Tennessee Minimum Wage Laws in 2022


Minimum Wage Rate in Tennessee

Tennessee has not established a state minimum wage rate. Because most employers and employees in Tennessee are subject to the federal Fair Labor Standards Act, the minimum wage for employees set forth in that law would typically apply. Currently, the federal minimum wage is $7.25 (hourly rate).


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Minimum Wages for Tipped Employees in Tennessee

Tennessee does not have minimum wage or overtime laws and, thus, has not established a tipped minimum wage. Because most employers and employees in Tennessee are subject to the federal Fair Labor Standards Act, the standards for tipped wages set forth in that law typically apply.

Tennessee law requires employers, including restaurants, bars, lounges, and private clubs, who include on customers’ bills mandatory service charges, tips, or gratuities that customers likely assume will be distributed to the employees that served them.

Employers must pay this amount on the same day or the employees’ next paycheck, or if the customer pays the amount via credit extended to it by the employer, on the day the employer collects the money from the customers or on the next paycheck after the amount is collected.

This rule does not apply to banquet, convention, or meeting facilities separated from the public-at-large, unless they are on the premises of a private club. It also does not apply to activities at a guest ranch. TN Statute 50-2-107


Tip pooling and sharing

Tennessee does not have minimum wage or overtime laws and, thus, has not established rules regarding tip or gratuity pooling. Because most employers and employees in Tennessee are subject to the federal Fair Labor Standards Act, the standards for tip or gratuity pooling set forth in that law typically apply.


Subminimum wage

Employees with disabilities

Beginning July 1, 2022, Tennessee requires employers subject to the Fair Labor Standards Act (FLSA) to pay employees with disabilities no less than the minimum wage established by the FLSA. TN Senate Bill 2042


Trainees

Tennessee does not have minimum wage laws and, thus, does not address subminimum wage rates employers may pay to trainees. Because most employers and employees in Tennessee are subject to the federal Fair Labor Standards Act, the standards for wage rates for trainees set forth in that law typically apply.


Apprentices

Tennessee does not have minimum wage laws and, thus, does not address subminimum wage rates employers may pay to apprentices. Because most employers and employees in Tennessee are subject to the federal Fair Labor Standards Act, the standards for minimum wage rates for apprentices set forth in that law typically apply.


Learners

Tennessee does not have minimum wage laws and, thus, does not address subminimum wage rates employers may pay to learners. Because most employers and employees in Tennessee are subject to the federal Fair Labor Standards Act, the standards for minimum wage rates for learners set forth in that law typically apply.


Student learners

Tennessee does not have minimum wage laws and, thus, does not address subminimum wage rates employers may pay to student learners. Because most employers and employees in Tennessee are subject to the federal Fair Labor Standards Act, the standards for minimum wage rates for student learners set forth in that law typically apply.


Student workers

Tennessee does not have minimum wage laws and, thus, does not address subminimum wage rates employers may pay to student workers. Because most employers and employees in Tennessee are subject to the federal Fair Labor Standards Act, the standards for minimum wage rates for student workers set forth in that law typically apply.


Tennessee Minimum Wage Laws 2022

Will there be minimum wage increases in Tennessee in 2022?

Tennessee continues to be one of the remaining five states that still follow the federal minimum wage rules. That means they don’t have their own rate yet and their minimum wage will stay the same unless there are changes in federal rates.

That said, there are efforts to implement a state minimum wage. The Tennessee Minimum Wage Act or Senate Bill 1788, authored by Sen. Sara Kyle, seeks to increase the state’s minimum hourly rate from $7.25 to $15.

There are still no updates on when this will be passed and taken into effect.

What are the effects of wage hike in Tennessee?

According to a report by the U.S. Bureau of Labor Statistics, the state of Tennessee has the highest percentage of workers that earn a minimum wage in the country, with 4% of hourly workers earning the set rate ($7.25) or lower.

That means a wage hike will definitely have a profound impact on employees and business and financial operations of their private companies, regardless of their scale and industry.

A higher minimum wage can prevent a poverty wage rate or the lowest wages currently being given.

Higher average wages will also mean an increased buying power for the consumers in Tennessee and, in so doing, business revenue.

However, one cannot deny that it can also potentially lead to a rise in unemployment or full-time employees suddenly becoming temporary employees.

This is definitely not the intention. Instead, what is sought is a livable wage to support an average family size.

Other states use these data to come up with an accurate living wage estimate. This living wage will then determine the minimum wage rate for the upcoming year.

How can business owners adjust to the minimum wage rate increase in Tennessee?

There are different ways that even a small business owner can accommodate the rising minimum wage rates.

  • Stay Updated

The first thing you need to do is stay informed, especially with compliance updates. You can prevent costly legal battles down the line.

Fortunately, there are various online resources that you can easily refer to and access. Subscribing to a newsletter for business owners is best.

  • Plan Your Budget Strategically

It’s always hard to have a drastic minimum wage increase for businesses. Even bigger private companies can struggle to cover the costs, especially when they mostly have full-time hourly workers.

Hence, implementing a proper budget that maximizes the cash inflow and minimizes unnecessary cash outflow is key.

  • Invest in a Better Payroll System

Various technologies are available to prevent payroll issues, regardless of your business’ industry and scale. Implementing such a system will also ensure your compliance with minimum wage law.

In addition, these platforms can give you better data, and thus insight, into how much you spend on wages versus your actual productivity and sales. This information is critical in adapting to changing times and ensuring your company’s success.


Other State’s Minimum Wage Information

AlabamaHawaiiMassachusettsNew MexicoSouth Dakota
AlaskaIdahoMichiganNew YorkTennessee
ArizonaIllinoisMinnesotaNorth CarolinaTexas
ArkansasIndianaMississippiNorth DakotaUtah
CaliforniaIowaMissouriOhioVermont
ColoradoKansasMontanaOklahomaVirginia
ConnecticutKentuckyNebraskaOregonWashington
DelawareLouisianaNevadaPennsylvaniaWest Virginia
District of ColumbiaMaineNew HampshireRhode IslandWisconsin
FloridaMarylandNew JerseySouth CarolinaWyoming
Georgia

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