Everything You Need to Know About Minimum Wage Laws in Tennessee
The minimum wage is at the heart of many people’s lives, dictating what kind of life someone can lead off of the lowest earning jobs. Because of this, knowing the exceptions, county by county differences, and changes to it are vital for making employment decisions. Here’s everything you need to know about Tennessee minimum wage laws.
Tennessee currently has no unique state-wide minimum wage, meaning the federal $7.25 minimum applies. This covers all businesses with at least $500,000 per year in “gross volume of sales or business done.” Past this, Tennessee cities and counties do not have different minimum wages either unlike other states which are often a patchwork of wages reflecting the different costs of living from one place to another.
When Will Tennessee Raise the Minimum Wage?
The last time Tennesseeans saw a minimum wage increase was in 2009 when the federal one was boosted to the current $7.25 level. More recently in March of this year, state legislators discussed a potential bill that would have phased in a $15 minimum wage over 4 years. This was in line with calls from Governor Tom Wolf’s administration but has not led to any legislation yet.
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With this year’s high inflation rates, advocates have redoubled efforts to get the minimum wage back on the docket to address increasing costs of living. Unfortunately, no immediate changes are forthcoming.
Minimum Wage Exemptions
Tennessee has also chosen to defer to federal law when it comes to exemptions to the minimum wage. The list of workers who are not entitled to the federal minimum wage is as follows:
- Farm workers
- Seasonal workers
- Tipped employees
- Minors and young workers
- Full time students
- Vocational students
- Employees with disabilities
- Minimum wage exempt organizations
Some of these are naturally controversial. Tipped workers, for example, can be paid as little as $2.13 if tips bring them up to the $7.25 threshold. Disabled workers have also been at the center of debates over whether the lower rates they receive make them sufficiently attractive to employers to offset their disabilities and whether this is an ethical way to support them.
The exemptions for minors and young workers have some caveats. This exemption would be better characterized as a training exemption in which workers under 20 years of age can be paid $4.25 for the first 90 days during which they are introduced to the skills of their employment. This is also subject to a lot of criticism and is sometimes used as a wage theft tool for people over 20 years old who are lied to by employers.
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Finally, the exempt organization category refers to certain nonprofits and educational institutions, groups whose socially beneficial activities are meant to be subsidized by cheap labor. Students, for example, can be paid $6.16 for their labor. This, along with the other exemptions, is also a matter of controversy but is nevertheless the standard in Tennessee.
And, although not always mentioned by name in law on the matter, informal work like babysitting or tutoring, or work for family endeavors are usually considered exempt from minimum wage laws as well. Regardless, there are not usually enforcement measures for below minimum wage pay when employment contracts are not present as is commonly the case in these informal forms of employment.
Differences Between Cities and Counties Across Tennessee
In many states, smaller jurisdictions like cities and counties have their own unique minimum wages that help create better matches between costs of living and compensation. While Tennessee does not have official minimum wages set by any other jurisdictions, there are differences in the kinds of wages one will find in different places throughout the state.
Bigger cities, for example, often have higher wages to compensate workers for the higher costs of housing or other necessities. So while Nashville or Memphis do not have their own codified minimum wages, market forces alone can create de facto ones (although these are often still below the wage considered “livable”).
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If you or a loved one would like to learn more about Tennessee Minimum Wage Laws, get your free consultation with one of our Employment Attorneys in Tennessee today!