Tennessee HR Compliance Guide for Employers

Tennessee is one of America's most employer-friendly states, and for employers relocating from California, Colorado, or New York, the contrast is significant. This guide sets out what you still owe as a Tennessee employer, from hiring paperwork and E-Verify to breaks, leave, workers' compensation, payroll taxes, and the final paycheck, along with the headcount at which each rule starts.

The state has a strong at-will doctrine, a right-to-work provision now enshrined in its Constitution, no state income tax on wages, no mandatory paid sick leave, no paid family leave, and no pay transparency law. A preemption statute also stops cities from imposing their own benefit or wage mandates.

Tennessee has no minimum wage of its own either, so the federal rate of $7.25 per hour governs. The Tennessee minimum wage page sets out the exceptions that still apply, the tipped and youth rates, and the poster requirement. The obligations that do exist mostly start at a headcount: E-Verify is required at 35 or more full-time equivalents (FTE), and workers' compensation from 5 employees, or from the first one in construction and coal mining.

The Tennessee Human Rights Act (THRA) reaches 8 employees, below Title VII's 15, and since mid-2025 its complaints go to a different agency. As of July 1, 2026 the state also has its first statutory noncompete rules. FirstHR was built so a small business can keep the documents these threshold-based obligations require, and the signatures on them, in one place.

Tennessee Compliance at a Glance

At a glance, Tennessee compliance comes down to a few headcount thresholds and a handful of deadlines. The mistakes below come up again and again, and many of them start with someone quoting an old threshold or misreading a deadline.

Employment Law Basics

At-Will Employment and the Tennessee Public Protection Act

Tennessee is a strict at-will state. Either party may end the employment relationship at any time for any reason, except as limited by statute or public policy.

The primary statutory whistleblower protection is the Tennessee Public Protection Act (TPPA, T.C.A. section 50-1-304), which protects employees who refuse to participate in illegal activity or who report violations. The TPPA sets a high bar: the protected activity must be the sole reason for the termination, not merely a contributing factor.

The 2014 rewrite of that statute is what most Tennessee handbooks still get wrong. Public Chapter 995, effective July 1, 2014, added the sentence now codified as subsection (g): "This section abrogates and supersedes the common law with respect to any claim that could have been brought under this section." A separate common-law retaliatory discharge claim on the same facts, with its friendlier causation standard, is gone for anything accruing on or after that date.

The same act capped damages for these claims, and the 2025 law that dissolved the THRC restated the caps in T.C.A. section 4-21-312. Compensatory damages for future pecuniary losses, emotional distress, and other nonpecuniary losses on a THRA, Tennessee Disability Act, or TPPA claim run $25,000 at 8 to 14 employees, $50,000 at 15 to 100, $100,000 at 101 to 200, $200,000 at 201 to 500, and $300,000 above 500.

The 2025 version adds one tier: a TPPA claim against an employer with fewer than 8 employees is capped at $25,000 too. Back pay is not on the capped list. The restated section also drops two provisions of the 2014 text: the express carve-out for back pay, front pay, and equitable relief, and the rule that the jury is never told the caps.

Right-to-Work: Now in the Tennessee Constitution

Tennessee has been a right-to-work state since 1947 under T.C.A. sections 50-1-201 through 50-1-204. On November 8, 2022, voters approved Amendment 1 to the Tennessee Constitution, moving right-to-work from statute into the constitution itself. Reversing it now takes another constitutional amendment rather than an ordinary bill, which makes it practically permanent. Employers cannot require union membership or payment of union dues as a condition of employment.

Independent Contractor Classification: The 20-Factor Test

Since January 1, 2020, Tennessee has used the IRS 20-factor test from Revenue Ruling 87-41 for classifying workers, enacted through HB 539. It replaced the ABC test the state had used for unemployment insurance purposes and is the more employer-friendly of the two.

No single factor decides the question: the factors are not weighted equally, and some will not apply at all. The Department of Labor and Workforce Development publishes the test it applies.

Misclassification is expensive here in two separate places rather than one. On the unemployment insurance side it produces back premiums plus penalty and interest; on the workers' compensation side it runs through the same penalty ladder as having no coverage at all, which starts at 1.5 times the average yearly premium you should have been paying.

