Compensation, Compensation Administration, Compensation Planning

New Tennessee Law Allows Employers to Pay Employees Once a Month

On May 11, Governor Bill Haslam signed a new law that gives private employers in Tennessee more flexibility in paying wages and other compensation. The law took effect immediately.Tennessee

The new law specifies that private employers must pay wages and other compensation only once per month. Companies that issue paychecks once per month must pay all wages earned and unpaid as of the end of the month no later than the fifth day of the next month. In other words, employers can issue employees a paycheck on the fifth day of each month that reflects wages for the entire previous month.

For private employers that pay wages twice or more each month, the standard remains the same. All wages earned and unpaid as of the end of the month must be paid no later than the 20th day of the next month, and all wages earned and unpaid as of the 16th day of the month must be paid no later than the fifth day of the next month.

If your company is one of the many Tennessee employers that have been content cutting paychecks twice per month, you may continue with business as usual.

 David L. Johnson is an editor of Tennessee Employment Law Letter and attorney with Butler Snow LLP. He can be reached at david.johnson@butlersnow.com.