Guides

Tennessee restaurant pay rules (2026): what to pay tipped and non-tipped staff

Mays TeamJuly 8, 2026
A server's shift open in the Mays shift editor for July 7, 2026: a six-and-a-half-hour afternoon shift with a 30-minute break

Tennessee has no minimum wage law of its own; the state labor department says so and sends minimum wage questions to the US Department of Labor (TDLWD, minimum wage). So a Tennessee restaurant the federal Fair Labor Standards Act (FLSA) covers pays at least $7.25 an hour, or a $2.13 cash wage to tipped staff whose tips make up the rest. A business with $500,000 or more in yearly sales is covered, and a smaller one can be too, through staff whose work regularly involves commerce across state lines (DOL Fact Sheet #14). Where Tennessee does write its own rules, they're about breaks, automatic gratuities and paydays, and it stops cities from adding any.

This page puts Tennessee's figures in one place. It covers what you owe tipped staff like servers and bartenders, what you owe everyone else, and two example weeks with the math shown. Every figure links to the official page it comes from.

Updated September 24, 2026: these figures are still current. The minimum wage for Tennessee employers the federal law covers is the federal $7.25 an hour ($2.13 cash wage for tipped employees).

This is general information, not legal advice. Whether a rule applies can depend on your business's size and your own facts; the note at the end says more.

Tennessee pay rules at a glance

As of July 8, 2026:

Rule

Tennessee

Minimum wage

$7.25 an hour, since July 24, 2009 (the federal rate; Tennessee sets no higher one)

Tipped employees: minimum cash wage

$2.13 an hour, if you take the tip credit

Maximum tip credit

$5.12 an hour

Who counts as tipped

Customarily and regularly receives more than $30 a month in tips

Overtime

1.5× the regular rate after 40 hours in a workweek; no daily overtime

Meal and rest breaks for adults

Tennessee has break rules; see Breaks below

Sources: US DOL, minimum wage; US DOL, tipped wages by state; US DOL, overtime.

Who counts as a tipped employee in Tennessee

Tennessee has no threshold of its own, so the federal one applies: a tipped employee is someone who customarily and regularly receives more than $30 a month in tips (US DOL, tipped wages by state).

In a restaurant that usually means servers, bartenders, bussers and counter staff who serve customers, including baristas who get tips. Cooks and dishwashers usually aren't tipped employees. Only tips the employee actually receives count. If someone works two jobs, say a server who also works prep shifts, the tip credit applies only to the hours in the tipped job (DOL Fact Sheet #15).

What you must pay tipped staff in Tennessee

Servers, bartenders, bussers and baristas who get tips can be paid a lower cash wage, with part of their tips counted toward the minimum wage. That's the tip credit, and it comes with conditions:

  • Pay at least $2.13 an hour in cash wages. That's the $7.25 minimum wage minus the most you can credit from tips, $5.12 (US DOL, tipped wages by state).
  • Cash wages plus tips must reach $7.25 for every hour worked, week by week. If tips fall short in a workweek, you pay the difference by the regular payday for that week (DOL Fact Sheet #15).
  • Tell them first. Before you take the tip credit, tell each tipped employee, in writing or out loud: the cash wage you pay, the tip credit you claim, that the credit can't be more than the tips they actually get, that they keep all their tips except through a valid tip pool, and that the credit doesn't apply unless you've told them all this (DOL Fact Sheet #15).
  • Overtime is figured on the full minimum wage. An overtime hour is worth 1.5 × $7.25 = $10.875. After the $5.12 tip credit, you pay at least $5.755 of it in cash wages (DOL Fact Sheet #15).

You don't have to take the tip credit. If you pay tipped staff the full $7.25 an hour, their tips are all on top, there's nothing to make up at the end of the week, and you can put kitchen staff in the tip pool (see below).

What you must pay non-tipped staff in Tennessee

Cooks, dishwashers, prep cooks, and cashiers or counter staff who don't get tips are paid like any other hourly employee:

  • At least $7.25 an hour for every hour worked (US DOL, minimum wage). No tip credit applies.
  • The same goes for a tipped employee's hours in a non-tipped job, like a server's prep shift (DOL Fact Sheet #15).
  • Overtime is at least 1.5 times their regular rate for hours over 40 in a workweek. At $7.25 an hour, that's $10.875 (US DOL, overtime).

Worked examples (made-up numbers)

The names, hours and tips below are made up. The rates are the federal ones that apply in Tennessee as of July 8, 2026.

