HR Management & Compliance

New Tennessee law prohibits local mandates on pay, benefits

by Kara Shea

On April 11, Tennessee Governor Bill Haslam signed into law a bill prohibiting local governments from mandating health insurance benefits, leave policies, hourly wage standards, or prevailing wage standards that deviate from existing requirements of state and federal law as a condition of doing business with or within the jurisdiction of the local government.

The new law means that cities and towns in Tennessee may not establish prevailing wages higher than the federal minimum wage and/or state or federal prevailing wages. Any such local laws already on the books (e.g., the living wage ordinances enacted by Memphis and Shelby County a few years ago) are no longer enforceable.

The bill also was amended to include a prohibition against local governments enacting so-called wage theft laws, stating that enforcement of existing wage statutes (such as the federal Fair Labor Standards Act (FLSA)) is the province of the state and federal governments. The amendment responds directly to the national trend of cities and towns enacting wage theft laws that provide local enforcement mechanisms for minimum wage and overtime violations. (Such ordinances were proposed in Memphis and Shelby County earlier this year but didn’t pass.)

Also, the new law apparently would block local attempts to establish paid sick day requirements such as those created by ordinances in Philadelphia, San Francisco, and Seattle. And the new law expressly states that local governments can’t require employers to establish leave policies that deviate from the four-month leave requirement for childbirths and adoptions mandated by the state maternity/paternity leave statute.

Employers should welcome this development, which permits them to focus solely on state and federal requirements regarding worker pay and benefits. The new law will amend Tennessee Code Title 7 and Title 50.

The new law will be covered in more detail in a future issue of Tennessee Employment Law Letter.

Kara Shea is the editor of Tennessee Employment Law Letter and an attorney with Butler Snow, practicing in the Nashville office. She can be reached at 615-503-9112 or kara.shea@butlersnow.com.