Tennessee: New WC regulations may burden small contractors, critics say
The legislation, Public Chapter 1041, is scheduled to take effect Dec. 31 and will require all construction subcontractors and independent contractors to carry workers' comp insurance on themselves. Lawmakers said they introduced the regulations because many larger contractors, who are already required to pay for coverage of their employees, have argued that they are often hurt during the bidding process by smaller contractors who claim to be sole proprietors and aren't bound by workers' comp laws. However, officials said that many of these contractors have employees and ask their workers to also declare themselves as sole proprietors to enable the business from avoiding paying for comp coverage.
While the law is aimed at thwarting bad practices and leveling the playing field, the National Federation of Independent Business said its small business members have indicated that the added expense could put them out of business. The group is asking lawmakers to amend the regulations to provide for an opt-out provision, a similar option that is available to corporate officers.
Rep. Judd Matheny, R-Tullahoma, and chairman of the House Consumer and Employee Affairs Committee, recently called a special legislative panel to hear from individuals and groups affected by legislation. Jim Brown, state director of the NFIB, said that some small businesses believe the mandate to be duplicative, since some have occupational injury coverage in certain health insurance policies. Representatives from the Home Builders Association of Tennessee also voiced their concerns and have called for delaying the implementation of the mandate.
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November 30, 2009
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