TN Legislative Update: New Workers' Comp Law Affecting Construction Industry Goes Into Effect January 1, 2010
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Back in November, I wrote about a Tennessee Attorney General Opinion that addressed the new workers' compensation law in Tennessee that requires sole proprietors to carry workers' compensation insurance on themselves. (Traditionally, there was an exclusion for sole proprietors.) Just after release of the AG-Opinion, the leadership in the state house and senate came to an agreement to suspend the effective date of the new law.
Over the past month, there have been a number of grass roots campaigns to address this issue. So, where does the law stand now? According to an official bulletin from the Department of Commerce and Insurance Commissioner Leslie Newman (pdf), the statute goes into effect at midnight on December 31, 2009. Although the General Assembly has reported that it will address the issue as soon as they convene on January 12, 2010, the statute as written and enacted is enforceable on January 1, 2010. The most important tip from the Bulletin is about election of coverages:
The Department interprets this change in the law to mean that a sole proprietor, partner, or limited liability company member ("LLC member") who had not previously been required to have coverage on himself must now obtain coverage on himself. . . . The Department wishes to make clear its position that failure of a sole proprietor, partner, or LLC member to obtain such coverage without having met an exemption, is in violation of [the new law] and could subject such person to penalties by the Department of Labor and Workforce Development.
The Bulletin also includes the "Certification of Election" form that must be filed with the Department. I plan on following this issue closely.
Over the past two months, I have received a few inquiries from small business owners about an amendment to Tennessee's workers' compensation laws. The primary question is whether the new law, which takes effect on December 31, 2009, will require a sole proprietor to carry workers' comp insurance on himself? (Traditionally, there was an exclusion for sole proprietorship under Tennessee law.)
