Can the Tennessee Department of Labor exempt an employer from paying private-sector wages on time?

Subject

Opinion No. 12-50, Department of Labor/Wage Regulations, May 8, 2012

Plain-English summary

Representative Judd Matheny asked the Tennessee AG three questions about how the state's wage-payment law works. The first: is there any way an employer can be relieved of its duty under Tenn. Code Ann. § 50-2-103(a) to pay employee wages? The second: what is the Commissioner of Labor's duty to enforce the statute? The third: if the Commissioner declines to pursue a violation, does that create an "exemption" for the employer?

The AG answered: no, the Commissioner has sole authority and discretion to bring civil or criminal action under § 50-2-103(i), and the Commissioner's choice not to enforce does not create an exemption. The wage-payment obligation in § 50-2-103(a) stands. Section 50-2-103(g) expressly says: "No employer shall, by any means, secure an exemption from this subsection (g)." Even when the state declines to act, the employee can still pursue a private civil action for unpaid wages, breach of contract, or other applicable claims.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical background and statutory framework

The wage-payment duty

Tenn. Code Ann. § 50-2-103(a) provides that "[a]ll wages or compensation of employees in private employments shall be due and payable" and sets payment timelines. Section 50-2-103(g) addresses separation pay (wages owed when an employee leaves or is discharged) and contains an explicit anti-exemption clause: "No employer shall, by any means, secure an exemption from this subsection (g)."

Penalties

Section 50-2-103(i) makes a violation a Class B misdemeanor punishable by a $100 to $500 fine. Employers willfully violating the statute face a civil penalty of $500 to $1,000 "at the discretion of the commissioner or the commissioner's designated representative." A determination that a violation was unintentional triggers a warning instead of a penalty for a first offense. On second or later violations, the civil penalty kicks in. The Commissioner has "sole discretion to elect to proceed either civilly or criminally," but cannot do both for the same violation.

What the AG read into "sole discretion"

The Commissioner's authority under § 50-2-103(i) is broad on the enforcement side. The Commissioner decides whether a violation occurred, whether to proceed civilly or criminally, and whether to issue a warning rather than a penalty. The AG read those as enforcement choices, not statutory authority to issue exemptions. Nothing in subsection (i), or anywhere else in § 50-2-103, lets the Commissioner waive the underlying wage-payment obligation. As the AG put it, "the action or non-action of the Department in the legitimate exercise of its enforcement duties cannot constitute the securing of an exemption to the employer in violation of subsection (g)."

The private right of action survives

A separate point: the Commissioner's decision not to act does not foreclose other legal action against the employer. Affected employees retain whatever rights they have under the wage statute itself, under their employment agreements, or under any other applicable law. The state's prosecutorial discretion is not a get-out-of-jail-free card for unpaid wages from the employee's perspective.

Statutory construction

The AG applied a standard plain-meaning approach (Brundage v. Cumberland County): when language is clear, courts apply it without expanding or restricting scope. The clarity of subsection (g)'s anti-exemption text and the structure of subsection (i)'s enforcement language together led to the AG's answers.

Common questions

My employer hasn't paid me in a month and the Department of Labor won't take my case. Am I out of luck?

According to this opinion, no. The Commissioner's choice not to enforce administratively does not extinguish the underlying wage-payment obligation. You may have a private civil claim for the unpaid wages and for any breach of your employment agreement. The opinion is historical; check current Tennessee wage-claim procedures and statutes of limitation with a lawyer or the Department of Labor and Workforce Development.

Can my employer get a formal exemption from paying separation pay?

The statute says no. Subsection (g) of § 50-2-103 expressly forbids securing an exemption from its requirements. The AG opinion reinforced that no department or commissioner can grant one either.

What's the difference between an exemption and prosecutorial discretion?

An exemption would mean the employer is not legally bound by the duty in the first place, or has been excused from it. Prosecutorial discretion means the state simply chooses not to bring an enforcement case in that instance. The obligation still exists; only the state's response changes. Civil claims by the employee, criminal liability if a prosecutor later acts, and the future civil-penalty exposure remain.

What penalties does the Commissioner have at her disposal?

Under the 2012 version of the statute: warnings for first-offense unintentional violations, civil penalties of $500 to $1,000 per willful violation, and prosecution for a Class B misdemeanor (fine of $100 to $500). The Commissioner picks civil or criminal for any given violation, not both.

Could the Commissioner just stop enforcing the wage statute against an entire industry?

The opinion is narrower than that. It says the Commissioner's discretion runs to individual enforcement decisions. A blanket non-enforcement policy designed to function as a categorical exemption would clash with subsection (g)'s anti-exemption language and with the legislature's allocation of duty to the Department.

Is this still how Tennessee wage enforcement works?

