Tennessee Code Title 50. Employer and Employee § 50-6-412

(1) Who is required by this chapter to secure or maintain insurance, fails to secure or maintain the payment of workers' compensation insurance coverage; or

(2) Misclassifies employees to avoid proper classification for premium calculations by:

(b)(1) The bureau shall assess against an employer who has failed to comply with subdivision (a)(1) or (a)(2) a penalty equal to one and one-half (1 1/2 ) times the accurate average yearly workers' compensation premium, or, if the employer is engaged in the construction industry, as defined in § 50-6-901, the greater of one thousand dollars ($1,000) or one and one-half (1 1/2 ) times the accurate average yearly workers' compensation premium when applying appropriate assigned risk rates to the employer's payroll, minus the premium dollars paid, if any, during a period of violation.

(2) If the employer fails to secure the payment of workers' compensation insurance coverage as ordered by the administrator or the administrator's designee within the required time as set forth by the decision, then the bureau shall assess a second penalty, immediately due and payable, equal to the greater of one thousand dollars ($1,000) or an amount equal to the accurate average yearly workers' compensation premium. The bureau shall hold the second penalty in abeyance if coverage is timely obtained pursuant to the order.

(3) If the administrator or the administrator's designee determines the period of noncompliance is less than twelve (12) consecutive months, then the administrator or the administrator's designee shall prorate any assessed monetary penalty; however, the monetary penalty shall not be less than an amount equal to one (1) month's premium or, in the case of construction services providers, not less than one thousand dollars ($1,000).

(c)(1) If the bureau's investigation of an employer reasonably indicates that the employer is subject to this chapter and has failed to comply with the insurance requirements of this chapter, then the bureau shall so notify the employer by certified letter advising the employer of monetary penalties that may be assessed.

(2) The employer shall provide to the bureau, within ten (10) calendar days of the receipt of the certified letter:

(3) If the bureau determines that sufficient proof is not provided, then the administrator or the administrator's designee shall issue a decision ordering the employer to secure payment of workers' compensation insurance coverage and assessing the penalties as described in subsection (b) by certified mail to the employer's last known address.

(j)(1) The administrator or the administrator's designee has the authority to seek an injunction in the chancery court of Davidson County to prohibit an employer from operating its business until the employer has complied with an order by the administrator or the administrator's designee to comply with the insurance requirements of this chapter.

(2) The employer may appeal, pursuant to the Uniform Administrative Procedures Act, compiled at title 4, chapter 5, a decision made, or order issued, by the administrator or the administrator's designee pursuant to this section.

(k)(1) As used in this section, “successor in interest” means a successor in ownership of any part of a business or enterprise that is carried on and controlled in substantially the same manner as the penalized employer.

(2) A penalty issued under this section must follow an owner of a business, or member of an LLC, that is closed, liquidated, or dissolved, when that owner or member owns or operates any part of a subsequent business that is carried on and controlled in substantially the same manner as the penalized employer.

(3) A successor in interest is liable for a penalty assessed under this section against that employer.

(4) A penalized owner, general contractor, company, corporation, or member of an LLC, or a successor in interest, may appeal a penalty assessment by requesting a contested case hearing pursuant to subsection (d).

(5) The administrator or the administrator's designee may waive a penalty against a penalized owner, general contractor, company, corporation, or member of an LLC, or successor in interest, for good cause.