Tennessee Code Annotated
Tenn. Code Ann. § 50-2-107 (2026)
Distribution of service charges or gratuities
✓ current as of May 2026
- (a)
- (1) If a business, including a private club, lounge, bar or restaurant, includes on the bill presented to and paid by a customer, member or patron an automatic percentage or specific dollar amount denominated as a service charge, tip, gratuity, or otherwise, which amount is customarily assumed to be intended for the employee or employees who have served the customer, member or patron, that amount shall be paid over to or distributed among the employee or employees who have rendered that service. The payment shall be made at the close of business on the day the amount is received or at the time the employee is regularly paid, or, in the case of a bill for which credit is extended to a customer, member or patron, payment shall be made at the close of business on the day the amount is collected or on the first day the employee is regularly paid occurring after the amount is collected.
- (2) The payment shall not be reduced, docked or otherwise diminished to penalize an employee for any actions in connection with the employee's employment, if it is derived from a mandatory service charge or tip collected from customers, members or patrons.
- (3)
- (A) This section does not apply to bills for food or beverage served in a banquet, convention or meeting facility segregated from the public-at-large, except banquet, convention or meeting facilities that are on the premises of a private club.
- (B)
- (i) This section does not apply to bills presented to or charges paid by guests for accommodations and activities at a guest ranch.
- (ii) For purposes of subdivision (a)(3)(B)(i), "guest ranch" means a facility segregated from the public-at-large:
- (a) Offering accommodations for overnight stays and activities typical of western ranching;
- (b) That may provide other recreational activities exclusively for guests in conjunction with the ranching activities, including, but not limited to, fishing, hiking, horseback riding, rafting and swimming; and
- (c) At which food services are incidental to the operation of the guest ranch, are only for the guests of the guest ranch and the cost of which are included in the fee to stay.
- (b) A violation of this section is a Class C misdemeanor. Each failure to pay an employee constitutes a separate offense.
Acts 1983, ch. 152, § 1; 1989, ch. 591, § 113; 2012, ch. 895, § 1.
Notes of Decisions
Cited in 8
cases (1 in the last 5 years), 2010–2021 · leading case: Beacon4, LLC v. I & L Investments, LLC, 514 S.W.3d 153 (Tenn. Ct. App. 2016).
Beacon4, LLC v. I & L Investments, LLC, 514 S.W.3d 153 (Tenn. Ct. App. 2016). “In Hardy , this Court addressed the issue of whether the Tennessee Wage Regulation Act (“TWRA”), specifically Tennessee Code Annotated § 50-2-107 (2014), creates a private right of action against employers who fail to pay employees gratuities they have earned.”
Brown v. Tennessee Title Loans, Inc., 328 S.W.3d 850 (Tenn. 2010). “15, 1998) (inferring private right of action in tip statute, Tenn.Code Ann. § 50-2-107 (1991), on behalf of plaintiff service employees because statute was intended to protect them and private right would "complement[ ] the [criminal] remedy in the statute by providing a mecha…”
Hamilton Cnty. Emergency Commc'ns Dist. v. BellSouth Telecomm. LLC, 852 F.3d 521 (6th Cir. 2017). “8, 2017), the Tennessee Supreme Court recently held that the "Tip Statute” provision of the Tennessee Wage Regulation Act, T.C.A. § 50-2-107, does not imply a private right of action by a waitress whose employer had collected her tips from her customers but withheld them from…”
Kim Hardy v. Tournament Players Club at Southwind, Inc., d/b/a \TPC Southwind, 513 S.W.3d 427 (2017). “Whether the majority opinion of the Court of Appeals erred in relying on the standard contained within Owens v.”
Kim Hardy v. Tournament Players Club at Southwind, Inc. d/b/a \TPC Southwind\"" (Tenn. Ct. App. 2015). “Tenn. Code Ann. § 50-2-107 (2014). Section 107 contains no provision either limiting enforcement to the Department or explicitly creating a private right of action.”
Kim Hardy v. Tournament Players Club at Southwind, Inc. d/b/a \TPC Southwind\" - DISSENT" (Tenn. Ct. App. 2015). “While I agree with the majority that amendments to Tennessee Code Annotated section 50-2-101 do not govern enforcement of Section 50-2-107, I disagree with the court‟s interpretation of section 107 itself, and I further disagree with this Court‟s holding in Owens.”
Affordable Constr. Servs., Inc. v. Auto-Owners Ins. Co. (Tenn. 2021). “Following Brown, the Court considered in Hardy whether Tennessee’s Tip Statute, Tennessee Code Annotated section 50-2-107, allowed a server at a private dining club to bring a class action against her employer for violating the Tip Statute.”
Roane Cty. Emer. Commc'ns v. BellSouth (6th Cir. 2017). “8, 2017), the Tennessee Supreme Court recently held that the “Tip Statute” provision of the Tennessee Wage Regulation Act, T.C.A. § 50-2-107, does not imply a private right of action by a waitress whose employer had collected her tips from her customers but withheld them from…”
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