If your business has employees in the state of Tennessee, you’ll need to make sure you adhere to Tennessee’s Workers’ Compensation Insurance laws. Workers’ Compensation provides medical and financial benefits for employees who suffer work-related injuries or illnesses or for their survivors in the case of an employee death.

Who needs Workers’ Compensation Insurance in Tennessee?

In Tennessee, any employer with five or more full- or part-time employees must obtain Workers’ Compensation Insurance. However, in the construction and mining industry, employers must obtain Workers’ Compensation Insurance if there is even one employee. In Tennessee, an “employee” is generally defined as any individual who is in the service of an employer under any contract (written or implied) of hire or apprenticeship. 

The Tennessee Workers’ Compensation Act (WCA) defines all of the requirements for Workers’ Comp in Tennessee, and the Tennessee Bureau of Workers’ Compensation (BWC) monitors, enforces, and administers the program. Ensuring your company is in compliance is critical, as there are serious penalties and fines for those who fail to abide by state regulations.

What employees are covered under Workers’ Compensation in Tennessee?

Almost all workers are covered under Workers’ Compensation in Tennessee. If you provide work or services for an employer, and you are not an independent contractor, you will likely be eligible for Workers’ Compensation Insurance.

The following are categories of employees that are eligible for Workers’ Comp coverage:

• Full-time and part-time employees
• Apprentices and interns
• Undocumented workers
• Minors 
• Construction workers 

The following are categories of employees that are generally excluded from Workers’ Comp coverage:

• Independent contractors
• Subcontractors
• Domestic workers 
• Agricultural/farm workers 
• Volunteers
• Casual workers
• Sole proprietors and partners 

What Workers’ Compensation benefits do employees receive?

Under Workers’ Compensation in Tennessee, employers are required to provide the following benefits to employees who are injured in the course of employment:

Medical Benefits

• Employers are required to provide reasonable and necessary medical care to all eligible employees who suffer work-related injuries or illnesses. This includes both medical and surgical treatment, hospitalization fees, dental work, psychological services, prescription glasses, crutches, and medicine. 
• Employers are responsible for providing a list of three medical providers, and the injured employee may select from those pre-approved options. 
• Injured employees can request reimbursement for travel expenses if travel to their medical treatment exceeds 15 miles. 
• Employees may continue to receive covered medical treatment so long as the authorized treating physician approves it. 

Temporary Total Disability Benefits

• If an injured employee is unable to return to work or is partially disabled but the employer cannot accommodate, he or she is eligible to receive Temporary Total Disability (TTD) benefits while recovering, which provides 66 and two-thirds percent of a worker’s average weekly wage pre-injury.
• The Tennessee Workers’ Compensation Rates are adjusted depending on the date of injury. For accidents that occurred from July 1, 2021, to June 30, 2022, the maximum TTD benefit was $1,166 per week, and the minimum benefit amount was $159 per week.
• Benefits begin on the eighth day of the employee’s disability and may continue for up to 60 days after the employee reaches maximum medical improvement (MMI) if their benefit rate is lower than their pre-injury wages. 

Temporary Partial Disability Benefits

• An injured employee’s authorized treating physician may deduce that the employee is able to return to work on light duty while he or she continues to heal. If the employee returns to work in this limited capacity, he or she may be eligible for Temporary Partial Disability (TPD) benefits. 
• The TPD benefit is 66 and two-thirds percent of the difference between the employee’s pre-injury wages and what he or she earns during light duty. 
• The Tennessee Workers’ Compensation Rates are adjusted depending on the date of injury. For accidents that occurred from July 1, 2021, to June 30, 2022,  the maximum TPD benefit was $1,166 per week, and the minimum benefit amount was $159 per week.
• TPD benefits can continue for up to 450 weeks.

Permanent Partial Disability Benefits

• In some cases, an injured employee reaches maximum medical improvement and is able to earn wages, but has sustained permanent disability from the work-related injury or illness. The employee may be eligible for Permanent Partial Disability (PPD) benefits. 
• The authorized treating physician assigns an impairment rating, which will help determine the PPD benefit rate. 
• The PPD benefit is 66 and two-thirds percent of the injured employee’s average weekly wages. This is subject to limitations depending on the specific body part affected by the work-related injury, when the injury took place, and whether the employee can return to his or her prior employment.
• The Tennessee Workers’ Compensation Rates are adjusted depending on the date of injury. For accidents that occurred from July 1, 2021, to June 30, 2022,  the maximum PPD benefit was $1,060 per week, and the minimum benefit amount was $159 per week.
• The compensation period is determined by multiplying 450 weeks times the assigned impairment rating or 180 days after the employee reaches maximum medical improvement, whichever is later.

