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- What is the minimum wage in Tennessee?
- The federal rate applies only when the FLSA covers the employment
- How hourly and piece-rate pay are tested
- Tipped employees can have a lower direct cash wage
- A temporary youth rate can apply to some newly hired workers
- Tennessee restricts city and county wage mandates
- Minimum wage is different from overtime and payday rules
- What can happen when the federal minimum is not paid?
- Common questions about Tennessee minimum wage
- Is Tennessee’s minimum wage higher than the federal rate?
- Can a Tennessee city set a $15 minimum wage for private employers?
- Does every employee in Tennessee receive at least $7.25?
- Is the minimum wage the same for part-time workers?
- Does a salary automatically make someone exempt?
- Sources
Key Facts
- Tennessee state level: Tennessee does not have a generally applicable state minimum-wage law.
- Federal level: The federal minimum wage is $7.25 per hour for employees who are covered by the Fair Labor Standards Act and are not exempt.
- Federal level: Federal coverage depends on the employer’s enterprise and the employee’s work, so $7.25 is not an automatic rule for every working relationship in Tennessee.
- Federal level: An employer using the federal tip credit must generally pay at least $2.13 per hour in direct wages and make up any shortfall when direct wages plus tips do not reach $7.25 per hour.
- Federal level: An employee under age 20 may be paid $4.25 per hour during the first 90 consecutive calendar days with an employer, but displacement of other workers to use that rate is prohibited.
- Tennessee state level: Tennessee generally preempts local governments from imposing higher wage mandates on private employers, subject to a limited exception tied to requirements for federal funding.
- Federal level: Federal law provides back-pay remedies and may provide an equal amount as liquidated damages for unpaid minimum wages.
Questions about the Tennessee minimum wage begin with an unusual state-law fact: Tennessee has no generally applicable state minimum-wage rate of its own. For many employees in the state, the operative floor therefore comes from the federal Fair Labor Standards Act, usually called the FLSA.
That does not mean every person performing paid work in Tennessee is automatically entitled to $7.25 under the same rule. The federal law has coverage tests, exemptions, and special provisions for tipped workers and some newly hired workers under age 20. A sound answer requires identifying both the governing level of law and the worker’s status under that law.
What is the minimum wage in Tennessee?
For a covered, nonexempt employee, the federal minimum is $7.25 per hour. Congress placed that amount in 29 U.S.C. Section 206, and it has applied since July 24, 2009.
Tennessee’s Department of Labor and Workforce Development states that there are no state laws regulating minimum wage and refers minimum-wage questions to the U.S. Department of Labor. In practical terms, Tennessee does not add a higher general state rate on top of the federal floor.
This makes Tennessee different from states that have enacted a higher statewide rate or an automatic inflation adjustment. Readers comparing the systems can find the federal baseline and the state-law relationship in this guide to the federal minimum wage.
The federal rate applies only when the FLSA covers the employment
The phrase “Tennessee minimum wage is $7.25” is useful shorthand, but it leaves out the federal coverage inquiry. An employee may be covered because the employer is a covered enterprise or because the employee’s own work is sufficiently connected to interstate commerce.
Enterprise coverage generally includes a business with at least $500,000 in annual sales or business volume that also has the required commerce connection. Hospitals, institutions primarily caring for residents who are sick or aged, schools and preschools, and government agencies can be covered without relying on that dollar threshold.
Individual coverage can apply even when the employer as a whole is not a covered enterprise. Work such as regularly communicating across state lines, handling records of interstate transactions, producing goods sent out of state, or traveling across state lines can establish the necessary connection.
Coverage and exemption are separate questions. A worker may fall within the FLSA’s reach but still occupy a position covered by a statutory exemption. The law lists exemptions for particular kinds of employment, and job titles alone do not resolve whether an exemption applies.
How hourly and piece-rate pay are tested
The minimum wage is measured against hours worked in the workweek, not simply the hourly rate printed in an offer letter. When compensation is based on a salary, commissions, or piece rates, the amount that counts toward minimum wage must still produce at least the required rate for covered hours unless an exemption applies.
Employers covered by the FLSA must keep specified records, including identifying information, hours worked, and wages paid. Accurate time and pay records matter because a minimum-wage comparison cannot be made reliably without knowing both compensable hours and the wages that federal law allows to count.
Some payroll deductions can also affect the calculation. An employer may not shift the cost of items treated as primarily for the employer’s benefit to an employee when doing so cuts the employee’s wages below the required minimum.
Tipped employees can have a lower direct cash wage
Federal law defines a tipped employee as an employee who customarily and regularly receives more than $30 per month in tips. An employer that satisfies the federal tip-credit requirements may count a limited portion of those tips toward the $7.25 obligation.
The employer must pay at least $2.13 per hour in direct wages when claiming the maximum federal tip credit. If the direct wage and the tips actually received do not total at least $7.25 per hour, the employer must supply the difference.