A server's week: when you have to top up

Sam is a server paid the $2.13 cash wage. He works 27 hours in each of two weeks: a busy one with $400.00 in tips and a slow one with $90.00.


Busy week

Slow week

Hours worked

27

27

Cash wages (27 × $2.13)

$57.51

$57.51

Tips received

$400.00

$90.00

Cash wages + tips

$457.51

$147.51

Minimum for the week (27 × $7.25)

$195.75

$195.75

You pay on top

$0.00

$48.24

In the slow week, $90.00 in tips covers only part of the $138.24 tip credit (27 × $5.12), so you pay the difference by the regular payday: $195.75 − $147.51 = $48.24. In the busy week you owe nothing extra, and every dollar of tips is still Sam's.

A cook's week with overtime

Ana is a line cook paid the federal minimum wage, $7.25 an hour. Over five days she works 9, 9, 10, 8 and 9 hours: 45 hours in all.


Hours

Rate

Pay

Regular hours

40

$7.25

$290.00

Overtime hours (over 40)

5

$10.875 (1.5 × $7.25)

$54.38

Total

45


$344.38

Overtime is counted by the workweek, and hours can't be averaged across two weeks: a long week earns overtime even if the next one is short (US DOL, overtime). Bonuses can change the rate too; see Time clock, breaks and overtime: first-month payroll mistakes to avoid.

Tip pooling rules in Tennessee

Tennessee has its own rule on automatic gratuities (Tenn. Code Ann. § 50-2-107 (as quoted in Hardy, 2015)): Automatic charges on the bill that customers would assume are meant for the staff who served them go to those employees; Tennessee has no rule of its own on tip pools or card fees.

Federal rules apply too, and where the two differ, follow the stricter one (US DOL, tips):

  • The business, its managers and supervisors never keep employees' tips. A manager can't take anything from a pool; they may keep only tips for service they directly and solely provide. An owner with a real stake who helps run the business counts as a manager too.
  • With a tip credit, a pool you require can include only staff who customarily and regularly receive tips: servers, bartenders, bussers, counter staff who serve customers.
  • Without a tip credit, when everyone in the pool gets at least the full minimum wage, you can include cooks and dishwashers.
  • Card fees: you may reduce a card tip by the percentage the card company actually charges you, and no more (DOL Fact Sheet #15).
  • Service charges: under federal law, a mandatory service charge isn't a tip: money you share from one is wages, and it counts in the regular rate for overtime (DOL Fact Sheet #15). Tennessee adds its own rule: When a business, a restaurant included, puts an automatic percentage or dollar amount on the bill, called a service charge, tip, gratuity or anything else, that customers would assume is meant for the staff who served them, that money goes to those employees. It's paid at the close of business that day or on the regular payday (for a bill on credit, once it's collected), and it can't be docked to penalize an employee. Banquet, convention and meeting facilities set apart from the public are exempt, unless they're on a private club's premises, and a violation is a crime (a Class C misdemeanor) (Tenn. Code Ann. § 50-2-107 (as quoted in Hardy, 2015)).
  • Pay pooled tips out by the regular payday for the week or pay period (DOL Fact Sheet #15).

Tennessee's Supreme Court has held that an employee can't sue under the automatic-gratuity law; it's enforced as a crime instead (Tenn. Supreme Court, Hardy (2017)).

How to split a pool fairly, with a worked example: Tip pooling for new restaurant owners.

Overtime in Tennessee

Tennessee has no overtime law of its own (TDLWD, overtime), so the federal rule applies: non-exempt employees get at least 1.5 times their regular rate for hours over 40 in a workweek (US DOL, overtime).

A workweek is any fixed, recurring stretch of seven days that you choose, and hours can't be averaged across two weeks. There's no daily overtime, no double time and no seventh-day premium under Tennessee or federal law, and weekend or holiday hours don't earn a premium by law.

For tipped staff, overtime is figured on the full minimum wage, not the cash wage (see the tipped section above).

