial disability.

Workers who are permanently disabled receive a lump‑sum payment equal to the total of the weekly benefits they would have received had they worked for the maximum benefit period.

Employer Responsibilities

Employers must:

• Provide workers with the employer's workers' compensation insurance card or proof of coverage.
• Maintain records of all employees and their wages for the last 12 months.
• Report any workplace injury to the Alabama Department of Labor within 72 hours.

Failure to comply can result in penalties, loss of coverage, and liability for medical costs.

Filing a Claim

Injured employees must file a claim within 30 days of the injury. The claim includes a medical report, a statement of injury, and proof of wages. After the claim is accepted, the insurer pays medical expenses, wage replacement, and, if applicable, benefits for permanent disability.

Dispute Resolution and Appeals

Disagreements over coverage or benefit amounts can be appealed to the Alabama Workers' Compensation Commission. The commission reviews evidence, holds hearings, and issues binding decisions. Employees may appeal a commission decision to the Alabama Court of Appeals.

Key Statutory References