Tennessee's Mini-WARN Act

Tennessee has a Plant Closing and Reduction in Operations Act (T.C.A. section 50-1-601 et seq.) that fills the gap between 50 and 99 full-time employees where the federal WARN Act does not reach. It bites when employment at a workplace is permanently or indefinitely cut by 50 or more in any three-month period through a closing, a modernization, a relocation of more than 50 miles, or a change in management policy.

Read the statute before you rely on the figure everyone quotes. Section 50-1-602 tells the employer to notify affected employees and then telephone the commissioner of labor and workforce development, and it names no number of days at all. The 60-day period widely attributed to Tennessee comes from the federal WARN Act, which starts at 100 employees.

The real trap is the opposite of the one most sources describe: Tennessee does have a plant closing law, and a growing company meets it long before federal WARN applies.

Hiring, E-Verify, and Onboarding

Every new hire in Tennessee needs two federal forms, plus up to four state items that depend on your headcount and industry. Only the new hire report applies to every employer regardless of size; the rest turn on how many people you employ or what kind of work they do.

E-Verify and the Tennessee Lawful Employment Act

The Tennessee Lawful Employment Act (TLEA, T.C.A. sections 50-1-701 through 50-1-715) requires employers to verify that new hires are authorized to work, under rules that depend on company size. Both the headcount line and the accepted method have changed several times: the early phases let employers choose between E-Verify and retained documents, and only the later ones made E-Verify itself mandatory.

Since January 1, 2023, the threshold has been 35 or more full-time equivalent employees under the same FEIN, and the count includes employees working outside Tennessee. At that size, every new hire goes through E-Verify.

Employers below that line may verify through E-Verify or by requesting and keeping copies of qualifying alternative documents: a valid Tennessee driver's license or photo ID, a U.S. passport, a birth certificate, a certificate of citizenship or naturalization, or valid alien registration documentation. The state is blunt that a Social Security card and a completed Form I-9 are not acceptable substitutes.

The Department of Labor and Workforce Development publishes the penalty structure. A first violation runs $500 against the company plus $500 for each employee or non-employee it failed to verify, and a repeat goes as high as $2,500 plus $2,500 per employee. Failing to enroll costs $500, and failing to produce evidence of compliance within 45 days of a final order costs $500 a day.

Background Checks, Ban-the-Box, and Drug Testing

Tennessee ban-the-box (T.C.A. section 8-50-112) applies only to state government employers. The statute defines the employer as the state and its agencies and instrumentalities, and expressly excludes contractors, subcontractors, political subdivisions, the department of education, and the Tennessee Bureau of Investigation. Covered agencies cannot ask about criminal history on the initial application form and must wait until after an initial screening of applications.

Private employers in Tennessee may ask about criminal history at any point in the hiring process. The federal Fair Credit Reporting Act (FCRA) process still applies the moment a third-party background check is involved.

State law also limits what cities can do here: T.C.A. section 7-51-1802 says a city or county may not, as a condition of doing business or contracting with it, prohibit an employer from requesting information on an application or during hiring. A local ban-the-box rule can therefore reach only the local government's own hiring.

Tennessee's Drug-Free Workplace Program (T.C.A. sections 50-9-101 through 50-9-116) is voluntary and pays for itself twice. Certified employers take a 5% premium credit on the workers' compensation policy.

The second benefit is the one that matters after an accident. When an injured worker tests positive, the state presumes drugs or alcohol were the proximate cause of the injury, benefits can be denied, and the employee has to overcome that presumption with clear and convincing evidence. Few small-employer policies buy that much leverage for the cost of writing them.

Certification requires a written policy, and T.C.A. section 50-9-106 sets the minimum tests: job applicants after a conditional offer, reasonable suspicion, routine fitness-for-duty, follow-up, and post-accident. Random testing is allowed on top of those but is not required.

Wages, Overtime, and Pay Rules

Tennessee has no state minimum wage. The $7.25 per hour floor in the Federal FLSA (Fair Labor Standards Act) applies instead. Tennessee is one of five states (along with Alabama, Louisiana, Mississippi, and South Carolina) without a minimum wage law of their own.