Permanent Total Disability Benefits

• If an injured employee is unable to earn wages due to a permanent disability from a work-related injury or illness, he or she may be eligible to receive Permanent Total Disability (PTD) benefits. 
• PTD benefits provide 66 and two-thirds percent of the employee’s average weekly wage pre-injury and continue until the injured employee becomes eligible for old-age retirement under the Social Security law.
• If the employee was injured within five years of becoming eligible for full Social Security retirement benefits, the employee’s benefits are limited to 260 weeks. 

Death Benefits

• Employers are required to pay up to $10,000 to cover burial expenses.
• If the deceased employee has no dependents, $20,000 is paid to his or her estate. 
• A surviving spouse with no dependents receives 50 percent of the deceased employee’s average weekly wages, subject to the maximum weekly benefit. 
• A surviving spouse with one or more dependents receives two-thirds of the deceased employee’s average weekly wages, subject to the maximum weekly benefit. 

What are the penalties for breaking Tennessee Workers’ Compensation laws?

Failure to adhere to the Workers’ Compensation laws set out by the WCA can result in significant fines and even imprisonment. In order to avoid any costly penalties, it’s important to consult the WCA or your insurer to ensure you are in compliance. Below are the major ways in which companies can be penalized:

Failure to Maintain Coverage

• Employers who fail to maintain Workers’ Compensation Insurance coverage are subject to financial penalties equal to 1.5 times the employer’s total estimated annual premium. 
• Employers who are noncompliant a second time are subject to financial penalties equal to the employer’s average annual Workers’ Compensation premium. 

Failure to Pay Benefits and Medical Expenses 

• Employers are required to pay disability benefits within 15 days after receiving notice of the injured employee’s disability. Failure to do so will result in a penalty of $50 per day. If the employer does not pay disability benefits within 20 days, they are subject to a financial penalty equal to 25 percent of the unpaid benefit amount. Failure to make ongoing payments will result in a penalty equal to 25 percent of unpaid/late benefits. 
• Employers who fail to pay medical expenses are subject to a $500 penalty. Failure to pay for this expense within 60 days can result in an additional penalty equal to 25 percent of the medical expenses.

Failure to Report and Notify

• Employers must report employee injuries or illnesses to their insurance carriers within one working day of the employer’s knowledge of the injury or illness.
• Employers must notify the BWC when they make initial payments of benefits, if they stop making payments, if they modify the payment amount, and when they make the final payment. Failure to do so may result in penalties ranging from $10 to $50 per day.

Fraud 

• Workers’ Compensation fraud in Tennessee may be punishable as criminal theft and result in both financial penalties and jail time. 
• Fraudulent activity can come in many forms including employers who make their employees pay for their own Workers’ Compensation Insurance coverage through their wages, employers who intentionally misclassify employees as independent contractors, and employers who withhold information from their insurer to receive a lower premium. 

Failure to Provide a Medical Panel

• It is an employer’s responsibility to create a list of at least three physicians that employees can utilize for work-related injuries and illness. 
• This list, also called a medical panel, must be provided within three business days after being notified of the injury or illness. 
• Failure to provide a medical panel could result in a penalty of up to $5,000. 

How much does Workers’ Compensation Insurance cost in Tennessee?

According to the National Academy of Social Insurance Workers’ Compensation Report (November 2020), the average employer cost for Workers’ Compensation in Tennessee was $0.81 per $100 of covered wages. This figure is estimated across all insurers and all industries, so the cost to your particular business may vary.

How does the Workers’ Compensation claims process work in Tennessee?

An employee has 15 days to report a work-related injury through a written notice. Work-related illnesses should be reported within 30 days of experiencing symptoms. If an injury or illness is reported too late, adjustments may be made to protect the employer’s rights, which may include denial of the claim.

Employers must accept the report and notify their insurer within one day of receiving notice from the injured employee. The employer is required to provide a medical panel with at least three physicians within three days of receiving notice. Employers are required to pay disability benefits within 15 days after receiving notice of the injured employee’s disability.

If there are any doubts about the claim, the employer can work with the adjuster to investigate and they have 15 days to deny a claim. An employee has one year to dispute a denial. In the event of a disputed claim, mediation must take place and either a Settlement Agreement or a Dispute Certification Notice is formed. With a Dispute Certification Notice, a hearing can be requested.  

Tennessee Workers’ Compensation Insurance Resources

For more information on Tennessee Workers’ Compensation laws and requirements, please visit the following resources:

• Tennessee Bureau of Workers’ Compensation (BWC)
• Tennessee WCA FAQ for Employers