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Tennessee Employer HR Compliance Guide
Tennessee is a relatively employer-friendly state with a moderate compliance burden compared to many others. It has no state income tax on wages, no pay transparency law, and no state paid family and medical leave program. Notable upcoming changes include new NICU leave and family medical leave requirements taking effect June 1, 2026, requiring employers to begin preparing now.
Key Facts — Tennessee
- Minimum Wage
- Tennessee has no state minimum wage law and defaults to the federal minimum wage of $7.25 per hour. There are no scheduled state increases and no significant local minimum wage variations, as Tennessee law preempts local wage ordinances.
- Pay Transparency
- No state pay transparency law. Tennessee does not require employers to disclose salary ranges in job postings or to employees. However, employers must inform employees of their wage rate before work begins and may not misrepresent wages, and broader anti-discrimination pay protections apply under the Tennessee Human Rights Act.
- Paid Family & Medical Leave
- No state PFML program. Tennessee has no state-administered paid family or medical leave insurance program. Employers must comply only with federal FMLA and any voluntary benefits they choose to offer.
Priority Compliance Actions
- 1Audit leave policies now and update them to comply with Tennessee's new NICU leave and family medical leave requirements before the June 1, 2026 effective date.
- 2Verify E-Verify enrollment if your company has 35 or more employees, as the Tennessee Lawful Employment Act mandates its use for all new hires.
- 3Ensure new hire reporting is submitted to the Tennessee Department of Labor and Workforce Development within 20 days of each hire, or twice monthly if submitting electronically.
- 4Post required workplace notices — including regular payday schedules and applicable federal posters — in at least two conspicuous employee-facing locations.
- 5Review drug testing policies to ensure employees are properly notified that testing is a condition of workers' compensation eligibility, in compliance with Tennessee law.
Leave Laws
Federal FMLA applies to Tennessee employers with 50 or more employees, providing up to 12 weeks of unpaid, job-protected leave. Tennessee has no statewide paid or unpaid sick leave mandate. Effective June 1, 2026, employers with 16–50 employees must provide up to 10 days of unpaid NICU leave, while employers with more than 50 employees must provide up to 20 days. A new state family medical leave law is also expected to take effect in 2026, requiring employers to review and update leave policies ahead of that date.
Wage & Hour
Tennessee follows federal FLSA overtime rules, requiring time-and-a-half for hours worked over 40 in a workweek; there is no state overtime law providing greater protections. Employers must post notices in at least two conspicuous places setting forth the regular payday. Final paycheck timing is governed by the employer's next regular payday. Tennessee permits the federal tip credit, allowing a lower cash wage for tipped employees provided tips bring total compensation to at least the minimum wage.
Worker Classification
Tennessee is an at-will employment state, allowing termination by either party for any lawful reason. For independent contractor classification, Tennessee generally applies the federal economic reality test for wage and hour purposes and the common-law control test for other purposes; there is no ABC test. Non-compete agreements are enforceable in Tennessee if they are reasonable in scope, duration, and geographic area, and protect a legitimate business interest.
Hiring & Onboarding
Tennessee has no statewide ban-the-box law and no salary history ban, so private employers may inquire about criminal history and prior compensation on applications. Employers with 35 or more employees must use E-Verify to confirm work authorization for all new hires. New hires must be reported to the Tennessee Department of Labor and Workforce Development within 20 days of hire. Employees must be notified that drug or alcohol use is a condition of ineligibility for workers' compensation benefits, and employees who refuse drug testing forfeit those benefits.
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