Tennessee HR Compliance
for Small Businesses

The minimum wage in Tennessee is $7.25 (federal). Tipped employees may be paid $2.13 (federal) with a valid tip credit. Always verify the current rate at the start of each calendar year — many state rates are indexed to CPI and adjust annually.

In Tennessee: involuntary terminations — Later of next regular payday or 21 calendar days from date of discharge. Accrued vacation paid if company policy requires.. Voluntary resignations — . Accrued PTO is not required to be paid out on termination unless your written policy promises it. Never hold a final paycheck over unreturned equipment or unsigned paperwork — that exposes you to wage claims regardless of the circumstances.

Tennessee does not have a statewide paid sick leave law as of 2026. Federal FMLA provides up to 12 weeks of unpaid, job-protected leave for qualifying employees at employers with 50 or more workers. Offering paid sick leave voluntarily improves retention and reduces unplanned absenteeism.

Tennessee does not have a state-mandated paid family leave program. Federal FMLA provides up to 12 weeks of unpaid, job-protected leave for employers with 50 or more employees. Employers can offer private paid leave or short-term disability insurance.

Tennessee does not currently have a statewide law requiring salary ranges in job postings. Pay equity best practice is to establish documented pay bands and apply them consistently, regardless of what the law requires.

HB 1034 (signed May 7, 2026, eff. July 1, 2026): PROHIBITED for employees earning under $70,000/year. Rebuttable presumption durations: 2 years for employees, 3 years for distributors/franchisees. Courts may still modify overbroad covenants. Non-solicitation, NDA, confidentiality not affected. Tennessee courts evaluate noncompetes for legitimate business interest and reasonableness of scope, geography, and duration.

Tennessee uses the following test to determine worker classification: Marketplace Contractors law (Tenn. Code Ann. 50-8-101): marketplace contractors of platforms not employees if written agreement exists.. Misclassification exposes employers to back taxes, penalties, and liability for benefits and wage-hour violations. When in doubt, consult counsel before engaging contractors for ongoing work.

Meal breaks: 30-min unpaid meal break for 6+ consecutive hours. Cannot be scheduled during or before first hour. (Tenn. Code Ann. 50-2-103(h)). Rest breaks: None beyond meal break. Missing a required break can trigger a premium pay penalty — make sure managers understand that breaks are mandatory, not optional, and document compliance in timekeeping records.