2023 TN Minimum Wage Guide for Restaurants

2023 TN Minimum Wage Guide for Restaurants

August 2, 2023

What is the minimum wage in Tennessee in 2023?

The minimum wage in Tennessee stands at $7.25, aligning with the federal minimum wage. TN doesn’t have a state minimum wage, and therefore follows the federal minimum wage of $7.25. Below is a 5 year view of the TN minimum wage:

  • 2018 - $7.25

  • 2019 - $7.25

  • 2020 - $7.25

  • 2021 - $7.25

  • 2022 - $7.25

  • 2023 - $7.25

Source: Tennessee Min Wage by Labor Law Center

Additional facts about the TN minimum wage:

  • Tennessee has the 46th highest minimum wage in the country, with California ($15.50), Washington ($15.74), and Massachusetts($15.00) as the top 3 states with the highest minimum wages.

  • Senate Bill 2670 seeked to increase the TN minimum wage to $15. This bill was introduced in March 2022 but failed in committee.

  • As TN follows the federal minimum wage, the TN minimum wage has not increased since 2009, which was the last time the federal minimum wage increased – from $5.58 to $7.25.

How Tennessee Businesses Can Offer Fair Wages

You have to get creative with thin restaurant margins! The easiest way to increase compensation for your staff is to increase their gratuity. It’s a win-win for your business and your employees.

  1. Hire the best hosting staff: Setting the stage for generous tips relies heavily on a strong guest greeting. A warm and attentive welcome ensures positive first impressions and sets the tone for the entire dining experience. It's important not to cut corners when it comes to your host staff. Meeting customer expectations for short wait times, acknowledging reservations, and providing friendly attention even during busy times can be challenging but is crucial for maximizing tips.

  2. Master the art of upselling: Elevating the bill by just 10% can translate into a 10% increase in tips. However, mastering this art requires skill and practice. Properly training your staff on effective upselling techniques can make a significant difference. Crafting a menu that naturally encourages upselling benefits both your staff and customers, making the process seamless and enjoyable.

  3. Tableside POS Service is a gamechanger: Adopting tableside point-of-sale (POS) systems, such as handheld tablets, offers multiple advantages. Beyond boosting overall sales and enhancing guest convenience, these systems expedite guest service. The efficiency gained from utilizing such technology contributes to higher tips for your staff.

  4. Increase your table turnover rate: The equation is simple: serving more customers results in the potential for higher tips. Striving for a rapid table turnover rate, ideally within 45 minutes per guest, has the potential to yield substantial tip pools for your staff on a nightly basis. Efficiently managing guest flow and providing exceptional service contribute to achieving this goal.

  5. Enable tipping on credit cards: Elevating the guest experience through quick and convenient payment options can significantly boost tips. Beyond the financial impact, offering streamlined payment methods enhances overall sales and expedites guest service, contributing to a positive atmosphere that encourages more generous tipping.

Use Margins to Improve Wages

Competitive wages don't have to be a luxury for small business owners! Here are some proven tips to increase your margins. 

  1. Design High Margins Into Your Menu: Craft your menu strategically to maximize profitability. Identify the menu items that generate the most revenue and give them prominent visibility. Incorporate premium or unique ingredients that justify slightly higher prices. By adjusting portion sizes, ingredients, and prices intelligently, you can enhance profits without compromising customer satisfaction.

  2. Dollar Saved is a Dollar Earned: Maintain meticulous control over your food and beverage costs. Stay proactive by effectively managing inventory, minimizing wastage, negotiating advantageous deals with suppliers, and exploring the benefits of bulk purchasing. Regularly assess your menu to align prices with changing ingredient costs and market trends.

  3. Use POS Technology to Save on Operations: Embrace cutting-edge technologies such as point-of-sale systems, online ordering platforms, and reservation systems to optimize operational efficiency. During peak hours, implement intelligent staff scheduling to cater to high demand, while ensuring prudent labor allocation during quieter periods. This approach minimizes costs while upholding quality service.

  4. Loyalty Programs & Marketing Strategy: Propel your margins by cultivating a loyal customer base. Engage customers through well-designed loyalty programs, robust branding efforts, and other strategic marketing initiatives. Although these strategies might necessitate initial investment, they yield enduring margin improvements. Regular patrons not only spend more per visit but also frequent your establishment more often, fueling sustained growth.

In Conclusion:

In summary, understanding Tennessee's minimum wage rules and effective compensation methods is vital for employers and employees alike. By staying updated on wage laws and implementing strategies to enhance compensation, restaurant owners can foster an excellent workplace, attract top talent, and motivate their staff to provide exceptional service, ultimately leading to the success and growth of their establishments.

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