October 2026 Newsletter

Tennessee E-Verify Requirements Expand January 1, 2027

Tennessee Employers Should Review Their Hiring and Employment-Verification Procedures Now

October is a good time for Tennessee employers to begin reviewing their employment-verification procedures before several important changes to the Tennessee Lawful Employment Act (TLEA) take effect on January 1, 2027.

The changes will significantly expand the number of Tennessee private employers that fall within the statute's definition of a "private employer." Beginning January 1, 2027, the definition will generally include a person required by federal law to report remuneration paid to at least one employee. The current definition generally uses a threshold of six employees.

For smaller Tennessee employers that previously fell outside the applicable requirements, this change deserves particular attention.

What Is Changing?

The Tennessee Lawful Employment Act addresses employment verification and an employer's obligation to ensure that employees are authorized to work in the United States.

Under the changes taking effect January 1, 2027, the definition of a covered private employer will be expanded substantially.

This means that employers should not assume that being a small employer means the Tennessee Lawful Employment Act does not apply.

In addition, Tennessee has continued to enforce its existing employment-verification requirements. The Tennessee Department of Labor and Workforce Development's 2026 enforcement records include penalties against employers for failing to properly verify employees and, in some cases, failing to enroll in or properly use E-Verify.

What Should Employers Do Now?

Employers should use the fourth quarter of 2026 to review their hiring process rather than waiting until January.

1. Review Your Current Hiring Process

Identify who is responsible for:

• Completing Form I-9;
• Maintaining I-9 records;
• Determining whether E-Verify must be used;
• Completing E-Verify cases when required;
• Responding to Tentative Nonconfirmations (TNCs);
• Maintaining employment-verification documentation; and
• Monitoring changes in federal and Tennessee requirements.

The person responsible for hiring should understand that Form I-9 and E-Verify are related but separate processes. Completing an I-9 does not, by itself, satisfy an employer's E-Verify obligations when E-Verify is required.

2. Determine Whether Your Company Will Be Covered in 2027

Employers that have historically been below Tennessee's applicable employee threshold should take a fresh look at their status.

The January 1, 2027 change is particularly important for:

• Small businesses;
• Family-owned businesses;
• Professional offices;
• Small nonprofit organizations;
• Restaurants and retail businesses;
• Contractors; and
• Other employers with relatively few employees.

The change is designed to bring substantially more Tennessee private employers within the statute's definition of "private employer."

3. Audit Your Existing I-9 and E-Verify Procedures

Employers should consider conducting an internal review before year-end.

Questions to ask include:

Who completes I-9 forms?

Where are I-9 records maintained?

Who has access to those records?

Who is responsible for E-Verify cases?

Are E-Verify cases created within the required timeframe?

Are TNCs handled correctly and confidentially?

Are employees treated consistently throughout the verification process?

Are former employees' records retained for the appropriate period?

An audit can identify procedural problems before they become compliance problems.

What About Existing Employees?

Employers should be cautious about using a new requirement as an excuse to reverify every employee's employment authorization documentation.

The appropriate treatment of existing employees depends upon the employer's circumstances, the applicable federal I-9 rules, and whether Tennessee law requires a particular verification procedure.

HR personnel should therefore avoid implementing a blanket "everyone must bring in new documents" policy without first reviewing the applicable requirements.

Train Managers and Supervisors

Employment verification should generally be handled by the individuals designated by the employer—not by individual supervisors making their own decisions.

Managers should know that they should not:

• Ask employees for additional immigration documents;
• Require a particular type of document;
• Make assumptions about an employee's immigration status;
• Threaten termination based solely on an E-Verify issue;
• Discuss an employee's immigration or verification information with coworkers; or
• Attempt to resolve verification issues independently.

Instead, verification questions should be directed to the designated HR or administrative contact.

Don't Forget Federal Requirements

Tennessee's requirements operate alongside federal employment-verification requirements.

Employers should therefore review both:

• Federal Form I-9 requirements, and
• Tennessee's Lawful Employment Act requirements.

A Tennessee employer can have obligations under both systems.

Employers should also monitor federal changes because federal immigration and employment-verification requirements can change independently of Tennessee law.

A Good Fourth-Quarter HR Project

October through December is an excellent time to conduct a simple Employment Verification Compliance Audit.

Consider creating a checklist containing the following:

☐ Confirm the person responsible for I-9 compliance.

☐ Confirm the person responsible for E-Verify.

☐ Review the company's current E-Verify enrollment status, if applicable.

☐ Review several recently completed I-9 forms for obvious errors.

☐ Confirm that E-Verify cases are being handled within required timeframes.

☐ Review procedures for handling Tentative Nonconfirmations.

☐ Confirm that verification records are maintained securely.

☐ Review who has access to I-9 and E-Verify information.

☐ Train managers not to request additional immigration documentation.

☐ Determine whether the employer will be subject to the expanded Tennessee requirements beginning January 1, 2027.

☐ Update the employee handbook or hiring procedures if necessary.

Important 2027 Enforcement Consequence

The changes taking effect January 1, 2027 are not simply a change in terminology.

According to the Tennessee Department of Labor and Workforce Development, private employers found to be in violation of the Tennessee Lawful Employment Act on or after January 1, 2027, will have 45 days from the final order to submit required compliance documentation. Failure to provide the required documentation can result in suspension of the employer's business license for a first or second violation until the violation is remedied, and permanent suspension for a third or subsequent violation.

That makes advance preparation particularly important for smaller employers that may not have previously considered themselves subject to these requirements.

October Action Item

Don't wait until January 1, 2027.

Employers should use the final quarter of 2026 to identify whether the Tennessee Lawful Employment Act will apply to them, review their I-9 and E-Verify procedures, identify the person responsible for compliance, and train anyone involved in the hiring process.

A relatively small investment of time now can help prevent a much larger compliance problem later.