Tennessee’s minimum wage, which has remained the same since 2009, can make it a challenge to keep high-performing employees. Without competitive pay or a clear path to grow, even your best team members may feel stuck or undervalued. They may start looking for better pay, especially in neighboring states like Missouri and Virginia.
Understanding TN labor laws and compensation trends can help you create strategies that build up your team and, ultimately, your restaurant.
What is the minimum wage in Tennessee in 2026?
In Tennessee, the minimum wage is $7.25 per hour, which matches the federal rate. And while the state doesn’t have its own minimum wage law, T.C.A. § 50‑2‑114 says employers must pay at least the federal rate to all workers, even if federal rules say they could pay less. As a result, Tennessee businesses can’t use some of the subminimum wage exceptions allowed under federal law.
This includes most kitchen and FOH staff. It doesn’t apply to exempt roles (like certain salaried managers), but most hourly workers fall under it.
There are still a few exceptions. Tipped workers, like servers and bartenders, can be paid $2.13 per hour in direct wages but only if tips bring their total pay up to at least the minimum. If a worker doesn’t make enough in tips during a shift or pay period, the employer must cover the difference. This is part of the federal tip credit rules, which Tennessee follows in full.
Also, youth workers under 20 may be paid $4.25 per hour during their first 90 days, but only if they’re in non-tipped roles and this rate still meets all applicable wage laws.
Tennessee also doesn’t have a separate state law for overtime. So, the federal Fair Labor Standards Act (FLSA) applies. This means non-exempt workers must get paid 1.5 times their regular rate for any hours worked over 40 in a single week.
How does Tennessee’s minimum wage compare to neighboring states?
Tennessee’s minimum wage is the same across most surrounding states. But a few neighbors pay much more. Just across the border in Arkansas, the state minimum wage is $11 per hour.
Further north in Missouri, workers earn $15 per hour minimum, which is over double Tennessee’s rate. In Virginia, the state minimum wage is $12.77 per hour this year. Unlike Tennessee, Virginia pays the same base wage even for tipped workers.
Meanwhile, Kentucky, Georgia, North Carolina, Alabama, and Mississippi also rely on the federal minimum rate.
If your restaurant is in Memphis, Tiptonville, or Kingsport, workers may be tempted by higher pay just a short drive away. That can make hiring or retaining staff tougher.
On the other hand, if you try to match wages to keep talent, labor costs can jump significantly, from $7.25 to $12 or $13. That adds up fast and affects your bottom line.
Are there plans to increase the minimum for workers?
There’s no state law currently moving forward to raise the minimum wage above $7.25 per hour. Attempts to pass wage hikes have failed several times.
For example, in 2022, Senate Bill 2670 proposed raising the wage to $15 per hour. It stalled in the Senate Commerce and Labor Committee and died before reaching a vote.
From 2023 to 2024, SB 940 proposed a $12 per hour wage. But it died in committee, never advancing from the Banking & Consumer Affairs committee.
More recently, in 2025, lawmakers introduced HB 1216 and SB 1190, each calling for a $20 per hour wage or the federal rate, whichever is higher. Both bills failed in committee in March 2025, in the Banking & Consumer Affairs and Senate Commerce panels.
At the federal level, there is a national bill under consideration. The Raise the Wage Act of 2025 proposes raising the federal minimum wage to $17 per hour by 2030, while phasing out lower subminimum wages for tipped workers, youth, and people with disabilities
If passed, it could impact an estimated 22 million workers, adding roughly $70 billion in annual wages and boosting the average affected worker by about $3,200 per year. So far, though, this bill hasn’t passed, and its future remains uncertain.