T.C.A. section 50-2-114 closes the one gap that matters here: an employer pays no less than the federal minimum wage under 29 U.S.C. 206 even where FLSA section 14(c) would authorize a subminimum wage for workers with disabilities. T.C.A. section 50-2-112 provides full preemption of any local minimum wage ordinances; no Tennessee city or county may set a higher minimum for private employers.

There is no Tennessee overtime law. The federal FLSA rule of time and a half after 40 hours per week is the only one that applies, and there is no daily overtime threshold.

The Tennessee Equal Pay Act (T.C.A. section 50-2-202) prohibits paying employees of different sexes less for comparable work, a somewhat broader standard than the federal Equal Pay Act's "equal work." Permitted variations include seniority, merit, quality or quantity of production, and other reasonable differentials based on factors other than sex. Wages may only be equalized by raising the lower-paid employee's compensation, never by reducing the higher-paid employee's.

Overtime Exemptions and Mandatory Overtime in Tennessee

Because Tennessee writes no overtime rule of its own, the federal salary and duties tests decide who is exempt. Most executive, administrative, and professional employees must be paid at least $684 per week ($35,568 a year) on a salary basis, and highly compensated employees at least $107,432 a year, before any exemption can apply.

Those are the 2019 levels. A federal court vacated the 2024 increase in November 2024, and the Department of Labor removed the vacated text from its regulations on May 15, 2026, republishing the earlier thresholds. Salary alone never creates an exemption; the actual job duties have to match a test.

Requiring extra hours is legal here. Mandatory overtime has no weekly cap for adult employees in Tennessee, no daily trigger, and no advance-notice requirement when a schedule changes. Private employers also cannot swap compensatory time for overtime pay, an option the FLSA reserves for public agencies.

Meal Breaks: Tennessee's One Mandatory Break Requirement

T.C.A. section 50-2-103(h) requires a 30-minute unpaid meal break for any shift of 6 or more consecutive hours, and the break may not be scheduled during or before the first hour of work. The Department of Labor and Workforce Development recognizes one exception on the face of the statute: workplaces whose nature of business gives ample opportunity to rest or take a break anyway, with food and beverage work and security guards as its examples.

The second exception is a real waiver, and employers routinely describe it wrongly. An employee principally serving food or beverages who receives and reports tips may waive the meal break, at the employer's discretion, on a written form the employer supplies.

The waiver form has to say the employee knows about the right and is giving it up knowingly and voluntarily, state how long the waiver runs, and set out how either side rescinds it. It is a standing agreement with an end date, not a per-shift checkbox, and it is not available for minors.

Penalties come in two tracks. A violation of section 50-2-103 is a Class B misdemeanor punishable by a fine of $100 to $500, and separately the department may assess a civil penalty of $500 to $1,000 per violation, with a warning instead of a penalty for a first unintentional one.

Nursing mothers receive protections under T.C.A. section 50-1-305, which reaches every employer with one or more employees, including the state and its subdivisions. The employer allows reasonable unpaid break time, coinciding with existing breaks where that works, and makes reasonable efforts to provide a room or other location near the work area, other than a toilet stall, where the employee can express milk in privacy. The one excuse is a break that would unduly disrupt operations.

Tennessee's statute speaks of an infant child and sets no age cutoff, which makes it broader in that respect than the federal PUMP Act and its one-year window. The PUMP Act, effective in stages in December 2022 and April 2023, extended nursing protections to FLSA-exempt employees and added a private right of action. In practice, most Tennessee employers work under both laws at once.

Rest Breaks: Tennessee Has No 15-Minute Break Rule

Tennessee labor laws do not require 15-minute breaks. The 30-minute meal period is the only break the state mandates, and no statute obliges an employer to schedule a morning or afternoon rest break at any headcount. Plenty of Tennessee employers offer them anyway, and once offered, federal wage rules govern how they are paid.

Rest periods of roughly 20 minutes or less count as hours worked under the FLSA and are paid as working time, per Department of Labor guidance. A 15-minute break therefore stays on the clock for an hourly employee and counts toward the 40 hours that trigger overtime. Docking it is a wage violation, not a policy choice.