The tip credit is not automatic. Before taking it, the employer must give the employee information required by federal law, and the employee generally must retain the tips except for distribution through a lawful tip pool. Managers and supervisors may not keep employees’ tips, whether or not the employer takes a tip credit.
A simple example shows the shortfall rule. If a covered server receives $2.13 per hour directly and only $4.50 per hour in tips for the relevant period, the combined amount is $6.63. The employer cannot treat that amount as satisfying the $7.25 minimum and must make up the 62-cent difference.
A temporary youth rate can apply to some newly hired workers
Federal law permits a rate of at least $4.25 per hour for an employee who is under age 20 during the first 90 consecutive calendar days after that employee is initially hired by an employer. The special period ends after 90 consecutive calendar days or when the worker turns 20, whichever occurs first.
An employer may not displace another employee to hire someone at the youth rate. Prohibited displacement includes reducing another employee’s hours, wages, or benefits for that purpose.
Other subminimum-wage arrangements are distinct and generally require a federal certificate or satisfaction of separate statutory conditions. The youth rule should not be treated as a general lower rate for every teenage employee.
Tennessee restricts city and county wage mandates
A city or county does not ordinarily create a separate private-sector minimum wage in Tennessee. Tennessee Code Section 50-2-112 preempts additional local wage or employment-benefit mandates imposed on private employers unless state or federal law requires them.
The statute also says a local government generally may not require a private employer to pay above the otherwise applicable federal or state minimum as a condition of doing business or contracting with that government. A local government remains free to set wages and benefits for its own employees.
There is a narrow funding-related exception. When compliance with the preemption rule for a specific contract, project, or program would cause the loss of otherwise available federal funds, the local government may require the wage needed to satisfy the federal funding condition for that particular matter.
This preemption rule explains why a worker in Nashville, Memphis, Knoxville, or Chattanooga generally does not receive a different local minimum merely because of the city. It does not erase a higher wage created by a private agreement, collective bargaining agreement, or a separate federal law governing a particular contract.
Minimum wage is different from overtime and payday rules
Minimum wage and overtime answer different questions. The FLSA generally requires covered, nonexempt employees to receive one and one-half times their regular rate for hours over 40 in a workweek, while the minimum-wage rule establishes a floor for covered compensation.
The absence of a Tennessee state minimum-wage rate does not change the federal duties of employers subject to the FLSA. Those employers must still pay covered, nonexempt employees at least $7.25 per hour.
What can happen when the federal minimum is not paid?
The U.S. Department of Labor’s Wage and Hour Division administers and enforces the federal minimum-wage provisions. Federal law authorizes recovery of unpaid minimum wages and generally an additional equal amount as liquidated damages, subject to the defenses and procedures that may apply.
The FLSA also prohibits discharging or discriminating against an employee because the employee filed a complaint, started or caused a proceeding, or testified in one. The available process and deadline can depend on who brings the claim, the nature of the alleged violation, and whether the conduct was willful.
Pay records often determine whether a dispute concerns the stated rate, uncompensated working time, an improper tip credit, or deductions that reduced pay below the floor. Those are legally different theories even when each one produces a paycheck that appears too small.
Common questions about Tennessee minimum wage
Is Tennessee’s minimum wage higher than the federal rate?
No general Tennessee statute sets a higher statewide minimum. Covered, nonexempt workers ordinarily rely on the federal $7.25 rate unless another applicable law or contract requires more.
Can a Tennessee city set a $15 minimum wage for private employers?
Tennessee law generally preempts a city or county from imposing that kind of additional wage mandate on private employers. The statute includes a limited exception when a particular wage is necessary to preserve federal funding for a specific contract, project, or program.
Does every employee in Tennessee receive at least $7.25?
Not necessarily. The FLSA must cover the employment, and an exemption or a valid special wage provision may change the result. Tipped employees subject to a valid tip credit may receive a lower direct cash wage, although direct wages plus credited tips must reach the full federal minimum.
Is the minimum wage the same for part-time workers?
The FLSA does not create a lower general minimum merely because an employee works part time. Coverage, exemption status, and any valid special provision remain the relevant questions.
Does a salary automatically make someone exempt?
No. A salary or job title alone does not establish an FLSA exemption; the particular exemption’s compensation and duties requirements must be satisfied.
Sources
- Tennessee Department of Labor: Should I Be Paid Minimum Wage?
- 29 U.S.C. Section 206: Minimum Wage
- 29 U.S.C. Section 203: FLSA Definitions and Tip Credit
- 29 U.S.C. Section 213: FLSA Exemptions
- 29 U.S.C. Section 216: FLSA Penalties and Remedies
- U.S. Department of Labor Fact Sheet 14: FLSA Coverage
- U.S. Department of Labor Fact Sheet 15: Tipped Employees
- Tennessee Code Section 50-2-112: Local Wage-Mandate Preemption
- Tennessee General Assembly: 2023 Amendment Text for Section 50-2-112
- U.S. Department of Labor: State Minimum Wage Laws
