The minimum wage in Tennessee is currently $7.25 per hour. This is just like in many other states, where the basic pay rate aligns with the federal minimum. Its default is the federal rate established by the Fair Labor Standards Act (FLSA), since the state has not enacted its own minimum wage legislation. If employees earn tips, they have to earn a base rate of $2.13 per hour, where their total earnings (basic + tips) should match the federal rate of at least $7.25 per hour. Truth be told, the cost of living in major hubs like Nashville is higher than the rest of the state on average, and there are no separate city-level minimum wages to compensate for this, due to state laws that block local governments from setting their own rate.
Minimum Wage in Tennessee
Working in Tennessee, or simply running a business there? The figure that needs to register in your mind is $7.25 an hour. It is the federal minimum wage currently set by Washington, D.C., for the U.S.
That's also the only hourly minimum wage, period, for the whole state. It has not changed since 2009. California is among a group of almost 30 states in the country to establish automatic annual increases that keep up with inflation or vote on gradual increases toward a $15-per-hour minimum wage. Tennessee maintains that only federal guidelines are necessary. If the federal government doesn't move the needle, it means the minimum wage stays the same.
While this stability certainly grants business owners more predictable labor costs, for the worker, it means wages remain flat even as the cost of groceries and rent rises in increasingly hot communities like Nashville and Chattanooga, putting more strain on budgeting and forcing up dissatisfaction.
What Is the Rate?
It is among five states in the U.S. that, along with Alabama, Louisiana, Mississippi, and South Carolina, do not have a state minimum wage law. That means when a state does not come up with a rate, by law, employers shall revert to the Federal FLSA.
So, while you will often hear people ask what Tennessee's minimum wage is, the legal answer is technically that Tennessee doesn't have one. The practical answer, however, is the federal rate of $7.25 per hour that is applicable by default.
That ultimately means any changes in your paychecks are wholly out of the hands of Congress in Washington, D.C., and not with the state legislature in Nashville. Until the federal law is different, $7.25 is the foundation.
Region-Wise Rates
Does working in a busy, touristy hub like Nashville attract better pay than certain rural or lesser-crowded parts of the state?
While a minimum wage is differentiated by region in order to compensate for differences in the cost of living in states such as New York or New Jersey, that is not the case, however, in Tennessee.
The minimum wage in Tennessee is state-wide, pegged at the standardised federal minimum of $7.25 per hour. It does not matter whether you are flipping burgers in Chattanooga, singing at a bar downtown Nashville, staffing a hotel in the Great Smoky Mountains, or retailing in rural West Tennessee; it's all the same to the minimum wage requirement, surprisingly.
Due to their high cost of living, Nashville and Memphis have seen recent local movements to increase wages higher than the federal rate, and rightfully so.
On the other hand, a state law was passed in 2013 that directly stopped local governments from implementing a minimum wage rate greater than the state standard to avoid wage rate subjugation.
This means that a coffee shop in Memphis has the same legal minimum wage obligation as one diner in some tiny rural town, though the huge difference in rent and cost of living between those two areas is immense. This leads to wage bias in the end, frankly speaking.
Minimum Wage in Tennessee Cities based on Employee Count
Does the size of the business matter? In some states, small businesses with fewer employees get a break and can pay a slightly lower rate.
In Tennessee, the rule is generally one-size-fits-all, but with a nuance regarding federal coverage. Since Tennessee relies on the FLSA, the minimum wage applies to businesses with an annual gross volume of sales or business done of at least $500,000.
However, even if a small business makes less than that, they are often still covered if their employees engage in commerce that happens across states. In the modern world, this is a very broad definition.
If employees handle credit card transactions, order goods from out of state, or even send emails to clients in other states, the business usually has to comply with the $7.25 federal rate.
For the vast majority of employers and employees in 2025, employee count does not lower the minimum wage obligation below $7.25.
Tennessee Minimum Wage Rate by Industry
The law treats certain industries and types of workers differently, despite the standard minimum ensured by the federal minimum. If you are in hospitality or just starting your first job, the rules change.
Tipped Employees
The restaurant and hospitality industry operates under the tip credit system, which works as below-
- Cash Wage: Employers can pay a base rate of $2.13 per hour.
- The Catch: Only if the employee's tips bring their total hourly earnings up to $7.25 is this tenable.
- Employer Responsibility: If a server has a slow shift and their tips plus the $2.13 base don't add up to $7.25 an hour, the employer must pay the difference, no questions asked.
Youth Minimum Wage
To encourage hiring young people, federal law allows a minimum wage for the youth too.
- Rate: $4.25 per hour.
- Who: Employees under 20 years of age.
