Master Expanding and Hiring in Tennessee - 2025 Pro Guide

Master Expanding and Hiring in Tennessee - 2024 Pro Guide

Master Expanding and Hiring in Tennessee - 2024 Pro Guide

December 11, 2023

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Key Takeaways

  1. Tennessee ranks around the middle of the US states for unemployment, with plenty of opportunities for employers to attract workers
  2. In Tennessee, there is currently no state minimum wage
  3. In 2016, it became illegal for Tennessee employers to request information about a candidate’s potential criminal history
Summary

 

With a business-friendly environment, a low corporate tax rate of just 6.5%, and a quality of life thanks to the state’s natural beauty and vibrant music culture, hiring in Tennessee brings a wealth of opportunity and benefits.

Expanding your business to Tennessee is exciting, but if you’re looking to hire in the state, navigating the legal landscape is essential to ensure a seamless and compliant transition. Success for your company and your workers relies on hiring the right staff in Tennessee and building a company based on workplace satisfaction and legal compliance.

That’s why we’ve put together this guide on all the basics you need to know to safely hire and manage employees in Tennessee, with details on all the key areas of concern and helpful tips to streamline your operations.

 

 

Tennessee Legal Codes

 

The full list of applicable laws and codes that apply to every section of commercial operations and employment in Tennessee law can be found here via the state government’s website.

In general, the laws that apply to business and employment in Tennessee are a mix of state and United States federal laws, so it’s always best to check which apply in any particular situation.

 

Recruitment & Hiring in Tennessee

 

Tennessee ranks around the middle of the US states for unemployment, with plenty of opportunities for employers to attract workers. Finding talent with high-level qualifications may be more challenging in Tennessee, however, as the rate of education generally falls below the national average. In 2021 it was estimated that only around 30% of the population had a bachelor’s degree.

Tennessee’s recruitment and hiring laws prioritize equal opportunities and fair practices. As a result, when hiring in Tennessee, employers must adhere to anti-discrimination laws, ensuring that hiring decisions are based on qualifications and not influenced by factors such as race, gender, or age.

Background checks are permitted so long as they comply with federal laws. Additionally, drug tests and medical checks can be required but must be conducted in compliance with federal and state regulations. This will typically require a lawful employer to prove a test’s relevancy to the job when hiring in Tennessee. The decision to demand a drug-free workplace is left up to the decision of the employer.

However, in 2016, it became illegal for Tennessee employers to request information about a candidate’s potential criminal history.

Hiring in Tennessee must be done in line with federal laws on eligibility, including the need for Green Cards or working visas for

 

Wage and Hour Laws in Tennessee

 

Compliance with wage and hour laws is vital for creating a fair and sustainable work environment. Payroll in Tennessee must be managed at least once per month.

In Tennessee, there is currently no state minimum wage. However, wages for all workers who meet national Fair Labor Standards Act requirements must comply with the minimum wage of at least $7.25 per hour. Employers cannot make deductions from an employee’s salary without their consent.

Male and female employees must also be paid equal or similar salaries. Employers pay employees differently due to discrimination based on gender becomes liable to criminal investigation.

Workweeks in Tennessee may be arranged throughout the week, and there is no requirement to provide days of rest on any specific day. Every worker must be allowed a minimum of 30 minutes of break after working for 6 hours.

Overtime pay of 1.5X normal salary is required for eligible employees who work more than the standard 40 hours a week. Employers are responsible for keeping accurate records of hours and wages paid to ensure compliance with these regulations.

 

Workplace Health and Safety in Tennessee

 

Tennessee places a strong emphasis on workplace health and safety. Employers are required to adhere to Tennessee Occupational Safety and Health Administration (TOSHA) standards.

Employers in Tennessee must provide a safe working environment, give proper training, and report workplace injuries. Those believed to not be meeting their responsibilities may be investigated by TOSHA officials.

Tennessee employment laws promote fair employment practices. This includes the prohibition of workplace discrimination. Employers must abide by these practices for legal compliance or be held responsible.

 

Employee Leave and Benefits in Tennessee

 

Understanding Tennessee’s regulations on employee leave and benefits is essential for creating competitive and compliant policies.

Employees in Tennessee must be allowed adequate time off for voting or the performance of civic duties and up to 3 days off for bereavement.

Tennessee doesn’t mandate specific requirements for sick leave or vacation leave. In some cases, such as a company having 50+ workers, federal laws such as the Family and Medical Leave Act (FMLA) may apply. In this case, workers may be eligible for up to 12 weeks of unpaid leave for illness or family events such as childbirth.

Workers are not guaranteed paid leave on holidays and may be requested to work on a holiday with any kind of additional pay outside of standard overtime rules.

Similarly, employers are not required by state law to offer health insurance or any similar benefits. However, when hiring in Tennessee, offering PTO or benefits can help to give na employer a competitive edge.

 

Tax and Social Security in Tennessee

 

Individual income tax is collected on a federal level in the US, with Tennessee having no separate state income tax.

The state does levy a 7% state sales tax, however, plus a maximum 2.55% local sales tax.

Employers are required to pay for state unemployment insurance and disability insurance on the first $7,000 of each employee’s yearly salary, up to a maximum of 10%.

 

What You Need to Know about Employee Termination in Tennessee

 

Tennessee, like many US states, practices at-will employment. This means that employers may terminate an employee in Tennessee without need for a reason (though discriminatory termination is not allowed), and an employee may leave a job at any time.

Termination of an employment contract must be accompanied by a Separation Notice.

Employees whose employment is terminated must be paid their full final wages either within 21 days or on the next scheduled payday, whichever is later.

 

Fair Employment Laws and Practices in Tennessee

 

Tennessee promotes fair employment practices, emphasizing diversity and inclusion. Understanding and implementing these practices not only ensures legal compliance but also contributes to a positive workplace culture.

Companies should actively work towards creating an environment free from discrimination, harassment, and bias.

 

Expanding Your Business in Tennessee - Hiring in Tennessee

 

Hiring in Tennessee with INS Global

 

Navigating the intricate web of employment laws in Tennessee and the USA requires expertise and dedication. Whether you’re expanding from another state or another country, hiring in Tennessee is quicker and easier to work with an Employer of Record (EOR) in Tennessee like INS Global.

An Employer of Record helps you cut through regulatory red tape, hire and manage employees compliantly, and start operating without the need for a new company entity in Tennessee. This is because the EOR in Tennessee becomes your workers’ legal employer and takes care of all the required HR functions on your behalf.

INS Global is committed to helping you find success when expanding and hiring in Tennessee. By leveraging our expertise and experience gained from helping hundreds of companies to expand for more than 15 years, you can streamline the hiring process, ensure legal compliance, and focus on what matters most – the growth and success of your business in the Volunteer State.

Talk to our team of expert expansion advisors today and see how you can build a compliant and thriving presence in Tennessee.

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