Pay Frequency, Pay Stubs, and Final Paycheck

Pay frequency under T.C.A. section 50-2-103(a) starts at once per month for private employment. A monthly employer pays everything earned and unpaid before the first of a month by the fifth of the next month. An employer running two or more pay periods a month pays wages earned before the first by the twentieth of the following month, and wages earned before the sixteenth by the fifth of the succeeding month.

One 2026 amendment carves out commission and piece-work pay. Under Public Chapter 617, which took effect July 1, 2026 for compensation earned on or after that date, a monthly employer owes compensation earned on a piece-work or commission basis by the last day of the succeeding month rather than the fifth.

Private employers with 5 or more employees also have to establish and maintain regular paydays, and post notice of them in at least two conspicuous places where employees pass going to and from work. The wage payment statute allows cash, check, electronic transfer, or a prepaid debit card, and an employer paying by card must also offer electronic transfer. As for pay stubs, the statute itself imposes no requirement to provide one.

Leave and Time Off

Tennessee mandates no paid sick leave, paid family leave, bereavement leave, or domestic violence leave. What a private employer owes instead is federal FMLA where it applies, plus a short list of narrow state rules covering pregnancy, jury duty, voting, military service, and nursing breaks.

Tennessee has two separate laws protecting pregnant workers, and the difference between them decides which one you actually owe. The Pregnant Workers Fairness Act (TPWFA, T.C.A. section 50-10-101 et seq., effective October 1, 2020) defines an employer as a person employing 15 or more employees and requires reasonable accommodations for pregnancy, childbirth, and related medical conditions. An employer cannot force someone onto leave when an accommodation would let them keep working.

The Maternity Leave Act (T.C.A. section 4-21-408) is the older and narrower of the two. It excludes employers with fewer than 100 full-time employees at the job site, allows up to 4 months for adoption, pregnancy, childbirth, and nursing an infant, and leaves it to the employer whether that time is paid or unpaid.

The notice obligation runs the other way on this one. The employee generally owes three months of advance notice of the departure date, the expected length, and the intention to return, waived for a medical emergency or a short-notice adoption. On return they go back to the previous or a similar position with the same status, pay, length of service credit, and seniority.

Jury duty under T.C.A. section 22-4-106 protects the job for every employee, at any employer size. An employer that regularly employs 5 or more people pays the employee's usual compensation for the time actually spent serving and traveling, and may deduct what the court pays the juror.

Employers with fewer than 5 people, and anyone employed on a temporary basis for less than 6 months, are outside the pay duty. Violating the section, or willfully refusing to restore a returning juror, is a Class A misdemeanor.

FMLA in Tennessee: Federal Coverage, No State Equivalent

FMLA in Tennessee is entirely federal. The state has never passed a family and medical leave law of its own, so the FMLA reaches private employers that had 50 or more employees in 20 or more workweeks during the current or preceding calendar year. Public agencies and public school systems are covered at any size.

An employee qualifies after 12 months with the employer, 1,250 hours of service in the 12 months before the leave starts, and assignment to a worksite where the employer has 50 or more employees within 75 miles. That radius test does real work in Tennessee, where a company can pass 50 employees statewide while every individual location stays under the count.

Eligible employees get up to 12 workweeks of unpaid, job-protected leave in a 12-month period, or up to 26 workweeks in a single 12-month period to care for a covered servicemember, according to the Department of Labor. Tennessee's maternity leave statute is separate and begins at 100 employees at one location.

Anti-Discrimination: THRA, CROWN Act, and the New CRED

The Tennessee Human Rights Act (THRA, T.C.A. section 4-21-101 et seq.) defines an employer as a person employing eight or more individuals within the state, below the 15-employee threshold for federal Title VII. It names race, creed, color, religion, sex, age, and national origin; disability sits in the separate Tennessee Disability Act, which since 2014 carries the same 8-employee definition.

Sexual orientation and gender identity are not standalone classes in the THRA text. Federal law fills part of that gap: in Bostock v. Clayton County (2020) the Supreme Court held that Title VII's ban on sex discrimination reaches both, which binds Tennessee employers at 15 or more employees.

