Tennessee
Discussion
Tennessee: Local Governments Prohibited from Enacting Employment Ordinances
Effective March 16, 2026, SB 0674 prohibits local governments from enacting employment-related ordinances that exceed or conflict with state or federal law. Specifically, local governments are prohibited from: (1) authorizing or mandating that employers establish a leave policy that deviates from state requirements; (2) requiring that employers provide health insurance benefits to employees, except as required by federal law; (3) prohibiting an employer from requesting any information on an application for employment or during the hiring process, except as provided by state or federal law; or (4) adopting or enforcing policies that regulate or impose requirements upon an employer pertaining to hours worked, scheduling, or employee output. The prohibition does not apply to ordinances affecting a local government’s own employees, meaning local governments retain the ability to set employment terms for their own workforce. For private employers operating in Tennessee, this law provides greater certainty that local ordinances cannot impose employment obligations beyond those established by state or federal law.
Tennessee: Expanded Employment Eligibility Verification Requirements
Effective January 1, 2027, HB 1194 amends the Tennessee Lawful Employment Act to expand the definition of “private employer” to include any person required by federal law to report remuneration paid to at least one employee (i.e., any employer subject to federal payroll tax reporting requirements). This change extends the Act’s employment eligibility verification requirements to employers with one to five employees who were previously exempt. Under the Act, covered private employers must either request and maintain copies of identity and work authorization documents for employees and non-employee contract workers, or enroll in the federal E-Verify program prior to hiring. E-Verify remains mandatory for employers with more than 35 full-time equivalent employees for all employees hired on or after January 1, 2023. The amendment also clarifies penalty provisions, requiring business license suspension for first and second violations until remedied, and permanent business license revocation for a third or subsequent violation. All Tennessee employers, particularly those with fewer than six employees who were previously exempt, should review their onboarding and employment eligibility verification practices for compliance ahead of the January 1, 2027 effective date.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase