Bailey & Greer PLLC

Tennessee Workers Compensation: What is the difference between an "employee" and "independent contractor," and why does it matter?

Why does the distinction between "employee" and "independent contractor" matter? The main reason is that Tennessee Workers Compensation law only covers "employees." On the other hand, state law provides no coverage for "independent contractors." 

Often, a Tennessee court is asked to determine if someone is an "employee" or an "independent contractor" for purposes of establishing whether workers compensation applies to a person's workplace injury. The court will consider such factors as how a person is paid, who controls the workplace, who has the authority to hire helpers, who furnishes tools, who schedules hours, and the level of workplace freedom that the person has. In a general sense, the less control a person has over their employment conditions the more likely it is that they will be found to be an "employee," and therefore covered by workers compensation. By contrast, the more freedom and control a person has over their employment conditions the more likely it is that they will be found to be an "independent contractor," and outside the scope of workers compensation coverage. 

This consideration can also be important when a person is injured while working for a small business. This is because Tennessee law only provides workers compensation coverage for businesses that have five (5) or more employees. In fact, a business must have at least five (5) "employees" to even be considered an "employer" under Tennessee workers compensation law. If a person works for a small company and is injured, their injury may not be covered unless it can be shown that the business had five (5) "employees," not counting "independent contractors." 

It can be helpful for your peace of mind to know where you stand with regard to these distinctions. If you have any questions as to whether you qualify as an "employee," or whether your workplace has the requisite number of "employees" to qualify for workers compensation coverage, please call the experienced Memphis, Tennessee workers compensation attorneys at Bailey & Greer for a free consultation.