New hiring laws in Tennessee for 2027: Lawful Employment Act at one employee, public employer E-Verify, the non-compete floor and what employers do next

As of November 2026, Tennessee's 2026 General Assembly made several changes to hiring, most of them on immigration status and local control. From January 1, 2027, the Tennessee Lawful Employment Act covers every private employer with at least one employee (it was six). Since July 1, 2026, state and local government employers must use E-Verify for new hires, new non-competes are void for employees paid under $70,000, commission pay has new deadlines, and trucking employers face new penalties for knowingly letting an unlawfully present driver operate a commercial vehicle. Earlier in 2026, the state preempted local rules on terms and conditions of employment and added a citizenship or qualified-alien check to many state licenses.

Each item below is a 2026 public chapter, linked to the act on the Secretary of State's site or the bill record on the General Assembly's site, with the effective date the bill record lists. The standing checklist (unemployment and new-hire reporting, I-9, E-Verify thresholds, required posters) is in our Tennessee hiring hub; this page is the dated list of what is new.

Which Tennessee hiring laws changed in 2026, and what changes in 2027?

Tennessee public chapters and the federal rules that apply to Tennessee employers, sorted by date.

What changes for small employers under the Lawful Employment Act on January 1, 2027?

Public Chapter 622 amends Tenn. Code Ann. 50-1-702(13) by deleting "at least six (6) employees" and substituting "at least one (1) employee" in the definition of a private employer. The act "takes effect January 1, 2027" and "applies to conduct occurring and employees hired on or after that date." Under the Tennessee Lawful Employment Act, a covered employer verifies each new employee either by enrolling in E-Verify or by requesting and keeping copies of the identity and work authorization documents the act lists; employers above the full-time-equivalent threshold described in our Tennessee E-Verify guide must use E-Verify. Public Chapter 622 does not change that threshold.

It does tighten enforcement. If a private employer fails to send the Commissioner of Labor and Workforce Development evidence of compliance within 45 days of a final order, the Commissioner must seek suspension of its local business license until it complies for a first or second violation, and permanently for a third. A family business, a small practice or a household employer that hires its first worker in 2027 now needs a documented verification step.

Which Tennessee employers must use E-Verify since July 1, 2026?

State and local government. Public Chapter 772 defines "employer" as the state and its branches and political subdivisions, including local education agencies, counties, municipalities and metropolitan governments, and says an employer may not "appoint or hire a prospective employee on or after July 1, 2026, without verifying the work authorization status of such prospective employee by using the E-Verify program." An employer that "currently uses a third-party vendor for Form I-9 verification" may keep the vendor until January 1, 2027. Employers must keep the E-Verify result for each employee for the length of employment, and the Attorney General may withhold state funds from a non-compliant local government. Staffing firms that place temporary workers into city or school roles should expect clients to ask how those workers were verified.

What did Tennessee change about non-competes and pay timing?

Public Chapter 934, effective July 1, 2026, bars requiring, requesting or enforcing a non-compete against an employee whose annualized compensation is under $70,000 and tells courts to presume a restraint of two years or less reasonable in time. It applies to agreements entered into, renewed or amended from that date. The detail, including the health care rule and what a recruiter should ask, is in Tennessee non-compete law.

Public Chapter 617 amends Tenn. Code Ann. 50-2-103 for wages earned on or after July 1, 2026. For an employee paid "on a piece-work or commission basis," compensation is "due and payable by the last day of the succeeding month," both during employment for monthly payers and after a discharge or resignation, and "an employer shall not, by any means, secure an exemption." Commission plans in offer letters for sales and recruiting roles should state those dates.

What changed for drivers, licensed workers and public safety hires?

• Commercial drivers. Public Chapter 1070 makes it a Class A misdemeanor for a "direct employer" (the entity that hires, pays and directly supervises the driver, not a shipper or broker) to knowingly employ and allow a person unlawfully present in the United States to operate a commercial motor vehicle, and makes such an employer strictly liable for resulting injury or damage. A direct employer is presumed not to have acted knowingly if it complies with the Lawful Employment Act's verification rules, which is another reason to document verification for every driver.
• Licensed occupations. Public Chapter 955 requires an applicant to be a U.S. citizen or a "qualified alien" for many state credentials, including educator licenses and licenses from the health-related boards, for licenses applied for or renewed after it took effect. Recruiters placing teachers, nurses and allied health staff should confirm status before a licensing timeline is promised.
• Public safety screening. Public Chapter 849 covers employers that require a mental health evaluation for police, fire, EMS and licensed private protective services positions. An applicant denied because of the evaluation must get access to the results and may submit an alternative evaluation from a qualified mental health professional at their own expense, which the employer "may" use to reevaluate. Security firms that screen guards this way are covered.
• Pardons and expunction. Public Chapter 719 lets a court expunge a pardoned conviction unless it is one of a listed set of serious felonies, such as first or second degree murder or a registrable sexual offense, weighing public safety. Fewer pardoned convictions will appear on reports. The federal EEOC rescinded its 2012 criminal records guidance on October 28, 2026 (EEOC release); Title VII still applies, and a job-related review using the Green factors from the 1975 Eighth Circuit case (the nature and gravity of the offense, the time since it and the nature of the job) remains a sound way to decide. See Tennessee background check laws.

Can Tennessee cities add their own hiring rules?

Less than before. Public Chapter 552 adds subsection (g) to Tenn. Code Ann. 7-51-1802: "The general assembly preempts and occupies the entire field of regulating the terms and conditions of employment," and unless state law expressly provides otherwise, a local government may not adopt or enforce a rule "that requires a term or condition of employment that exceeds or conflicts with" state or federal law. It does not apply to a local government's own employees, so Memphis's own ban-the-box process for city jobs, described in Tennessee ban-the-box rules, is not affected.

What should Tennessee employers do before January 1, 2027?

1. Set up verification for every new hire if you have fewer than six employees: enroll in E-Verify or keep the listed documents for anyone hired from January 1, 2027.
2. Move public-sector hiring onto E-Verify if you still use an I-9 vendor.
3. Rewrite non-compete and commission templates for the $70,000 floor and the new commission deadlines.
4. Document driver verification for every commercial driver you directly employ.
5. Check Form I-9 editions and work permit dates under the federal changes in the table, and remove references to the 2012 EEOC guidance from background check procedures.

What does this mean for staffing agencies in Tennessee?

Most agencies already exceed six employees, so the 2027 change matters mainly to small search firms and to clients that converted contractors into their first employees. An agency that hires, pays and directly supervises drivers fits the "direct employer" definition in Public Chapter 1070, so who supervises placed drivers belongs in the client contract, and agencies paying commissions to their own recruiters must meet the new deadlines. When an assignment ends, a claimant's refusal of other work is now judged without the wage-percentage test that Public Chapter 1043 removed. See our Tennessee staffing agency guide and employer of record in Tennessee; other states are in new hiring laws for 2027.