- Duration: This rate will only be paid for the first 90 consecutive calendar days of employment. After that is up, or if and when the employee turns 20, the pay must go back to the standard $7.25.
Student Learners & Full-Time Students
This is about students working in retail, agriculture, or at colleges. They can be paid 85% of the minimum wage (which is roughly $6.16) under specific certificate programs authorized by the Department of Labor. While less common, it’s still relevant for some campus jobs (like teaching assistants) or internships.
History of Tennessee's Minimum Wage Rates
Tennessee's wage history is essentially a mirror of the federal wage history. The state has not enacted a rate hike independent of the federal government in modern history.
It is when the federal minimum wage jumped from $6.55 to $7.25, way back in 2009, when Tennessee saw its mandated pay rise. The rate has practically remained unchanged for over 15 years, ever since, which is arguably the longest period without an increase since the minimum wage itself was created in 1938.
Tennessee Historical Minimum Wage Rates (2005-2025)
Here is a look at how the rate has tracked over the last two decades.
| Year | Tennessee Minimum Wage | Federal Minimum Wage | Notes |
|---|---|---|---|
| 2025 | $7.25 | $7.25 | Rate remains unchanged. |
| 2024 | $7.25 | $7.25 | No state legislation was passed. |
| 2023 | $7.25 | $7.25 | |
| 2022 | $7.25 | $7.25 | |
| 2021 | $$7.25 | $7.25 | |
| 2020 | $7.25 | $7.25 | |
| 2019 | $7.25 | $7.25 | |
| 2018 | $7.25 | $7.25 | |
| 2017 | $7.25 | $7.25 | |
| 2016 | $7.25 | $7.25 | |
| 2015 | $7.25 | $7.25 | |
| 2014 | $7.25 | $7.25 | |
| 2013 | $7.25 | $7.25 | State preempts local wage hikes. |
| 2012 | $7.25 | $7.25 | |
| 2011 | $7.25 | $7.25 | |
| 2010 | $7.25 | $7.25 | |
| 2009 | $7.25 | $7.25 | Increased from $6.55 in July 2009. |
| 2008 | $6.55 | $6.55 | Increased from $5.85 in July 2008. |
| 2007 | $5.85 | $5.85 | Increased from $5.15 in July 2007. |
| 2006 | $5.15 | $5.15 | |
| 2005 | $5.15 | $5.15 |
Living Wage vs. Minimum Wage in Tennessee
Distinguishing between the minimum wage that is legally enforced and a living wage, which is the minimum one needs to survive, is imperative.
$7.25 is maybe what the law necessitates paying, but the market often demands much more. Try hiring reliable staff at $7.25 in cities like Nashville, and you’ll know how incredibly difficult it is. Most jobs that are considered entry-level at fast-food chains or retail stores in Tennessee now voluntarily pay between $12 and $15 an hour simply because they want to attract more applicants (not the quality of them, but the quantity first).
A single adult in Tennessee needs to earn significantly more than $7.25 - closer to $16 - to just cover basic needs like housing, transportation, and food that too, without any government assistance. Since legal wages did not keep pace with the economic reality, many businesses voluntarily pay above the minimum today to attract workers.
FAQs
1. Will the Tennessee minimum wage go up in 2025?
No, there is not a law in effect which will increase the minimum wage in Tennessee in 2025. It will stay at $7.25 until an increase can be passed by Congress in the United States.
2. What is the minimum wage for waiters and bartenders in Tennessee?
Tipped employees can be paid an hourly wage of $2.13 if they are getting tips. But if their tips do not raise their wages to at least $7.25 per hour, then they have to be paid compulsorily by their employers.
3. Can cities like Nashville or Memphis raise their own wage?
No. Although the cost of living in Nashville is higher, local towns in Tennessee are not allowed to establish their own local minimum wage. The minimum wage in Nashville remains $7.25.
4. Are there any exceptions to the $7.25 minimum wage?
Yes. Exceptions include employees under 20 years old, who can be paid $4.25 for the first 90 days, employees with tips, and full-time students or handicapped employees with a given certificate.
5. Do small businesses have to pay minimum wage in Tennessee?
Usually, yes. With gross sales over $500,000 in a year or in engaging in interstate commerce (as most do), they are compelled to meet the federal minimum of $7.25.
6. How does Tennessee compare to neighboring states?
States with lower minimum wages include Tennessee. States such as Arkansas ($11.00) and Missouri ($13.75) have higher minimum wages compared to Tennessee. Tennessee ties with other states such as Mississippi, Alabama, and Georgia with a minimum wage of $7.25.
7. Who do I contact if I am not being paid minimum wage?
As Tennessee does not have a state agency enforcing minimum wage standards, you will need to contact the Wage and Hour Division of the U.S. Department of Labor.