Tennessee
Make employment in Tennessee easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Tennessee, all in one easy-to-use platform.
- Capital City
Nashville
- Currency
United States Dollar ($, USD)
- Population size
7,000,000
Facts & Stats
- Capital City
Nashville
- Currency
United States Dollar ($, USD)
- Population size
7,000,000
- VAT - standard rate
7%
From the vibrant musical Americana of Nashville to the dramatic beauty of the Great Smoky Mountains, Tennessee is one of the US’ most iconic regions.
There’s more to The Volunteer State than its musical legacy, though. With two major urban centers and a diverse economy spanning multiple sectors, Tennessee is a highly desirable location for country-lovin’ employees and employers alike.
Grow your team in Tennessee with Remote
If you want to hire in Tennessee, you’ll need to own a legal entity there — or partner with a global employment solutions provider, like Remote.
We can employ top talent in Tennessee on your behalf and manage complex HR tasks such as onboarding, payroll, benefits, and taxes. You can also manage and pay your contractors in Tennessee through Remote.
Risks of misclassification
Tennessee, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Tennessee may lead to fines and penalties for the offending company.
Employing in Tennessee
In Tennessee, workers’ rights are protected by numerous employment and labour laws, at both the state and federal level. As a result, employees enjoy protection from discrimination based on age, religion, sexual orientation, gender, and race.
Here are the key things you need to know about hiring in Tennessee.
Hours of work in Tennessee
Work and overtime laws in Tennessee are governed by the Labour Standards Unit.
What is considered full-time employment in Tennessee?
Under state law, full-time employment is generally deemed to be between 30 and 40 hours per week.
Do pay employees get overtime in Tennessee?
Under the federal Fair Labour Standards Act, non-exempt employees are entitled to overtime pay of 1.5x their regular pay rate if they work more than 40 hours in a week.
Employees are generally (but not always) exempt from overtime if they:
Earn more than the specified state or federal exemption threshold
Perform a role with duties that are considered executive or managerial
Work in a certified or licensed profession, such as law, accounting, architecture, or engineering
In Tennessee, the pay threshold for exemption is currently $684 per week, which is the federal minimum.
Note that the federal pay threshold for exemption is currently being reviewed in the US.
Minimum wage in Tennessee
From July 2024, the minimum wage for private sector employees in Tennessee will be $12 per hour.
Onboarding timeline in Tennessee
We can help you get your new employee started in Tennessee fast, with a minimum onboarding time (MOT) of just 2 working days. Note that the MOT is dependent upon registration with the local authorities, and begins after the employee has submitted all the required information on the Remote platform.
For non-citizens of the US, a work eligibility assessment may be required, and can add three extra days to the onboarding time. If a follow-up is needed, there may be additional delays.
Please note that payroll cut-off dates can impact the actual first day of employment. Remote’s payroll cut-off date is the 10th of the month, unless otherwise specified.
Payroll cycle in Tennessee
Under state law, employees must be paid at least twice per month.
For Remote customers, employee payments are made twice per month in equal instalments, payable in arrears. The first payment is made on the 15th of the month and the second payment is made on the final day of the month. If relevant, bonus payments, commissions, and expense reimbursements are included in the second payment of the cycle.
Effortless HR in Tennessee: Take the Tour
Are employers required to provide health insurance in Tennessee?
Under the federal Affordable Care Act, organisations with a headcount of 50 or more must offer statutory health insurance to their full-time employees.
Many employers also offer some level of supplemental health insurance. While this can lead to a relative rise in employment costs, it’s an essential benefit that ensures your people have access to routine care and are covered in the event of an emergency.
Because Remote is the employer of record (EOR), it’s important for us to offer the same core benefits to all employees to ensure fair and non-discriminatory hiring practices. This protects both your business and ours.
Note that we do not add a markup on any benefits premiums or administration costs.
Are employers required to offer 401k in Tennessee?
No. Organisations are not legally required to offer a 401k retirement plan (or any other type of savings plan) to their employees. However, they may choose to offer this benefit as part of their overall compensation package.
Competitive benefits package in Country
Remote can help you craft a competitive benefits package to attract and retain the best global talent. Our benefits experts understand the trends, requirements, and expectations of the Tennessee labour market, allowing your employees to feel appreciated and thrive.
Our benefits packages in Tennessee usually include some or all of the following:
Pension or 401(K)
Medical Insurance
Vision Insurance
Health Saving Plan (HSA)
Long term disability insurance (LTD)
Dental insurance
Life insurance
Flexible Spending Account (FSA)
Taxes in Tennessee
Employment taxes and statutory fees affect both your payroll and your employees’ paychecks in Tennessee.
Note that your employees may be liable for additional local taxes in certain areas.
Employer taxes
Employment Tax | |
|---|---|
6% | Federal unemployment insurance tax (FUTA) (charged on the first $7,000 an employee earns per year) |
0.01% to 10% | State unemployment insurance tax (SUTA) |
6.2% | FICA (Social security) |
1.45% | FICA (Medicare) |
Employee taxes
Payroll Tax | |
|---|---|
10% to 37% | Federal income tax |
NA | State income tax |
6.2% | FICA (Social security) |
1.45% | FICA (Medicare) |
Types of leave
Holiday | In Tennessee, there is no state or federal law that requires employers to provide paid or unpaid holiday leave to their employees, although many organisations do. |
Sick leave | In Tennessee, there is no state or federal law that requires employers to provide paid sick leave to their employees, although some organisations do. Can an employer deny sick time in Tennessee? Under the federal Family and Medical Leave Act (FMLA), eligible employees are entitled to up to 12 weeks of unpaid sick leave per year, provided they: Work in a location where at least 50 people are employed by the company within a 75-mile radius |
Parental and maternity leave | Under the FMLA, employees are entitled to up to 12 weeks of unpaid maternity or paternity leave. Some organisations opt to pay a reduced pay during this period. Under state law, employees are also entitled to four months’ unpaid parental leave, provided: The employer has at least 100 employees The employee has been at the company for at least 12 months Three months’ notice is provided by the employee |
Bereavement leave | Employers are not legally required to provide bereavement leave to their employees, although most organisations offer unpaid leave. |
Jury duty | Employees must report for jury duty if summoned (unless exempt). Jurors are typically on call for two weeks. Do employers have to pay for jury duty in Tennessee? Yes. Employers must provide full pay to employees for all hours served on jury duty (minus the jury pay provided by the court), provided: The company has five or more employees The employee has been at the company for at least six months Employers also cannot penalise or terminate an employee on jury duty. |
Military leave | Under state and federal law, employers must grant unpaid leave to employees who are members of the military or the National Guard for military duty or training. These employees have the right to take time off for their military obligations, and employers are prohibited from discriminating against them based on their military service. |
Employment termination
Termination process
Like nearly all US states, Tennessee is an at-will state. This means both employers and employees can end the employment relationship without reason, provided it is legal.
Remote’s legal experts can help you navigate terminations to ensure employees are only let go fairly, negating any potential legal complications.
Notice period
Employers and employees are not required to provide notice of termination, unless otherwise stated in the employment contract.
Despite this, it's usually customary for employees to provide two weeks' notice when leaving an organisation.
Severance pay
Employers are not legally required to provide severance pay (unless it is stipulated in the employee's contract or in the company policy).
Employers are also not required to pay any accrued but unused holiday time or sick leave, unless stipulated in the employment agreement.
Probation periods
There is no requirement to provide a probation period for employees, although many companies implement internal probation policies. These policies typically involve a formal performance evaluation after a specified period, such as three or six months.