Breaks in Tennessee

  • Meal breaks: A 30-minute unpaid meal or rest break for an employee scheduled to work 6 consecutive hours, not during or before the first hour of work, except in workplaces that by their nature give ample opportunity to take a break; the labor department names the food and beverage industry as an example. An employee who mainly serves food or drinks and reports tips can waive the break in writing if the employer allows it and both agree, under a written waiver policy posted at work. No other breaks are required (TDLWD, wages and breaks).
  • Rest breaks: No specific Tennessee rule found — federal rules apply (TDLWD, wages and breaks). The FLSA does not require breaks. Short breaks an employer offers (about 5 to 20 minutes) are paid work time (US DOL, breaks).
  • Minors: A minor (under 18) scheduled to work 6 consecutive hours gets a 30-minute unpaid break or meal period, not during or before the first hour of the work day. Neither the ample-opportunity exception nor the tipped employee's waiver applies to minors (TDLWD, child labor).

Other Tennessee rules that affect pay

  • Paid sick leave: No specific Tennessee rule found — federal rules apply (TDLWD, wages and breaks). No federal paid sick leave requirement. The FMLA provides unpaid, job-protected leave (up to 12 weeks) where it applies (US DOL, sick leave).

Paydays and final pay

  • At least once a month. Wages are due at least monthly. If you pay twice a month or more often, wages earned before the first of a month are due by the twentieth of the next month, and wages earned before the sixteenth by the fifth of the next month; an employer with 5 or more employees keeps regular paydays (TDLWD, wages and breaks) and posts them in at least two conspicuous places (TDLWD wage poster).
  • Final pay. Someone who is dismissed or quits is paid on the next regular payday or within 21 days, whichever is later (TDLWD, wages and breaks).

Local rates in Tennessee

Tennessee law bars cities and counties from requiring private employers to pay a minimum wage other than the state or federal one, or to provide employment benefits, such as paid sick leave, that state or federal law doesn't require (Tenn. Pub. Ch. 309 (2023)). A 2026 law went further: the state now occupies the whole field of employment terms, so a city or county can't require any term or condition of employment beyond state or federal law (Tenn. Pub. Ch. 552 (2026)). So the federal $7.25 minimum wage applies everywhere in Tennessee, and there's no local rate table for Tennessee.

How Mays helps

Mays runs the schedule, time clock, tip pool and payroll export for each location. For Tennessee pay rules, that means:

  • Positions and wages. Give each position a default hourly wage, for example the tipped cash wage for servers and at least the minimum wage for cooks. Mays doesn't check wages against the minimum wage, so update them yourself when the rate changes.
  • A tip pool per location. Split pooled tips by hours worked, equally or by FTAR score, per pay period or day by day, and choose which positions receive. Until you choose, everyone who worked gets a share, cooks included, so if you take a tip credit, pick only tipped positions, and make sure every punch carries a position: once positions are picked, a punch without one gets no share. When you set it up, turn on Leave managers and admins out of the pool: it's off by default. The tips come from your connected POS at that location (Square) or from tips synced with 7shifts time punches, and each person's share appears in the Tip Payouts report and the payroll export.
  • The tip-credit make-up is yours to check. Mays doesn't compare a tipped employee's cash wages plus tips with the minimum wage, so check each workweek the way the server example above does.
  • Time clock and timesheets. Staff clock in on their phone, a shared kiosk or an NFC tag. Timesheets run by pay period, and overtime is counted by the workweek, with an optional daily threshold for states that have one.
  • Payroll export. A standard CSV or a Gusto-format CSV with regular and overtime hours and pooled tips for each employee.
  • Minors. Mays doesn't track minors' hours or breaks, so build a minor's meal break into their shifts when you schedule them.
  • Schedule the break. In the shift editor, give a shift of six hours or more a 30-minute Break; the schedule's hours and labor cost leave it out. To have staff clock it, add it as a custom break under the location's Labor & compliance card. Mays doesn't record a server's written waiver or check that the break isn't in the first hour, so keep the waiver forms and review punches yourself.
  • Twice-monthly pay periods. Under Scheduling → Settings → Pay periods, choose the twice-a-month frequency, whose periods start on the first and the sixteenth, so each period lines up with one of Tennessee's payday deadlines.

Sources

Every figure on this page comes from these official pages, as they read on the date shown.

This page is general information, not legal advice. Laws change, and coverage rules (your business's size, whether federal law covers you) decide which of them apply. Check the pages above, and ask an employment lawyer or accountant about your situation.

Run Tennessee payroll on the right numbers

Set each position's wage, turn on the tip pool with managers left out, and let the time clock count overtime by the workweek. Then payroll is an export, not an evening.

Start your free trial: 30 days, every module, no card needed. Setting up a tip pool? Read Tip pooling for new restaurant owners.