2026 Tennessee Midyear Roundup
The following changes to Tennessee employment law take effect on July 1, 2026.
Updates to Pay Timing Law
The wage payment law, which applies to employers with five or more employees, will extend the time employers have to pay employees who are compensated on a commission or piece-work basis. The new timelines are as follows:
Employees paid monthly must be paid all compensation earned in a month by the last day of the following month (currently, it’s due on the fifth day of the following month).
Terminated employees need to be paid all earned compensation no later than the last day of the following month after the termination date (currently, it’s due on the next regular payday or 21 days after termination, whichever occurs later).
The new timing requirements only apply to wages and compensation earned on or after the law’s effective date.
Noncompetes Banned for Low-Wage Earners
Employers of all sizes will be prohibited from requesting, requiring, or enforcing noncompete agreements against employees who earn less than $70,000 a year. This earnings threshold includes all forms of compensation, such as wages, commissions, and nondiscretionary bonuses. For hourly employees, annual compensation needs to be calculated based on 52 weeks per year at 40 hours per week.
The law applies to agreements that are created or updated on or after July 1, 2026.
If you use noncompete agreements, we recommend consulting with an attorney to ensure they remain enforceable.