Workers Compensation Uninsured Employers Fund Collects Record Penalties

NASHVILLE - Tennessee Department of Labor and Workforce Development Commissioner James Neeley announces a record penalty collection of $1,012,161 assessed against employers for non-compliance with the insurance requirements of the Workers’ Compensation Law during fiscal year 2006-2007. The Uninsured Employers Fund (UEF) is a program created by statute in 2000 to reduce the problem of injured employees not being covered by Workers’ Compensation Insurance.

“I am extremely proud of my staff who is dedicated to the principles of conscientious public service in order to make this program fair to all its stakeholders,” said Commissioner Neeley. “This program has been successful because of the dedication of my staff to get the message of the Uninsured Employers Fund out to the public and their willingness to examine methods of improving our process.”

State law mandates that the Division of Workers’ Compensation’s UEF ensure that companies properly qualify as a self-insured employer or have workers’ compensation coverage in compliance with the insurance requirements of the Workers’ Compensation Law. A significant increase in penalties occurred after the 2004 Workers’ Compensation Reform Act which allowed the department to hire more staff therefore increasing the investigations and the ability to accomplish the UEF mission.

Below is a look at the improvements over the last few years;

During an investigation, the employer is required to show proof of compliance with the insurance requirements of the Workers’ Compensation Law or provide documentation as to why they are not required to carry workers’ compensation coverage. If workers’ compensation coverage is obtained, a penalty for the period of noncompliance is assessed at a rate of one and one half times the average yearly workers’ compensation premium. If workers’ compensation coverage is not obtained, a penalty for the period of noncompliance is assessed at a rate of two and one half times the average yearly workers’ compensation premium.

Investigations are largely complaint driven. If you suspect an employer does not have workers’ compensation insurance as required by Tennessee law, please contact the Division of Workers’ Compensation’s Uninsured Employers Fund at 1-800-332-2667 (within Tennessee) or 615-532-1319.