Following on my earlier post … nevermind.  Leadership of the Tennessee House and Senate recently reached a bipartisan agreement to immediately introduce legislation in January 2010 to suspend the effective date of Public Chapter 1041 from January 1, 2010 to February 28, 2011.  As reported last week, the new law was enacted to require a sole proprietor to carry workers’ compensation insurance on himself.  The effect of the new ruling was addressed in Tennessee Attorney General Opinion 09-173 (pdf). 

In a statement, Representative Judd Matheny, Chairman of the House Consumer and Employee Affairs Committee alluded that timing was an issue:

 “Although there are merits in this legislation which need to be addressed, its effective date could not come at a worse time for the portions of the industry affected or the already fragile economy.”

Matheny is sponsoring HB 1839 along with Representative Joe Pitts to immediately suspend the effective date of PC 1041 until February 28, 2011.

According to House and Senate Leadership, a suspension of PC 1041’s implementation until February 28, 2011 is the first of two steps in reconsidering the issue of the sole proprietor and workers’ compensation in the construction industry. The second step would be considering alternative ways to address gaps in coverage for workers in companies of all sizes in the various construction fields. Recommendations for alternatives have been collected from consumers and affected industries and are being looked at closely. No action on implementing any alternatives is expected until February 28, 2011 at the earliest.

This action should assist sole proprietorships for the time being.  However, unless the move is taken immediately at the start of the January 2010 session, there will still be some period where the new law will be in effect which requires workers’ compensation coverage.