Most states require businesses to carry workers’ compensation insurance, but Tennessee has different rules. Some employers in Tennessee do not have to carry this insurance, depending on their type of business and the number of employees they have.
It is important to understand how workers’ compensation law affects your place of employment. This will help you protect your own rights, especially if you experience a workplace accident yourself.
When must Tennessee employers carry workers’ comp insurance?
Tennessee law says that businesses with five or more employees must carry workers’ compensation insurance. This rule applies whether the employees are full-time or part-time. Family members working in the business count toward the total. Construction businesses face stricter rules. A construction company must carry workers’ compensation insurance even if it has only one employee.
How can some employers avoid carrying workers’ comp insurance?
Some employers fall into categories that allow them to opt out of carrying workers’ compensation insurance. These include sole proprietors and partnerships with no employees. Certain agricultural employers may also qualify for an exemption. However, even when the law does not require coverage, many employers choose to carry it to protect themselves and their workers.
When an employer opts out of workers’ compensation coverage, it can cause problems for both the employer and the workers. If an employee gets hurt on the job, the employer may have to pay for medical bills, lost wages and other costs directly. The injured worker might need to go to court to get those costs covered. Without insurance, the process takes more time and creates more risk for both sides.
Some businesses try to avoid the rules by misclassifying workers as independent contractors. This can lead to serious penalties if the state finds out. The Tennessee Bureau of Workers’ Compensation investigates these issues and can fine businesses that do not follow the law.
Choosing not to carry workers’ compensation insurance might save money at first, but it brings long-term risks for the business. Understanding whether your employer must carry workers’ compensation insurance will help you take the correct action after an accident.
