Independent Contractors & Workers' Comp in Tennessee

This is general information, not legal advice. A Tennessee workers’ compensation attorney can help with your specific situation.

One of the most common disputes in Tennessee workers’ compensation is whether an injured worker was an employee or an independent contractor at the time of the injury. The distinction is significant: employees are generally entitled to full workers’ comp benefits; independent contractors are generally not.

The default rule: independent contractors are excluded

Tennessee’s Workers’ Compensation Act (T.C.A. § 50-6-101 et seq.) covers employees but, by default, does not cover independent contractors. If a business correctly classifies a worker as an independent contractor and the Bureau agrees, that worker cannot collect workers’ comp benefits for a work-related injury.

However, the label on the contract does not control. What matters is the substance of the working relationship.

The 7-factor test under T.C.A. § 50-6-102(10)(D)

The Bureau of Workers’ Compensation applies a 7-factor test to determine whether a worker was a true independent contractor or a misclassified employee. The factors include:

1. Right to control the work — Does the hiring party control not just what is done but how it is done? Control over the manner and means of work points toward employee status.
2. Who supplies tools and equipment — An employer who provides the tools, vehicles, and workspace exercises a degree of control consistent with employment.
3. Distinct occupation or business — Is the worker operating an independently established trade or business, with their own clients and risk of profit or loss?
4. Skill required — Work requiring specialized skills that the worker brings to the engagement independently suggests contractor status; work requiring no special skill that the hiring party supervises suggests employment.
5. Method of payment — Payment by the job or project suggests contractor status; payment by the hour or week suggests employment.
6. Whether the work is part of the hiring party’s regular business — If the work being performed is the same as the hiring party’s core business, courts are more likely to find employee status.
7. Intent of the parties — A written independent contractor agreement is relevant but not controlling. The Bureau and courts look at the actual conduct of the parties, not just the paperwork.

No single factor is decisive. The Bureau weighs all seven together.

Misclassification: what it means for injured workers

Employers sometimes classify workers as independent contractors to reduce payroll costs and avoid workers’ comp obligations. If you were injured and believe you were misclassified, you can challenge the classification before the Bureau of Workers’ Compensation.

If the Bureau or the Court of Workers’ Compensation Claims determines you were actually an employee, you may be entitled to:

• Authorized medical care through an Authorized Treating Physician (ATP)
• Temporary Total Disability (TTD) benefits at 66⅔% of your average weekly wage
• Permanent Partial Disability (PPD) or Permanent Total Disability (PTD) benefits if applicable

The employer who misclassified you — and potentially its insurer — can be held responsible for the full value of those benefits.

Special considerations in construction

Tennessee’s workers’ comp rules are stricter in the construction industry: all construction employers must cover workers regardless of the size of the workforce (T.C.A. § 50-6-902). If you work in construction and were injured, coverage obligations are broader, and the misclassification issue arises frequently when general contractors use subcontractors whose workers lack coverage of their own.

What to do if you were injured as a contractor

If you were injured while working as an independent contractor and believe you may have been misclassified, contact the Bureau of Workers’ Compensation at (800) 332-2667 or speak with a Tennessee workers’ comp attorney. The deadline to file a Petition for Benefit Determination is 1 year from the injury or last benefit/treatment date (T.C.A. § 50-6-203) — do not wait.

For the full claims process, see Filing a Workers’ Comp Claim in Tennessee. To speak with a Tennessee workers’ comp attorney, get help now.