Nobody ever said running a business was a walk in the park. As an employer, you have a lot of balls in the air, and compliance is just one of them. One really, really important one that, if dropped, could cost you a whole lot of money.
In addition to federal regulations, each state has their own share of employment laws that business owners need to be aware of. Here, we’re highlighting some of these key state-specific requirements and laws, and offering guidance to help you keep up.
Bear in mind, this list is not comprehensive, and there may be local or industry-specific employment requirements that your business needs to comply with. It’s best to consult with counsel to ensure compliance with all applicable laws, as Justworks does not provide legal advice.
Payroll Tax Accounts
Because Justworks reports state unemployment taxes on behalf of customers who utilize Justworks’ PEO services, Justworks may need to collect account information such as your account number and current rate. You can read more about it here: State Unemployment Insurance.
Recruiting & Hiring Practices
E-Verify
The Tennessee Lawful Employment Law Act requires that private employers with 35 or more full-time equivalent employees under the same FEIN enroll and participate in E-Verify which allows participating employers to electronically verify the employment eligibility of their employees. E-Verify compares information from Form I-9 to government records to confirm that an employee is authorized to work in the U.S.
State Regulation: Tennessee Lawful Employment Law Act
Mineral*: Tennessee Employment Verification and New Hire Reporting
Independent Contractors
When classifying workers as employees or independent contractors, there are a few things to consider, including the different tests that apply under different federal and state employment laws, and potential penalties and other liabilities for misclassifying employees as independent contractors. Certain state laws apply tests that are more stringent than the guidance provided by federal agencies, such as the IRS and Department of Labor, to apply in conjunction with federal laws.
Tennessee utilizes a 20-factor test in making a determination as to the nature of the working relationship. These factors may be of different weight and relevance in supporting the determination of any employment relationship.
You can read our general Help Center article on contractors and view information on how to determine if someone is a contractor or employee in Tennessee in the relevant section at the link below.
Tennessee Department of Labor and Workforce Development: Employee or Independent Contractor
Pay Requirements
Minimum Pay and Overtime Requirements
Tennessee does not have state-specific minimum wage requirements so employers must comply with federal minimum wage and overtime laws.
Federal Department of Labor (DOL): State Minimum Wage Laws
Meal and Rest Breaks
Employees must be given a paid 30-minute break for each 6-hour period of work, which may be unpaid for nonexempt employees.
Tennessee Department of Labor and Workforce Development: Wages & Breaks
Leave
Parental Leave
Employers with 100 or more full-time employees must provide eligible employees with up to four months of leave for adoption, pregnancy, childbirth, and nursing an infant. Eligible employees are those working for the same employer for at least 12 consecutive months as a full-time employee.
Tennessee Human Rights Commission: Maternity Leave
Harassment & Discrimination
Tennessee law prohibits employment discrimination based on membership in any protected class. Employers with 8 or more employees in the state are covered under Tennessee’s anti-discrimination laws with the exception of the Tennessee Pregnant Workers Fairness Act which covers employers with 15 or more employees.
Tennessee Human Rights Commission: Laws and Regulations
Mineral: Tennessee Employment Discrimination and Accommodations*
To provide additional support in this area, Justworks has teamed up with EVERFI to offer customers free access to a suite of harassment prevention and inclusion trainings.
Harassment Prevention and Inclusion Trainings in Justworks
Separation
Tennessee employers should familiarize themselves with specific compliance issues and certain key documents for separating employees.
Final Wages
Any employee who separates voluntarily or involuntarily from employment must be paid all wages earned no later than the next regular pay day or 21 days following the date of separation, whichever is later.
Tennessee employers are not explicitly required to pay out vacation upon separation, but vacation should be paid if dictated by the employer policy. Employers should clearly set forth in writing any policy with respect to unused vacation, as company policy is the determining factor.
Tennessee Department of Labor and Workforce Development: Wages & Breaks
Separation Notice Requirements
Employers must provide a separation notice, Form LB-0489, to all separating employees, regardless of the reason for leaving, within 24 hours of their separation.
Business Closings and Layoffs
Federal and Tennessee law impose certain notice and other obligations on businesses before conducting large-scale business closures, layoffs, or relocations. Under Tennessee law, businesses with as few as 50 employees may be covered. For more information on these laws, visit the links below.
U.S. Department of Labor: Worker Adjustment and Retraining Notification (WARN) Act Advisor
Tennessee Department of Labor and Workforce Development: WARN Notices
Tennessee Department of Labor and Workforce Development: Rapid Response
Notes
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Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.