Construction

Everyone needs to be covered.

All employers in the construction industry (construction service providers or CSPs) with one or more employees are required to obtain workers’ compensation insurance coverage for those employees. This includes any seasonal or part-time employees, family members of the business owner, or employees that work on an “as needed” basis.

In addition to construction services providers, employers in the coal mining industry must secure coverage for all employees.

Who is Considered an Employee?

Workers are identified as employees based on their working relationship with the business entity. Minors, working family members, and part-time employees are included when determining the total number of employees for a business. Review T.C.A. 50-6-102(10)(A) through (E) for the definitions of “Employee” or “Contractor”. 

The Bureau uses a seven-factor test to determine if a worker would be classified as an employee or an independent contractor.

1. The right to control the conduct of the work
2. The right of termination
3. The method of payment
4. The freedom to select and hire helpers
5. The furnishing of tools and equipment
6. Self-scheduling of working hours, and
7. The freedom to offer services to other entities

Even if a worker is provided an IRS Form 1099 instead of a W2, that does not mean they are properly classified for purposes of workers’ compensation. Each of the seven factors is considered with significant weight given to who controls the conduct of the work.

Do Admin Staff need to be covered?

Yes. The policy requirements are determined by the nature of the business, not the specific jobs of employees within a construction services provider.

Owners can exempt themselves from coverage

Owners of construction businesses are required to carry workers’ compensation coverage on themselves, but owners can apply for an exemption from the requirement to carry workers’ compensation coverage on themselves, if they meet certain qualifications.

Subcontractors:

It is important that construction service providers use subcontractors that are in compliance with workers’ compensation requirements. You can check your subcontractors coverage status through the coverage verification tool or exemption status on the Exemption Registry.

When verifying compliance, keep in mind that a workers' compensation exemption covers only the individual listed on the exemption; it doesn't cover the entire business or any of their employees.

If a subcontractor is suspected to be in violation of workers' compensation laws, this can be reported to the Uninsured Employers Fund on a Request For Investigation form.

Out of State CSPs

Construction Services Providers from other states operating in Tennessee must maintain a Tennessee workers’ compensation policy with “Tennessee” listed in section “3A” of the policy from the first day of operation in the state. This can be found in T.C.A. 50-6-115(e)(1).