Workers’ compensation requirements for Tennessee employers to keep track of

Why should employers in Tennessee take a look at workers’ compensation?

When a company carries a workers’ compensation policy (also known as workman’s comp), there can be benefits that both the employer and employee experience. For example, should a worker experience an injury or develop an occupational disease while on the job, coverage is likely to provide partial wage replacement, some medical benefits, and partial disability benefits (either temporary or total) should they need to miss work.

In addition, employers that have a workers’ compensation policy generally shield themselves from potential legal liability should an employee experience a work-related injury or occupational illness while on the job.

Now that we better understand how coverage can benefit both companies and their workers, let’s find out who should carry workers’ compensation in Tennessee.

Employers who must have workers’ compensation insurance

Every employer in the state of Tennessee that has five (5) or more full- or part-time employees must secure workers’ compensation insurance coverage for their employees. This rule includes family members who are employees, part-time employees, and also corporate officers — even if those corporate officers decline coverage.

Note: Generally, an employee is someone who receives instructions on the tasks they need to complete, is provided equipment to complete work, and does not have a number of clients. Learn more in our guide to employee classification.

There are times when employers that have less than five employers must carry a policy.

• All employers in the construction industry (construction service providers) must have a workers’ compensation policy.
• Employers in the coal mining industry that have one (1) or more employees are required to have workers’ compensation coverage, unless they are specifically exempted.

We should point out: If an employer, that is not in the construction or the coal mining industry, experiences a staff reduction and their employee count drops below below five, the employer may elect to drop its workers’ compensation coverage. To drop the coverage, the employer must file a Notice of Withdrawal from Coverage of the Tennessee Workers’ Compensation Law (Form I-3) with the Tennessee Bureau of Workers’ Compensation.

The employer will be exempt from the coverage requirements and will not be required to provide workers’ compensation coverage while its workforce remains below five employees only after the form has been accepted by the Bureau.

Are there any workers’ compensation exemptions in Tennessee?

There can be some exceptions to those who have to have workers’ comp coverage.

• State and local governments and those employing farm laborers or domestic help are exempt from the coverage requirements but may elect to purchase workers’ compensation coverage anyway.
• Sole Proprietors, Partners, and Members of LLC’s are excluded from the count of employees that determines whether or not an employer is covered by the Tennessee Workers’ Compensation Act.
• Corporate officers are able to exempt themselves from a workers’ compensation policy, but are NOT excluded from the count of employees unless they are being compensated.

If an employer isn’t required to have worker’s compensation insurance and an employee gets hurt at work, the injured worker is not entitled workers’ compensation benefits, they are not prohibited from filing a lawsuit against the employer.