How to Hire a New Employee in Tennessee (2026)
Reviewed by DocDraft Legal Team · Tennessee · Last updated 2026-05-18
A new Tennessee hire triggers both federal and state-level obligations from day one. In Tennessee, $7.25 per hour (federal FLSA floor; Tennessee has no state minimum wage law). The statutory anchor is wage statute. Tenn. Code section 50-2-114. Tennessee accepts new-hire reports with the report due within 20 days of hire date. This guide details the Tennessee requirements on minimum wage, UI registration, workers' compensation, E-Verify, posters, and at-will employment.
Key Considerations
Before the first paycheck, a Tennessee employer has to know the wage floor that applies. $7.25 per hour (federal FLSA floor; Tennessee has no state minimum wage law). Tipped employees follow federal tip credit ($2.13 cash + $5.12 tip credit = $7.25). That floor sits at No Tennessee state minimum-wage statute. Tenn. Code section 50-2-114 (2022) prohibits local minimum-wage ordinances. Federal FLSA 29 U.S.C. section 206 applies.
Three liability-shaped questions follow every Tennessee hire decision. Workers' comp threshold: 5 E-Verify requirement: private employers with 35 or more full-time equivalent employees under the same FEIN are required to use the federal E-Verify employment verification process. At-will status and its exceptions: Employers may legally terminate an employee at any time for any reason, or for no reason without incurring legal liability. However, an employer may not discriminate against any employee on the basis of the employee's race, sex, age, religion, color, national origin, or disability.
The administrative front end in Tennessee has two doors: new-hire reporting and UI tax registration. The new-hire portal is Within 20 days of hire date The UI registration portal is
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Relevant Documents
In Tennessee the hire-side document stack runs from federal Form I-9 through Form W-4 (federal) and the Tennessee state withholding addendum (where applicable), then the Tennessee new-hire report (Within 20 days of hire date), then workers' compensation enrollment paperwork (5). The state wage statute is No Tennessee state minimum-wage statute. Tenn. Code section 50-2-114 (2022) prohibits local minimum-wage ordinances. Federal FLSA 29 U.S.C. section 206 applies.
Employee Handbook
A comprehensive document outlining company policies, procedures, work rules, benefits, and expectations. Provides important information to new employees and serves as a reference for all staff.
Employment Application Form
A standardized form for collecting information from job applicants including work history, education, skills, and references. This helps employers make informed hiring decisions and serves as documentation of the hiring process.
Employment Contract
A comprehensive legal agreement between employer and employee detailing all terms and conditions of employment including duties, compensation, benefits, termination procedures, and confidentiality requirements.
Employment Offer Letter
A formal document outlining the terms of employment including position, salary, benefits, start date, and other conditions. This establishes clear expectations and serves as evidence of the employment agreement.
Non-Compete Agreement
A contract that restricts an employee from working for competitors or starting a competing business for a specified period after employment ends. Enforceability varies significantly by state.
Non-Disclosure Agreement
Protects your confidential information, trade secrets, and intellectual property that you may need to share with the manufacturer during the course of your relationship. This should be signed before detailed discussions begin.
Relevant Laws
Tennessee Human Rights Act
Prohibits employment discrimination based on race, color, religion, sex, national origin, age, disability, and other protected characteristics. Employers must ensure their hiring practices don't discriminate against protected classes.
Tennessee Employment Security Law
Requires employers to register with the Department of Labor and Workforce Development and pay unemployment insurance taxes. New employers must register within 15 days of hiring their first employee.
Tennessee New Hire Reporting
Employers must report all newly hired employees to the Tennessee New Hire Reporting Program within 20 days of hire. This helps with child support enforcement and reducing fraud in public assistance programs.
Tennessee Workers' Compensation Law
Employers with five or more employees must carry workers' compensation insurance. Construction and coal mining employers must provide coverage regardless of the number of employees.
E-Verify Requirements
Tennessee requires all employers with 50 or more employees to use E-Verify to confirm employment eligibility of new hires. Employers must also maintain copies of documents used to establish identity and work authorization.
Tennessee Lawful Employment Act (TLEA)
Requires all employers to verify the employment eligibility of new hires. Employers can comply by using E-Verify or by maintaining copies of specific identification documents.
Tennessee Wage Regulations
Employers must comply with Tennessee's minimum wage laws (which follow the federal minimum wage of $7.25/hour) and must establish regular pay periods. New employees should receive clear information about their pay rate and schedule.
Tennessee Income Tax Withholding
Tennessee does not have a state income tax on wages, but employers must still withhold federal income taxes. New employees must complete a federal W-4 form for tax withholding purposes.
Regional Variances
Major Metropolitan Areas in Tennessee
Nashville has specific local ordinances that affect employers, including a non-discrimination ordinance that prohibits discrimination based on sexual orientation and gender identity for Metro government employees and contractors. Employers in Nashville should also be aware of local business licensing requirements and potential local tax obligations that differ from other parts of Tennessee.
