Last reviewed September 28, 2026.
Tennessee is expanding the reach of its employment-verification law. Beginning January 1, 2027, many private businesses with as few as one employee will fall within the Tennessee Lawful Employment Act, or TLEA.
The change matters most to very small employers. Current law defines a covered “private employer” by reference to persons required by federal law to report remuneration paid to at least six employees. Public Chapter 622 of 2026 changes that threshold to at least one employee. The Act applies to conduct occurring and employees hired on or after January 1, 2027.
The new law does not mean every small Tennessee employer must automatically use E-Verify. The verification method still depends in part on workforce size. But a business that previously viewed the TLEA as inapplicable because it had fewer than six employees should not assume that position remains valid in 2027.
Key takeaways
Tennessee Public Chapter 622 takes effect January 1, 2027.
The law changes the definition of a covered private employer from an employer required to report pay for at least six employees to one required to report pay for at least one employee.
The existing mandatory E-Verify threshold for private employers with more than thirty-five full-time-equivalent employees is not eliminated by Public Chapter 622.
Smaller covered employers generally may use E-Verify or follow the TLEA's alternative document-retention process for newly hired employees.
The TLEA also addresses certain paid nonemployees, so businesses should review contractor onboarding as well as employee onboarding.
Form I-9, E-Verify, and the TLEA are related but distinct. A compliant process must account for each requirement that applies.
What changes on January 1, 2027?
Public Chapter 622 amends the TLEA's definition of “private employer.” Under the enacted language, the term will include a person required by federal law and regulations to report remuneration paid to at least one employee. The General Assembly's official bill history and summary confirms the January 1, 2027 effective date and states that the change applies to conduct occurring and employees hired on or after that date.
For practical purposes, the principal new group is employers with one to five employees. Employers already covered should still use the approaching effective date to test their process, because the Act also clarifies business-license consequences for violations. The enacted amendment provides for suspension until remediation after a first or second violation and permanent suspension following a third or subsequent violation.
The Tennessee Department of Labor and Workforce Development currently posts TLEA guidance and final enforcement orders. Those records show that enforcement is active and that failures involving only one or a few workers can lead to assessed penalties.
Small employer does not necessarily mean mandatory E-Verify
The distinction between TLEA coverage and mandatory E-Verify is important.
The Department's current employment-verification guidance states that private employers with thirty-five or more full-time-equivalent employees under the same federal employer identification number must use E-Verify for new employees. Employers below that threshold may choose between:
using E-Verify for newly hired employees; or
requesting and retaining a copy of an identity and employment-authorization document permitted by the TLEA.
Public Chapter 622 changes the definition of private employer; it does not state that the thirty-five-employee E-Verify threshold is reduced to one. Accordingly, a newly covered one-to-five-employee business should evaluate which permitted verification method fits its operations instead of assuming either that no action is required or that E-Verify is the only option.
The analysis can be different for a larger affiliated workforce, multiple hiring sites, federal contractors, or employers subject to another E-Verify mandate. Workforce counts and employer structure should be reviewed carefully rather than handled by location alone.
Do not confuse the state process with Form I-9
Federal law generally requires employers to complete Form I-9 for each employee hired in the United States. E-Verify is an electronic system that compares information from a completed Form I-9 with government records. The TLEA adds a separate state compliance layer.
That distinction produces two common mistakes. First, completing Form I-9 does not, by itself, establish compliance with the TLEA's alternative document-retention requirement. Tennessee's current guidance expressly states that an I-9 is not an acceptable substitute for the state-listed document.
Second, enrolling in E-Verify does not authorize prescreening. E-Verify's employer guidance states that a case is created after Form I-9 is complete and no later than the third business day after the employee begins work for pay. The program's governing terms prohibit using E-Verify to screen applicants before hire or using it selectively.
Employers should also use the current Form I-9. USCIS states that, beginning August 1, 2026, employers should use the edition carrying the May 31, 2027 expiration date.
Tentative nonconfirmations require a careful response
An E-Verify tentative nonconfirmation does not establish that a worker lacks employment authorization. It may result from a data-entry error or a mismatch in government records.
Employers must follow the required notice and resolution process. They should not terminate, suspend, delay training, reduce hours, or take other adverse action against an employee because of a tentative nonconfirmation while the employee timely contests it. The U.S. Department of Justice's Form I-9 and E-Verify guidance also warns against selective verification and requesting specific or additional documents based on citizenship status or national origin.
For a small business, the safest approach is to identify one trained person and a backup to administer the process. Improvising after a mismatch increases both verification and discrimination risk.
The law also reaches certain paid nonemployees
Tennessee's current guidance states that the TLEA covers “nonemployees”—individuals who are not directly employed but are paid directly by the business for labor or services. The guidance describes an exception when the worker is employed by a separate company.
This is another reason not to treat the TLEA as merely an I-9 rule. A business should inventory individuals paid directly for services, determine whether the statutory nonemployee provisions apply, and maintain the required records. That review should be coordinated with—but not substituted for—an independent-contractor classification analysis.
A practical preparation plan
Businesses do not need to wait until January to prepare:
Confirm coverage and counting. Identify the employing entity, FEIN, number of full-time-equivalent employees, Tennessee operations, hiring sites, and any federal-contract or industry-specific obligations.
Choose the permitted process. If E-Verify is mandatory, confirm enrollment and access. If the business may choose, compare E-Verify with the TLEA document-retention method and document the decision.
Update onboarding materials. Separate the federal Form I-9 process from the Tennessee step. Use checklists that identify timing, authorized documents, retention location, and escalation responsibilities.
Review nonemployee onboarding. Identify individuals paid directly for labor or services and determine what documentation the TLEA requires.
Train for E-Verify results. If the company uses E-Verify, train users on case timing, data entry, tentative nonconfirmations, nondiscrimination, and closing cases properly.
Audit record security. Limit access to identity and work-authorization records, use a consistent retention system, and avoid storing unnecessary copies in general personnel files.
Test before January 1. Walk through a mock hire and a mock tentative nonconfirmation so the first real case is not the training exercise.
The goal is a repeatable process that verifies work authorization without over-documenting, delaying lawful hires, or treating workers differently.
Jewell Law Group assists Tennessee businesses with employment-verification procedures, onboarding reviews, employee and contractor documentation, workforce audits, and related HR compliance planning.
Primary sources
Tennessee Secretary of State, Public Chapter 622 of 2026
Tennessee General Assembly, HB 1194 / SB 990 bill history and enacted summary
Tennessee Department of Labor and Workforce Development, Tennessee Lawful Employment Act guidance and final orders
E-Verify, E-Verify User Manual
E-Verify, Enrollment Process
U.S. Citizenship and Immigration Services, Form I-9 update
U.S. Department of Justice, Civil Rights Division, Form I-9 and E-Verify nondiscrimination guidance
This article provides general information and is not legal advice. Reading it does not create an attorney-client relationship. Laws, regulations, and agency guidance can change, and their application depends on the particular facts and jurisdiction. Businesses should consult qualified counsel about their specific circumstances. Do not send confidential or time-sensitive information before the firm confirms an engagement. See the Website Legal Notice.
