Intro to Tennessee Labor Laws Heading

With the enactment of House Bill 1034, effective July 1, 2026, Tennessee employers are prohibited from requiring, requesting, or enforcing noncompete agreements with any employee earning less than $70,000 in annualized compensation, which includes wages, salaries, commissions, and nondiscretionary bonuses. For employees earning above this threshold, noncompete durations of two years or less are presumed reasonable. These new rules apply to agreements entered into, renewed, or amended on or after the law’s effective date, and they do not affect an employer's ability to use standard confidentiality or non-solicitation agreements. Employers should review their employment agreement templates and adjust practices to ensure covenants align with these new requirements.

A new Tennessee law expands on a previous law that prohibits employers in the state from taking adverse action against employees who refuse the COVID-19 vaccine. This new legislation further enforces that if proof of vaccination is required as part of an employer’s mandatory vaccination(opens in a new tab) policy, that employer must allow exemptions to their policy if an employee provides documentation for a medical reason from a healthcare provider or a written attestation to a religious belief. With regard to religious exemptions, the law states that an employer cannot require proof beyond an initial statement from the employee.

Tennessee has adopted a new law that reinforces the IRS 20-factor test to determine whether a worker is an independent contractor versus an employee.

Tennessee enacted its CROWN Act on July 1, 2022. The state’s CROWN Act prohibits employers from adopting any policies in the workplace that may discriminate against hairstyles associated with an employee’s race or cultural identification. This includes natural and protective hairstyles such as, and not limited to, braids, locks, twists, and Bantu knots.

Employers in Tennessee with 15 or more employees are required to provide reasonable accommodations to employees with medical needs related to pregnancy, childbirth, or other related medical conditions unless doing so would create an undue hardship on the employer. Covered employers are also prohibited from taking adverse action against employees who make such requests.