Payroll Tennessee, Unique Aspects of Tennessee Payroll Law and Practice

Tennessee has no State Income Tax. There forTennessee has no State Wage and Hour Law
there is no State Agency to oversee withholdingprovisions concerning pay stub information.
deposits and reports. There are no State W2's toTennessee requires that employee be paid no less
file, no supplement wage withholding rates and nooften than semimonthly.
State W2's to file.Tennessee requires that the lag time between
Not all states allow salary reductions made underthe end of the pay period and the payment of
Section 125 cafeteria plans or 401(k) to bewages earned in 1st half of month, pay by 5th of
treated in the same manner as the IRS codenext month; wages earned in 2nd half, pay y
allows. In Tennessee cafeteria plans are taxable20th of next month.
for unemployment insurance purposes. 401(k) planTennessee payroll law requires that involuntarily
deferrals are taxable unemployment purposes.terminated employees must be paid their final pay
Tennessee doesn't have income tax.with in 21 working days or next regular payday
The Tennessee State Unemployment Insuranceand that voluntarily terminated employees must
Agency is:be paid their final pay within 21 days or by the
Department of Labor and Workforcenext regular payday or by mail if employee
Developmentrequests it.
500 James Robertson Pkwy., 8th Fl.Deceased employee's wages of $10,000 must be
Nashville, TN 37245-1200paid to designated beneficiary; if none, then
(615) 741-2486surviving spouse; children if deceased was female
The State of Tennessee taxable wage base forand head of household.
unemployment purposes is wages up to $7000.00.Escheat laws in Tennessee require that unclaimed
Tennessee requires Magnetic media reporting ofwages be paid over to the state after one year.
quarterly wage reporting if the employer has atThe employer is further required in Tennessee to
least 250 employees that they are reporting thatkeep a record of the wages abandoned and
quarter.turned over to the state for a period of 10 years.
Unemployment records must be retained inThere is no provision in Tennessee law concerning
Tennessee for a minimum period of seven years.tip credits against State minimum wage.
This information generally includes: name; socialIn Tennessee the payroll laws covering
security number; dates of hire, rehire andmandatory rest or meal breaks are only that all
termination; wages by period; payroll pay periodsemployees must have a 30-minute meal period or
and pay dates; date and circumstances ofrest during shift of 6 hours (not during first hour
termination.of shift).
The Tennessee State Agency charged withThere is no provision in Tennessee law concerning
enforcing the state wage and hour laws is:record retention of wage and hour records
Department of Labor and Workforcetherefore it is probably wise to follow FLSA
Developmentguidelines.
Division of Labor StandardsThe Tennessee agency charged with enforcing
710 James Robertson Pkwy.Child Support Orders and laws is:
Nashville, TN 37243Department of Human Services
(615) 741-2858Citizens Plaza Bldg., 12th Fl.
There is no provision for minimum wage in the400 Deadrick St.
State of Tennessee.Nashville, TN 37248-0001
There is also no general provision in Tennessee(800) 838-6911
State Law covering paying overtime in aTennessee has the following provisions for child
non-FLSA covered employer.support deductions:
Tennessee State new hire reporting requirements- When to start Withholding? 14 days after
are that every employer must report every newmailing.
hire and rehire. The employer must report the- When to send Payment? Within 7 days of
federally required elements of:Payday.
- Employee's name- When to send Termination Notice? "Promptly"
- Employee's address- Maximum Administrative Fee? lesser of $5 per
- date of hiremonth or 5% of payment.
- Employee's social security number- Withholding Limits? 50% of gross minus taxes
- Employer's nameand child's health insurance premium.
- Employers addressPlease note that this article is not updated for
- Employer's Federal Employer Identificationchanges that can and will happen from time to
Number (EIN)time.
This information must be reported within 20 daysCharles J. Read, CPA has been in the payroll,
of the hiring or rehiring.accounting and tax business for 30 years,the last
The information can be sent as a W4 orfifteen in private practice. Mr. Read is the author
equivalent by mail, fax or mag media.of "Tax and Accounting Issuesin Forming a New
There is a $20.00 penalty for a late report andBusiness."
$400 for conspiracy in Tennessee.To find professional payroll services at a budget
The Tennessee new hire-reporting agency can beprice go to paperless payroll company.
reached at 888-715-2280 or on the web atFor a full service payroll bureau with CPA's on
Tennessee does allow compulsory direct depositstaff visit .
but the employee's choice of financial institutionSee an excerpt of Mr. Read's interviews from
must meet federal Regulation E regarding choiceWilliam Shatner's "Heartbeat of America"television
of financial institutions.show on the web sites linked above.