Whether the same reading carries into the THRA at 8 employees has not been settled by statute, so an employer in the 8-to-14 range should not treat the question as answered either way.

The CROWN Act (SB 136, Public Chapter 1078) took effect July 1, 2022, not 2024 as widely misreported. It defines an employer as anyone employing one or more employees, the state and its political subdivisions included, so there is no size threshold to hide behind.

A policy that will not let an employee wear braids, locs, twists, or another style that is part of the cultural identification of their ethnic group, or a physical characteristic of it, is deemed discriminatory and void against Tennessee public policy.

Enforcement looks unusual on paper. The act creates no private cause of action and says a violation of it does not become a violation of some other law. An employee files a complaint with the Department of Labor and Workforce Development, and the statute's stated remedy is that the department issues the employer a warning, as the University of Tennessee's County Technical Assistance Service summarizes it.

Two carve-outs survive in the text. The first covers public safety employees where the style would prevent essential job functions. The second covers any policy the employer must adopt to meet common industry safety standards, keep reasonable safety measures, or comply with health and safety law. Pull your dress code and read it against that language.

Workplace Safety: TOSHA and Workers' Compensation

Tennessee operates an approved OSHA state plan through TOSHA (Tennessee Occupational Safety and Health Administration, T.C.A. section 50-3-101 et seq.). Like the other 21 state plans that run the full program, it covers private sector employers plus state and local government workers, whom federal OSHA does not reach. Federal OSHA keeps jurisdiction over maritime employment, Postal Service mail operations, railroads, Tennessee Valley Authority (TVA) facilities, and military bases, according to its Tennessee State Plan page.

TOSHA takes a fatality report within 8 hours of occurrence, and an in-patient hospitalization, amputation, or loss of an eye within 24 hours. It also runs a no-cost consultation service for employers that want help building a safety program, with no citations and no penalties attached to what the consultant finds.

A state plan has to be at least as effective as the federal program, penalties included. The federal maximums for violations assessed after January 15, 2026 are $16,550 for a serious, other-than-serious, or posting violation, $16,550 per day beyond the abatement date for failure to abate, and $165,514 for a willful or repeated violation. These are unchanged from the 2025 amounts, because the 2026 inflation adjustment was skipped.

The second half of workplace safety in Tennessee is workers' compensation. The Tennessee workers compensation page has the detail: the headcount at which coverage becomes mandatory, who is excluded, where to buy the policy, the injury reporting deadlines, and what going without coverage costs.

Workers’ compensation (T.C.A. section 50-6-101 et seq.) is mandatory for employers with 5 or more full or part-time employees in any industry, for coal mining employers from the first employee, and for construction businesses covering everyone including the owners. Tennessee's Bureau of Workers' Compensation publishes the coverage rules on its Who Must Carry Insurance page, and a policy can come from a licensed carrier or through approved self-insurance.

The 2013 Reform Act (Public Chapter 289, effective July 1, 2014) reshaped everything downstream of that coverage. It created a separate Court of Workers' Compensation Claims and a Workers' Compensation Appeals Board, and it set the causation standard: an injury must arise primarily out of and in the course and scope of employment, meaning the employment contributed more than 50% to it.

Benefit maximums reset every July 1 with the state's average weekly wage, so reaching for last year's figure is an easy arithmetic mistake to make in a Tennessee claim file. For injuries on or after July 1, 2026 the state average weekly wage is $1,353.00, which puts the maximum temporary total disability rate at $1,488.30 a week (110%) and the maximum permanent partial rate at $1,353.00 (100%). The year before those ceilings were $1,426.70 and $1,297.00.

The rest of the Bureau's weekly compensation rate table matters on the long-tail claims. The minimum rate is $202.95, the body-as-a-whole cap runs 450 weeks, the maximum total benefit is $608,850, burial expenses reach $10,000, and medical benefits are unlimited for a compensable injury.

When an injury happens, the employer files Form C-20 with its insurer within one working day of learning about it, according to the Bureau's claim reporting guidance. The report goes in even when the employer doubts the injury is work-related.