Memphis employers face unique requirements including a special local business tax and specific wage theft prevention ordinances. Memphis also has its own permitting processes for certain industries and businesses. Additionally, Memphis has implemented certain COVID-19 related workplace safety measures that may still affect some employers.
Knoxville has its own business licensing requirements and local tax considerations. The city also has specific zoning regulations that may affect home-based businesses or certain commercial operations, which could impact hiring decisions for businesses operating in these zones.
Chattanooga has implemented certain local economic development incentives that may affect hiring practices, particularly for businesses in technology and manufacturing sectors. The city also has specific business registration requirements that differ from other Tennessee municipalities.
Special Economic Zones
Due to the presence of federal facilities including Oak Ridge National Laboratory, employers in this area may face additional background check requirements and security clearance considerations when hiring employees who will work on government contracts or in sensitive positions.
Employers in Tennessee counties that border other states should be aware of potential multi-state employment issues if employees live across state lines. This may affect state income tax withholding, unemployment insurance, and workers' compensation coverage requirements.
Industry-Specific Regional Differences
Areas with high tourism activity have specific seasonal employment patterns and may have local ordinances related to temporary workers, work permits for minors (particularly during summer months), and specific alcohol service training requirements for hospitality workers.
Counties with significant agricultural activity may have specific exemptions or requirements related to farm labor, including different minimum wage rules for agricultural workers and seasonal employment considerations that differ from urban areas of Tennessee.
Suggested Compliance Checklist
File the federally-required new-hire report
On hire days after startingThe Tennessee portal is Within 20 days of hire date
Register as an employer with the state UI tax agency
Before first payroll days after startingTennessee's registration portal is
Run the federal Form I-9 process at hire
Before first hire days after startingThe employee completes section 1 on or before day one; the employer completes section 2 within 3 business days. Retain per 8 CFR section 274a.2.
Run withholding setup at hire
On hire days after startingFederal Form W-4 is required for every employee. The Tennessee state withholding addendum (where the state operates a separate income-tax withholding regime) is required in addition.
Check the workers' compensation employer-count threshold for Tennessee
On hire days after starting5
Decide on E-Verify enrollment for Tennessee hires
Before hire days after startingprivate employers with 35 or more full-time equivalent employees under the same FEIN are required to use the federal E-Verify employment verification process.
Reflect the Tennessee at-will rule in the offer letter and handbook acknowledgements
Before first hire days after startingEmployers may legally terminate an employee at any time for any reason, or for no reason without incurring legal liability. However, an employer may not discriminate against any employee on the basis of the employee's race, sex, age, religion, color, national origin, or disability.
Order the mandatory workplace posters
Before hire days after startingThe Tennessee-specific set is: TOSHA Safety and Health Poster; TN Unemployment Insurance Poster; Wage Regulation/Child Labor Poster; Workers' Compensation Posting Notice
| Task | Description | Document | Days after starting |
|---|---|---|---|
| File the federally-required new-hire report | The Tennessee portal is Within 20 days of hire date | - | On hire |
| Register as an employer with the state UI tax agency | Tennessee's registration portal is | - | Before first payroll |
| Run the federal Form I-9 process at hire | The employee completes section 1 on or before day one; the employer completes section 2 within 3 business days. Retain per 8 CFR section 274a.2. | - | Before first hire |
| Run withholding setup at hire | Federal Form W-4 is required for every employee. The Tennessee state withholding addendum (where the state operates a separate income-tax withholding regime) is required in addition. | - | On hire |
| Check the workers' compensation employer-count threshold for Tennessee | 5 | - | On hire |
| Decide on E-Verify enrollment for Tennessee hires | private employers with 35 or more full-time equivalent employees under the same FEIN are required to use the federal E-Verify employment verification process. | - | Before hire |
| Reflect the Tennessee at-will rule in the offer letter and handbook acknowledgements | Employers may legally terminate an employee at any time for any reason, or for no reason without incurring legal liability. However, an employer may not discriminate against any employee on the basis of the employee's race, sex, age, religion, color, national origin, or disability. | employment-offer-letter | Before first hire |
| Order the mandatory workplace posters | The Tennessee-specific set is: TOSHA Safety and Health Poster; TN Unemployment Insurance Poster; Wage Regulation/Child Labor Poster; Workers' Compensation Posting Notice | - | Before hire |
Frequently Asked Questions
Tennessee requires the new-hire report to be filed Within 20 days of hire date. The federal anchor for the report itself is the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996.
In Tennessee, the E-Verify posture for private employers is: private employers with 35 or more full-time equivalent employees under the same FEIN are required to use the federal E-Verify employment verification process. Federal contractors with a FAR E-Verify clause must still use E-Verify regardless of state law.
$7.25 per hour (federal FLSA floor; Tennessee has no state minimum wage law). Tipped employees follow federal tip credit ($2.13 cash + $5.12 tip credit = $7.25). The statutory anchor is No Tennessee state minimum-wage statute. Tenn. Code section 50-2-114 (2022) prohibits local minimum-wage ordinances. Federal FLSA 29 U.S.C. section 206 applies.
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