Slippery Tactics Could Leave Construction Workers Uninsured

In Tennessee, general contractors are taking advantage of lax oversight to increasingly avoid liability when a construction worker is hurt or killed on the job. Areas such as Nashville and Memphis are experiencing a housing boom that’s fueling the problem, especially as a tight labor market creates loopholes for big and small construction companies.  

The sad truth is the average construction worker may never see a dime were he or she die on the job. A recently published report states “Some contractors erect legal hurdles that leave regulators and families … with little recourse. Many companies pay construction workers as independent contractors, instead of as employees, so they can sidestep insurance and tax requirements.”

This tactic is emboldened by an exploding construction market with little oversight by the Tennessee Occupational Safety and Health Administration (TOSHA) and easy access to uniformed workers. In recent years, unannounced, random construction site inspections by TOSHA inspectors have dropped off dramatically throughout the stat. Additionally, many of these workers are new immigrants unfamiliar with the federal laws protecting their families should an accident occur in the workplace.

General contractors are increasingly turning to subcontractors to finish jobs. These subcontractors, in turn, hire “subs of subs,” small one and two person operations that carry no insurance and whose single employee is unaware their life are not protected by workman’s compensation insurance. Classified as an independent contractor by all parties involved, they are, essentially, “off the books.”

It’s important to realize that there are options when a worker is an independent contractor or possibly workers’ compensation doesn’t cover all expenses—just some of the topics covered in one of our recent blogs you can read here. Remember that, in Tennessee, all employers in the construction industry are required to carry workers compensation insurance—regardless of the size of the company. Typically, an employee can expect to have their medical bills covered and receive either temporary or permanent disability benefits should they be injured on the job. If they are killed, their funeral expenses are covered up to a specific amount.

However, as Fran Ansley, a retired University of Tennessee law professor explained, “If there’s a guy with a pickup truck and his one employee, he can disappear into the vapor,” said “There is always somebody up the food chain. Figuring out ways to make them responsible is really important.”