A Tennessee contractor's workers' compensation policy lapses for 15 days. The contractor has 8 employees and continues working. What is the potential penalty per employee per day?
Correct Answer
C) $250
Tennessee imposes a penalty of $250 per employee per day for operating without required workers' compensation coverage.
Why This Is the Correct Answer
Tennessee law (TCA 50-6-405) imposes a civil penalty of $250 per employee per day for employers who operate without required workers' compensation coverage. This per-employee, per-day structure creates a rapidly escalating financial consequence — with 8 employees over 15 days the total exposure would be $30,000.
Why the Other Options Are Wrong
Option A: $50
$50 per employee per day is far below the statutory penalty. Tennessee's $250 rate reflects the legislature's intent to make non-compliance economically untenable.
Option B: $500
$500 is the deductible amount used in some workers' comp policy questions and may appear as a distractor. It is not the per-employee per-day penalty rate.
Option D: $100
$100 per employee per day is below the statutory amount. The correct Tennessee figure is $250.
Memory Technique
Lapsed workers' comp = $250 fine × employees × days. Visualize a $250 bill pinned to each employee's hard hat for every day they work without coverage. Eight workers for 15 days = $30,000 in fines.
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Under Tennessee lien law, which party has priority when multiple liens are filed against the same property?
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A homeowner in Nashville hires an unlicensed contractor for $8,000 worth of electrical work. The contractor demands payment but the work fails inspection. Under TCA 62-6, what recourse does the unlicensed contractor have?
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