The insurer or other adjusting entity then sends the First Report of Work Injury to the Bureau. Under Bureau rule 0800-02-14-.04, the report for a death or a disability of more than seven days is due within 14 calendar days of the employer's report, and the report for a disability of seven days or fewer by the 15th of the following month. None of these deadlines waits for the employee to decide whether to pursue a claim.

Construction adds a liability rule that reaches up the contracting chain. The Bureau's certificate of insurance guidance says a worker employed by an uninsured subcontractor who is hurt on the job can go up the ladder and hold the general contractor responsible for compensation. T.C.A. section 50-6-914 makes a general or intermediate contractor liable to that worker to the same extent as the immediate employer.

For contractors that are not construction services providers, the statutory employer rule in T.C.A. section 50-6-113 does the same for a principal or intermediate contractor. Subsection (f) of that section takes construction services providers out of it, which is why construction runs on section 50-6-914 instead. Both rules reach only injuries on premises where the principal or general contractor has undertaken the work or that it otherwise controls.

All construction employers carry coverage regardless of employee count. The Bureau's exemption registry is the narrow route by which a qualifying owner registers out of covering themselves, and the exemption never covers the business's employees.

The penalties for getting any of this wrong are the ones in the table above. The coverage penalties of 1.5 times the avoided premium, and three times it for repeat violations within five years, come from the Bureau's compliance program, and the order and late-payment penalties from its penalty program.

Payroll and Tax Compliance

Tennessee is one of nine states that levy no individual income tax on wages. Employers need no state withholding form; the federal W-4 is the whole file.

The Hall Tax never touched wages either. It fell on interest from bonds and notes and on dividends from stock, and its rate stepped down a point a year from 2017 through 2020 before hitting zero. The Department of Revenue confirms it was repealed for tax periods beginning on or after January 1, 2021.

SUI quarterly filing in Tennessee follows the calendar quarter. The Department of Labor and Workforce Development makes the wage report for each quarter due at the end of the following month, and its premium rule sets the same last-day-of-the-month date for payment, which makes the deadlines April 30, July 31, October 31, and January 31. The premium and wage reports now go through the Employer e-Services portal on Jobs4TN, which replaced the older TNPAWS filing system in May 2025.

The trust fund balance on June 30 and December 31 picks which of six premium rate charts applies, and Chart 6, the most favorable one, has been in effect continuously since July 1, 2015. The taxable wage base has held at $7,000 for both 2025 and 2026, per the department's UI tax rates page.

Employee Privacy and Data Protection

Tennessee data breach notification under T.C.A. section 47-18-2107 runs on a 45-day clock from discovery of the breach, or from the day a law enforcement agency says notice will no longer compromise its investigation. Where the number of affected people exceeds 1,000, the information holder also notifies the nationwide consumer reporting agencies.

Covered personal information is a name plus a Social Security number, driver license number, or financial account number with the access code. Good-faith acquisition by an employee for a proper purpose is not a breach.

The Tennessee Information Protection Act (TIPA, T.C.A. section 47-18-3201 et seq.) took effect July 1, 2025, and most Tennessee employers fall outside it twice over. It reaches large commercial data processors: over $25 million in revenue and personal information of at least 175,000 consumers in a calendar year, or at least 25,000 consumers with over half of gross revenue coming from personal data sales.

TIPA also carries a broad employment carve-out, excluding personal information processed in the context of employment for applicants, employees, agents, and independent contractors.

The enforcement design is what makes TIPA distinctive. The Attorney General enforces it exclusively, with no private right of action, a 60-day cure period that has no sunset clause, and a maximum penalty of $7,500 per violation, trebled to $22,500 for a willful or knowing one. It is also the state privacy law that turns a written program reasonably conforming to the National Institute of Standards and Technology (NIST) Privacy Framework into an affirmative defense.

The Employee Online Privacy Act (T.C.A. sections 50-1-1001 through 50-1-1004) stops an employer requesting or requiring a password to a personal internet account, compelling an employee or applicant to open one in the employer's presence so the employer can watch, or compelling them to add the employer to their contacts. It also bars adverse action or a refusal to hire for saying no to any of those.