The opinion analyzed the 2012 statute. Tennessee labor laws have been amended numerous times. Verify current statutory text, current Department of Labor enforcement practice, and any later AG opinions before relying on this analysis today.

Citations

• Tenn. Code Ann. § 50-2-103(a) (private-sector wage-payment duty)
• Tenn. Code Ann. § 50-2-103(g) (separation pay and anti-exemption clause)
• Tenn. Code Ann. § 50-2-103(i) (penalties and Commissioner's enforcement discretion)
• Brundage v. Cumberland County, 357 S.W.3d 361 (Tenn. 2011)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2012/op12-050.pdf

Original opinion text

QUESTIONS

1. Are there any conditions under which an employer is exempted from its statutory obligation under Tenn. Code Ann. § 50-2-103(a) to pay all wages or compensation of employees in private employments?

2. What are the statutory obligations of the Commissioner of the Department of Labor and Workforce Development to enforce the requirements of Tenn. Code Ann. § 50-2-103(a)?

3. Does a decision by the Commissioner not to enforce the requirement of Tenn. Code Ann. § 50-2-103(a) constitute the grant of an "exemption" to an employer from the provisions of the statute?

OPINIONS

1. No.

2. Tenn. Code Ann. § 50-2-103(i) grants the Commissioner of the Department of Labor and Workforce Development the sole authority and discretion to proceed on behalf of the Department against an employer who has failed to comply with Tenn. Code Ann. § 50-2-103.

3. No.

ANALYSIS

Tenn. Code Ann. § 50-2-103 sets forth various requirements governing the payment of wages and compensation to employees in private employments and grants the Tennessee Department of Labor and Workforce Development the authority to enforce these requirements. The interpretation of these Tennessee statutes addressing wage regulations is governed by the well established rule of statutory construction that, when the language of a statute is clear and unambiguous, the statute's plain meaning will be applied without adopting any forced interpretation that would unduly restrict or broaden the statute's scope. Brundage v. Cumberland County, 357 S.W.3d 361, 364-65 (Tenn. 2011).

Tenn. Code Ann. § 50-2-103(a) provides that "[a]ll wages or compensation of employees in private employments shall be due and payable" and then specifies the time periods in which employers must make such payments. Tenn. Code Ann. § 50-2-103(g), which governs payments to an employee who leaves or is discharged from employment, plainly provides that "[n]o employer shall, by any means, secure an exemption from this subsection (g)." Tennessee Code Annotated § 50-2-103(i) provides in pertinent part:

A violation of this section is a Class B misdemeanor, punishable by a fine of not less than one hundred dollars ($100) nor more than five hundred dollars ($500). Further, every employer, partnership, or corporation willfully violating this section is subject to a civil penalty of not less than five hundred dollars ($500) nor more than one thousand dollars ($1,000) at the discretion of the commissioner or the commissioner's designated representative. Each and every infraction constitutes a separate and distinct offense. If the commissioner, or the commissioner's designated representative, determines that the violation was unintentional, there shall be a warning, in lieu of a penalty, on the first offense. On second or subsequent violations, the civil penalty is applicable and may be assessed at the discretion of the commissioner or the commissioner's representative. It shall be at the sole discretion of the commissioner to elect to proceed either civilly or criminally upon any violation of this part; however, the employer shall not be charged both civilly and criminally for the same violation.

As the statute clearly states, Tenn. Code Ann. § 50-2-103(i) vests the Commissioner of the Department with the sole authority and discretion to proceed against an employer who has failed to comply with Tenn. Code Ann. § 50-2-103. Accordingly, it is the responsibility of the Commissioner or the Commissioner's representative to make a determination, in light of available evidence, whether a violation of Tenn. Code Ann. § 50-2-103 has occurred and whether it should be pursued civilly or criminally. However, the action or non-action of the Department in the legitimate exercise of its enforcement duties cannot constitute the securing of an exemption to the employer in violation of subsection (g). No language in Tenn. Code Ann. § 50-2-103(i) can be read to permit the Department or Commissioner to expressly grant an employer an exemption for such a violation, although the Commissioner may, in his or her discretion, elect not to proceed on behalf of the Department civilly or criminally against an employer. Tenn. Code Ann. § 50-2-103(i). Accordingly, the Commissioner's failure to act does not in and of itself foreclose other possible legal actions against the employer, including the employee pursuing any available civil action against the employer for the violation of any employment agreement or any applicable law, including Tenn. Code Ann. § 50-2-103.

ROBERT E. COOPER, JR.
Attorney General and Reporter

WILLIAM E. YOUNG
Solicitor General

ALEXANDER S. RIEGER
Assistant Attorney General

Requested by:
The Honorable Judd Matheny
State Representative
47th Legislative District
15 Legislative Plaza
Nashville, Tennessee 37243