Bill to Provide Workers’ Comp Relief for Small Companies

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Self-employed Tennessee contractors are one step closer to relief from having to comply with onerous workers’ compensation insurance requirements. A bill passed by the House Consumer and Employee Affairs Committee, and which is expected to sail through the legislature, would allow independent contractors to file for exemptions from a law that was set to go into effect in January but was put on hold. That law would have required independent construction contractors to purchase costly workers’ compensation insurance or cease working.

Small contractors with no employees except themselves had complained that the law passed in 2008 would have cost them as much as $8,000 annually. They said thousands of small contractors would have become unemployed or would be forced to work under the table had the original legislation gone into effect.

The compromise bill before the legislature clarifies those self-employed contractors who choose not to buy workers’ compensation insurance will not be eligible for coverage under a general contractor’s policy. General contractors had originally opposed the opt-out provisions out of fear that uncovered subcontractors would make claims against them for workers’ compensation.

To be eligible for an exemption, a small contractor must own at least 30 percent of the company he works for and must pay an annual $50 filing fee. With the compromises, the workers’ compensation bill gained the support of both small and large contractors in the state.

The new law has a few more hurdles to clear in the legislature but is expected to pass and be ready for the governor’s signature in time to take effect July 1, according to The Tennessean.