The exceptions are narrower than employers assume. The act still allows monitoring employer-supplied devices and accounts used for business, restricting site access on company equipment, viewing publicly available information, and investigating where the employer has specific information on the account about legal compliance or an unauthorized transfer of proprietary data. General curiosity is not an investigation.

Recording conversations falls under a different statute. Tennessee is a one-party consent state under T.C.A. section 39-13-601, so a participant in a conversation may record it without telling anyone else, and unlawful interception by a non-participant is a felony.

Personnel records are the last privacy question, and the state stays out of them. Tennessee gives private-sector employees no statutory right of access to their personnel files, which leaves that question to company policy.

Termination and Separation

The final paycheck rule under T.C.A. section 50-2-103(g) is easy to misapply. The deadline is the next regular payday or 21 calendar days from the date of separation, whichever occurs last, and it reads the same for a resignation as for a discharge. The mistake is reading "whichever occurs last" as "whichever is sooner," which inverts the statute. Piece-work and commission pay earned on or after July 1, 2026 runs on its own clock under Public Chapter 617: it is due by the last day of the month following the separation.

Accrued time off follows the employer's own paper. Vacation payout is owed only where a written policy or labor agreement specifically promises it, and the state confirms that Tennessee law does not otherwise fold unused fringe benefits into final wages. Withholding the check as leverage for unreturned property requires written authorization the employee signed first.

Tennessee noncompete agreements now have a statute for the first time. HB 1034, Public Chapter 934, signed in 2026 and effective July 1, 2026, adds T.C.A. section 50-1-211 to state law. Under it, an employer shall not require, request, or enforce a noncompete against an employee whose annualized compensation is less than $70,000, and any such agreement is void and unenforceable as a matter of public policy.

Annualized compensation counts wages, salary, commissions, nondiscretionary bonuses, and other remuneration, and for an hourly worker it is the hourly rate times 40 times 52.

The same act writes duration presumptions into T.C.A. section 50-1-210. A restraint of 2 years or less against a former employee or independent contractor is presumed reasonable in time; 3 years or less against a distributor, dealer, franchisee, lessee, or trademark licensee; and the longer of 5 years or the payment period against the seller of a business or a material equity stake.

A restraint longer than the applicable figure is presumed unreasonable. The act applies to proceedings occurring and agreements entered into, renewed, or amended on or after July 1, 2026.

Three things did not change. Confidentiality and nondisclosure agreements, customer nonsolicitation agreements, and employee nonsolicitation agreements are expressly left alone. Courts keep the power to modify a covenant to make it reasonable rather than strike it whole. And the older common-law reasonableness analysis, which asks for adequate consideration, a real threatened danger to protect, no unreasonable hardship on the employee, and no harm to the public, still runs underneath the new presumptions.

Two footnotes belong on any Tennessee noncompete file. Physician noncompetes carry their own restrictions under T.C.A. section 63-1-148. The federal FTC noncompete rule never took effect: a court stopped it in Ryan LLC v. FTC in August 2024, and it was removed from the Code of Federal Regulations in February 2026, so state law is what actually governs the question.

Employee Handbook Requirements

Tennessee does not require employers to maintain a written handbook. However, a handbook is practically essential: it is the natural home for an at-will disclaimer, the lactation break arrangements T.C.A. section 50-1-305 requires, the meal break rule in T.C.A. section 50-2-103(h), and TPWFA accommodation procedures for employers with 15 or more employees.

The at-will disclaimer is particularly important in Tennessee because TPPA requires a showing that the protected activity was the "sole reason" for termination. Handbook language creating just-cause expectations or progressive discipline commitments makes it easier for an employee to argue that the reason you gave for a termination was a pretext. Keep at-will language conspicuous and include a signed acknowledgment.

Special Topics: Child Labor, Preemption, and Polygraph

Child labor rules (T.C.A. section 50-5-101 et seq.) set the minimum working age at 14 with exceptions, and Tennessee requires no formal work permit. The state's published limits for 14 and 15 year-olds split by whether school is in session: 3 hours a day and 18 hours a week during school, between 7 AM and 7 PM, against 8 hours a day and 40 hours a week outside it, between 6 AM and 9 PM.

