Wages and Final Paycheck in Tennessee

This is general information, not legal advice. A Tennessee employment attorney can help with your specific situation.

No State Minimum Wage

Tennessee is one of a small number of states with no minimum wage law of its own. T.C.A. § 50-2-114 expressly provides that the federal minimum wage applies in Tennessee. That means the current federal rate — $7.25 per hour — is the floor for most Tennessee workers.

There are no Tennessee cities or counties that have enacted a higher local minimum wage. For workers in Tennessee, the federal rate is the only floor unless a specific employer chooses to pay more or a collective bargaining agreement sets a higher rate.

Certain employees are exempt from the federal minimum wage under FLSA rules, including some tipped workers (who may receive a lower cash wage if tips bring them to $7.25), outside salespeople, and certain agricultural workers. Those FLSA exemptions also apply in Tennessee.

No State Overtime Law

Tennessee likewise has no state overtime law. Overtime in Tennessee is governed entirely by the federal Fair Labor Standards Act (FLSA), 29 U.S.C. § 207. Under the FLSA, covered non-exempt employees must be paid at least 1.5 times their regular rate of pay for all hours worked over 40 in a single workweek.

The FLSA does not require overtime for hours worked over 8 in a day, for work on weekends, or for work on holidays — only for hours over 40 in the workweek. Some states impose daily overtime requirements, but Tennessee does not.

Whether a specific employee is “exempt” from FLSA overtime — and therefore not entitled to time-and-a-half — depends on their salary level and job duties. Common exemptions include executive, administrative, and professional employees who are paid on a salary basis above a certain threshold. The U.S. Department of Labor enforces FLSA overtime rules.

Final Paycheck Timing: The “Later Of” Rule

When employment ends — whether by resignation, layoff, or termination — T.C.A. § 50-2-103 governs when the employer must deliver the final paycheck. The deadline is the later of:

• (a) the next regular payday after the separation date, or
• (b) 21 days after the date of separation

In practice, this means the rule works as follows: if your next regular payday falls within 21 days of your last day, the employer has until that payday. If the next regular payday is more than 21 days after your last day, the employer still must pay within 21 days.

For example: if you are terminated on a Wednesday and your regular payday is the following Friday (9 days away), the employer must pay by that Friday. If your next regular payday falls 28 days after your termination, the employer must pay within 21 days — not the later payday.

Pay Frequency

Under T.C.A. § 50-2-103, employers with 5 or more employees must pay wages at least once per month. This is the minimum frequency required by state law; employers may choose to pay weekly, biweekly, or semi-monthly as well.

Vacation Pay

Tennessee law does not require employers to provide vacation pay or paid time off. However, if an employer has a policy or practice of paying out accrued vacation upon separation, it may be required to honor that under principles of contract law or the employer’s own written policies. If the employer’s handbook says accrued vacation is paid out on termination, that promise may be enforceable.

Enforcement

Wage complaints in Tennessee can be filed with the Tennessee Department of Labor and Workforce Development (TDLWD) Labor Standards Unit. Under-paid workers may also have federal FLSA claims, which can be filed with the U.S. Department of Labor’s Wage and Hour Division or pursued through private litigation. FLSA claims carry a 2-year statute of limitations (3 years for willful violations), and successful plaintiffs can recover unpaid wages, an equal amount in liquidated damages, and attorney fees.

For more on Tennessee employment law, see the Tennessee Employment Law hub.