If your only staff in Tennessee are part-time or seasonal, they still count toward the five-employee rule. Tennessee counts part-time, seasonal, and temporary workers the same as full-timers, so a non-construction business is mandated once it regularly employs five or more people of any kind, and keeping people part-time does not get you out of it. In construction the count does not even matter, since coverage is required from the first worker.
Who this is for: Tennessee owners whose staff are all part-time, seasonal, or temporary, such as retail shops, cafes, and seasonal service businesses.
The short version
- Part-time, seasonal, and temporary workers all count toward the five in Tennessee.
- A non-construction business is mandated once it regularly employs five or more people, part-time included.
- There is no exception for a business that is only open part of the year.
- Construction and coal ignore the count and require coverage from the first worker or first employee.
- Your premium is based on actual payroll, so a small part-time crew usually means a smaller premium, not no policy.
Why part-time still counts
Tennessee's five-employee trigger counts people, not hours. An employee is an employee whether they work 40 hours a week or 4, so a part-time cashier or a seasonal helper counts toward the five exactly like a full-timer. The state's own guidance confirms that part-time employees are included in the five-employee requirement. There is also no exception for a seasonal business that only operates a few months a year: during the months you regularly employ five or more people, you need coverage. The only owners who sit outside the count are sole proprietors, partners, and LLC members.
| Worker | Counts toward the five? | Notes |
|---|---|---|
| Part-time employee | Yes | No minimum hours; counts like a full-timer |
| Seasonal or holiday worker | Yes | Counts during the months they work |
| Temporary or on-call worker | Yes | Still an employee for the count |
| Owner (sole proprietor, partner, LLC member) | No | Outside the count unless they opt in |
| Any worker in construction | Count does not apply | Coverage required from the first worker |
What it costs for a small crew
The good news is that a part-time crew usually costs less to insure, not the same as a full staff. Workers comp is priced on your actual payroll, so a shop with five part-timers pays on that smaller payroll, and many carriers audit at year end and adjust if your hours ran lower than expected. That means once you cross the five-employee line, the answer is not to cut staff or skip coverage; it is to buy a policy sized to the payroll you actually run.
Why skipping it backfires
Treating part-timers as too small to insure is a costly bet once you reach five of them. If a seasonal hire is hurt and you have no policy, Tennessee can charge a penalty of about 1.5 times a year of premium, an injured worker can pursue you directly, and a state fund can pay the worker and then bill you back. For a small retailer or cafe, one uninsured injury can cost far more than a season of premium.
A Jackson example
Illustrative, not a quote. A Jackson gift shop runs on two part-time clerks for most of the year and adds three seasonal hires for the holidays. The owner assumed part-timers did not count, but in Tennessee they do, so once the three seasonal hires bring her to five people she must carry a policy for the busy months. Her premium is based on the actual part-time and seasonal payroll, so it stays modest, and when a holiday hire slips on a wet floor the claim is covered. See our workers comp for retail stores page.
Real questions Tennessee owners ask
Do I need workers comp if all my staff are part-time in Tennessee?
Once five or more of them regularly work for you, yes. Tennessee counts part-time workers toward the five-employee rule the same as full-timers, so keeping people part-time does not get a normal business out of coverage.
Do part-time workers really count toward the five?
Yes. Tennessee's own guidance confirms that part-time employees are included in the five-employee requirement. Hours do not change the count, so five part-timers trigger the mandate just like five full-timers.
Do seasonal or holiday workers count?
Yes. Seasonal and holiday workers are employees for the months they work, so they count toward the five during that period. Being open only part of the year does not exempt you.
We only operate a few months a year. Do we still need it?
If you regularly employ five or more during those months, yes. Tennessee has no seasonal-business exemption, so a policy is required whenever your headcount, part-time included, reaches five in a non-construction business.
Will a part-time crew cost as much as full-time coverage?
Usually not. Workers comp is priced on actual payroll, so a small part-time crew generally means a smaller premium. Many carriers also adjust at a year-end audit if your hours ran low.
Does the owner count toward the five with part-time staff?
The owner is handled by business type. A sole proprietor, partner, or LLC member is outside the count, while a paid corporate officer counts. Your part-time employees count regardless once they reach five.
What happens if I skip coverage for part-timers?
Once you are at five, Tennessee can charge about 1.5 times a year of premium, let an injured worker pursue you, and have a state fund bill you back. For a small shop, one uninsured injury can cost more than years of premium.
Why Tennessee owners choose Morrow
- We shop the right market for you. In Tennessee you buy workers' comp on the open, competitive market from any private insurer licensed in the state, because there is no state fund, and if no insurer will take you the NCCI-run Tennessee Workers Compensation Insurance Plan is the guaranteed backstop, so we can shop your rate freely and still have a fallback for hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Tennessee guides
Every Tennessee business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Tennessee (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Hiring your first employee: what changes
- What workers comp does not cover
- Tennessee retail workers comp
This guide is general information, not legal advice. Tennessee rules and penalty amounts can change, so verify current requirements with the Tennessee Bureau of Workers' Compensation or a licensed advisor before you rely on them. Last updated: July 2026.