Sixteen and 17 year-olds carry no daily or weekly hour cap, but they cannot work during required class hours, and they cannot work between 10 PM and 6 AM Sunday through Thursday before a school day. Parental consent buys a shift to midnight on no more than three of those nights a week, and the consent form runs until the end of the school year, the end of the job, or the age of majority.

Break rules follow minors of any age. They get the same 30-minute break after 6 consecutive hours, it may not be scheduled during or before the first hour, and the tipped-employee waiver that adult servers can sign is not available to them.

Tennessee's Dillon Rule, under which cities and counties hold only the powers the state grants them, combined with T.C.A. sections 50-2-112 and 7-51-1802 creates some of the most comprehensive local preemption of employment ordinances in the country. No Tennessee city or county may set a minimum wage, paid sick leave requirement, ban-the-box requirement for private employers, or other employment benefit or wage mandate that goes beyond state law.

Section 7-51-1802 goes further and occupies the entire field of regulating the terms and conditions of employment. The result is uniform compliance statewide, unlike states such as California or Colorado where cities can add layers of requirements. It also means employers cannot rely on any local ordinance to excuse compliance with state law.

The Tennessee polygraph statute (T.C.A. section 62-27-128) prohibits employers from taking any personnel action "solely" on the basis of polygraph test results. The federal Employee Polygraph Protection Act (EPPA) adds a broader rule: it prohibits most private employers from requiring polygraph tests in hiring or during employment. Tennessee also licenses polygraph examiners, with the commissioner of commerce and insurance as the regulator under T.C.A. title 62, chapter 27.

Required Workplace Postings

Tennessee's own required set is short. The Department of Labor and Workforce Development lists four required posters and publishes every one of them in English and Spanish for download, alongside a shorter list it labels recommended but not required.

The Workers' Compensation Posting Notice is the only one you fill in yourself. Per the Bureau's posting notice rules, it names the employer representative to notify of an injury, with a phone number and address, and a separate copy goes up at each location.

Since the THRC dissolution, the department's required list has no state anti-discrimination poster. The Attorney General's Civil Rights Enforcement Division does publish a bilingual employment discrimination poster on its resources page, with CRED's contact details, and it is worth hanging next to the required four.

The federal anti-discrimination notice is the consolidated "Know Your Rights" poster, required of employers covered by the laws the EEOC enforces: 15 or more employees for Title VII, the ADA, and the Genetic Information Nondiscrimination Act (GINA), and 20 or more for the ADEA.

One distinction is worth writing down before a handbook FAQ blurs it. The federal Equal Pay Act applies from the first employee, unlike the Title VII, ADA, GINA, and ADEA headcounts that decide who must post, so keep the two points apart; a single sentence that lumps them together gets one of them wrong. CRED contact details belong in the handbook as well, and the TPWFA has no poster of its own.

Tennessee vs. Federal vs. California

Tennessee's compliance profile is among the most employer-friendly in the South and in the country. The distinctive features are no income tax on wages, no state minimum wage above the federal floor, strong preemption of local employment mandates, and right-to-work written into the constitution.

Tennessee still goes further than federal law in a handful of places. The biggest are the THRA's 8-employee threshold against Title VII's 15, the E-Verify mandate at 35 full-time equivalents, the plant closing law at 50 to 99 employees, the mandatory 30-minute meal break, and, from July 1, 2026, the $70,000 noncompete earnings floor.

Recent Legislative Changes

Four of these changes carry real operational weight. Public Chapter 934 rewrote noncompete practice from July 1, 2026, and any agreement you sign, renew, or amend on or after that date is measured against the new rules.

The THRC dissolution moved new state-law discrimination complaints to CRED as of July 1, 2025. TIPA took effect the same day with employee data broadly exempt. And the E-Verify threshold has been 35 FTE since January 1, 2023, though plenty of Tennessee employers still quote 6 or 50. If your handbook, offer letters, or noncompete forms were written before any of these dates, start your review with them.

Frequently Asked Questions