Unemployment Compensation - As introduced, removes a requirement that work be deemed suitable for a claimant if certain criteria are met and a claimant's gross weekly wages equal or exceed certain threshold percentages of the claimant's weekly wage for insured work for the quarter of the base period when the claimant's wages were greatest. - Amends TCA Section 50-7-303.

114th Regular Session (2025-2026) Introduced by William Lamberth

HB 2542 removes the wage-threshold test for “suitable work” in unemployment benefits, relying instead on other criteria like health, safety, and experience.

Signed by Senate Speaker

#unemploymentcompensation

Summary of HB 2542 (Session 114) — Unemployment Compensation – Suitable Work Criteria

Purpose and intent

The bill amends Tennessee Code Annotated, Section 50-7-303, to modify how “suitable work” is determined for unemployment benefits.

Specifically, it removes a wage-based threshold from the criteria used to decide whether a job offer or proposed work is suitable for a claimant.

Key provisions and changes

Section amended: TCA 50-7-303(a)(3)(A).

What is removed:

The existing requirement that a job be deemed suitable only if the gross weekly wages for the work equal or exceed certain percentages of the claimant’s average weekly wage for insured work, calculated during the quarter of the base period in which the claimant’s wages were highest.
The text that described “the work is suitable if the work meets all the other criteria of this subdivision (a)(3) and if the gross weekly wages … exceed the following percentages …”

Result of the change:

The bill eliminates the wage-threshold criterion in determining suitability of work for unemployment benefits.
The other existing criteria for suitability (health, safety, morals, physical fitness, prior training, experience and earnings, length of unemployment, local job prospects, and distance from residence) remain in place.

Who and what would be affected

Unemployed claimants seeking unemployment benefits.

The Tennessee Department of Labor and Workforce Development (DLWD), specifically the Division of Employment Security, which administers unemployment benefits and determines suitability of offered work.

Employers offering suitable work, as decisions on benefit eligibility could affect whether a claimant is disqualified for benefits for declining suitable work.

Procedural and timeline considerations

Effective date: The act becomes law upon the Governor’s signature (i.e., it is effective “upon becoming a law” and is subject to the public welfare clause).

Enactment and process history (highlights):

The bill originated as HB 2542 (Lamberth) and was paired with SB 1874 (Johnson).
It passed the House and Senate and was enrolled/signed in late April to early May 2026.
The fiscal note indicates a NOT SIGNIFICANT fiscal impact and no significant effect on commerce or jobs.

Fiscal and economic impact

Fiscal impact: Not significant. The fiscal note suggests removing the wage threshold may change disqualification rates marginally, but overall benefit payments and DLWD operations are not expected to be materially affected.

Economic impact: Expected to be not significant; the change is primarily administrative and affects the interpretation of “suitable work,” not broad policy shifts in benefits levels.

Practical takeaway

Under current law prior to this bill, a claimant could be disqualified for unemployment benefits if the offered “suitable” job did not meet minimum wage thresholds relative to the claimant’s prior earnings. HB 2542 removes that wage-based gatekeeper, relying more on other criteria (health, safety, fitness, experience, local prospects, etc.) to determine suitability.

For claimants, this could mean that some job offers that would have previously been deemed unsuitable due to lower wage comparisons may be considered suitable if they meet the remaining criteria.