Workers comp coverage required in Tennessee
Employers with 5 or more employees are generally required to carry workers' compensation insurance, with exceptions for certain industries. Verified 2026-05-09.
Who must carry workers comp in Tennessee?
Tennessee workers compensation coverage is required Employers with 5 or more employees are generally required to carry workers' compensation insurance, with exceptions for certain industries.
The threshold language matters: states write the rule slightly differently. Some count any worker, some count only W-2 employees, some count owners separately, some have industry-specific exemptions (agriculture, domestic service, casual labor). For a Tennessee employer with a non-trivial workforce, the safest default is: assume coverage is required and confirm with the state department of insurance or a local agent.
How the threshold interacts with 1099s and subs
Workers are generally presumed to be employees unless they meet specific criteria for independent contractor status, often based on control and economic dependence. General contractors are generally liable for the workers' compensation coverage of uninsured subcontractors and their employees.
Penalty for going without
Penalties for non-compliance include fines, stop-work orders, and potential criminal charges, with employers liable for all medical expenses and lost wages. The financial penalty is usually a fraction of the human cost: an injured employee at an uncovered employer can sue directly under tort law instead of being limited to the workers comp benefit, exposing the owner to lost-wage damages, pain and suffering, and punitive damages without the corporate veil.
Related reading
FAQs
Who has to carry workers comp in Tennessee?
Employers with 5 or more employees are generally required to carry workers' compensation insurance, with exceptions for certain industries.
When does the requirement kick in for a new Tennessee employer?
The clock starts on the first day the first qualifying employee is on the books. Tennessee does not have a grace period for new employers, so a policy needs to be bound on or before the first hire date. Some agents can issue same-day binders for low-risk class codes.
What is the penalty for not having workers comp in Tennessee?
Penalties for non-compliance include fines, stop-work orders, and potential criminal charges, with employers liable for all medical expenses and lost wages.
Do 1099 contractors trigger the coverage requirement in Tennessee?
Workers are generally presumed to be employees unless they meet specific criteria for independent contractor status, often based on control and economic dependence.
Are subcontractors counted toward the threshold in Tennessee?
General contractors are generally liable for the workers' compensation coverage of uninsured subcontractors and their employees.
What happens if I am audited and found non-compliant in Tennessee?
Tennessee typically issues a stop-work order, assesses back premium for the period of non-coverage, and adds penalties on top. Specifically: Penalties for non-compliance include fines, stop-work orders, and potential criminal charges, with employers liable for all medical expenses and lost wages. Severe or repeat violations can lead to criminal charges and personal liability for the business owner, separate from the corporate veil.