Question 1

Is PEO registration required in Tennessee?

Accepted Answer

Yes. Tennessee requires PEOs to register with the Department of Commerce and Insurance under the Professional Employer Organization Act (Tenn. Code 62-43). Registration is valid for two years from the date of issuance.

Question 2

What bonding requirements apply to PEOs in Tennessee?

Accepted Answer

Tennessee has two bonding layers. For licensure, the PEO must show positive working capital, or cover any deficiency with a surety bond, irrevocable letter of credit, or securities. For unemployment insurance, a $100,000 surety bond posted with TDLWD relieves clients of joint and several UI premium liability. This bond may be reduced to $35,000 after three consecutive years of timely premium payment.

Question 3

What is the SUI taxable wage base in Tennessee?

Accepted Answer

The SUI taxable wage base in Tennessee is $7,000. New employers pay a rate of 2.7%. The state requires PEOs to obtain an Aggregate State Number and register each client separately.

Question 4

How does unemployment insurance work for PEO clients in Tennessee?

Accepted Answer

TDLWD treats PEOs as employers under the Tennessee Employment Security Law. The PEO must complete an online registration and receive an Aggregate State Number. Each Tennessee client must be registered separately and file quarterly wage reports under its own client number.

Question 5

What is the minimum wage in Tennessee?

Accepted Answer

The minimum wage in Tennessee is the federal minimum of $7.25 per hour. The state does not have its own minimum wage law.

Question 6

How does workers' compensation work in Tennessee?

Accepted Answer

Tennessee has a private workers' compensation insurance market. Employers can purchase coverage from licensed carriers or through the NCCI assigned-risk plan administered by the state.

Tennessee PEO FAQs: Registration, Bonding, and SUI Requirements

Frequently Asked Questions