Official Summary Text
This bill enacts the "Voluntary Portable Benefit Plan Act," which does the following:
Authorizes a public or private entity, including an internet or application-based company, to voluntarily contribute funds to a portable benefit plan as a form of compensation to an independent contractor. A "portable benefit plan" means a benefit plan administered by a third-party portable benefit plan provider chosen by a self-employed worker and assigned to a beneficiary rather than an employer or hiring party and includes health insurance, unemployment insurance, disability insurance, life insurance, and retirement benefits.
Authorizes contributions to a portable benefit plan to be made using the funds of a hiring party or a percentage of funds withheld from the compensation owed to an independent contractor as long as (i) withholding such compensation is expressed in a written agreement, (ii) such written agreement is clear, unambiguous, and prominently displayed either in the work contract or a separate notice, (iii) such withholdings are voluntary and require the independent contractor to opt-in, and (iv) the independent contractor may choose to opt-out of such withholdings at any time.
Prohibits contributions to a portable benefit plan from being used as a criterion for determining a worker's employment classification under certain provisions of present law governing employer/employee relations.
MARKETPLACE CONTRACTORS
Present law provides that in return for com
pensation from the third-party or marketplace platform, marketplace contractors offer or provide services to the third-party individuals or entities upon being given an assignment or connection through the marketplace platform's online-enabled application,
software, website, or system. This bill revises this provision to include compensation in the form of a contribution to a portable benefit account as described in this bill.
Present law provides certain conditions that are set forth in a written agree
ment between a marketplace platform and marketplace contractor that renders the marketplace contractor an independent contractor and not an employee of the marketplace platform, including the condition that the marketplace platform provides no medical or
o
ther insurance benefits to the marketplace contractor, and the marketplace contractor is responsible for paying taxes on all income derived as a result of services performed to third parties from the assignments or connections received from the marketplac
e
platform. This bill removes the condition that the market platform provides no medical or other insurance benefits to the marketplace contractor.
ON MARCH 20, 2025, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 1377, AS AMENDED.
AMENDMENT #1
makes the following revisions:
Adds a definition for "benefit plan" to include h
ealth insurance
, i
ncome replacement insurance
, l
ife insurance
, r
etirement benefits
,
and
o
ther benefits that may customarily be provided as part of a benefit plan
.
Changes references from "portable benefit plan" to "portable benefit account," defined as
an account opened by an independent contractor to fund the purchase of one or more benefit plans and that is administered by a third-party portable benefit account provider chosen by the independent contractor and assigned to a beneficiary of one or more benefit plans rather than a hiring party
.
Changes references from "portable benefit plan provider" to "portable benefit account provider," defined as
a bank
as defined in
the Federal Deposit Insurance Act
,
an investment management firm
.
or a technology provider or program manager that offers services through a bank or investment management firm.
Revises the provision that a
uthorizes a public or private entity, including an internet or application-based company, to voluntarily contribute funds to a portable benefit plan as a form of compensation to an independent contractor
, to, instead, authorize a
n individual or entity, including a hiring party, whether public or private, an independent contractor, or an internet or application-based company,
to
voluntarily contribute funds to a portable benefit account for an independent contractor.
Current Bill Text
Read the full stored bill text
HOUSE BILL 494
By Baum
SENATE BILL 1377
By Watson
SB1377
001825
- 1 -
AN ACT to amend Tennessee Code Annotated, Title 50
and Title 65, Chapter 15, Part 3, relative to
employer-employee relationships.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 50, Chapter 1, is amended by adding
the following as a new part:
50-1-1101.
This part is known and may be cited as the "Voluntary Portable Benefit Plan Act."
50-1-1102.
As used in this part:
(1) "Employee" means an individual who performs services for an
employer for wages, and the services performed by the individual qualify as an
employer-employee relationship with the employer based upon consideration of
the twenty-factor test described in § 50-2-111;
(2) "Hiring party" means a person who hires or enters into a contract with
an independent contractor;
(3) "Independent contractor" means an individual who performs services
for a hiring party in exchange for compensation, and the relationship with the
hiring party qualifies the individual as an independent contractor based upon
consideration of the twenty-factor test described in § 50-2-111;
(4) "Portable benefit plan":
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(A) Means a benefit plan administered by a third-party portable
benefit plan provider chosen by a self-employed worker and assigned to a
beneficiary rather than an employer or hiring party; and
(B) Includes:
(i) Health insurance;
(ii) Unemployment insurance;
(iii) Disability insurance;
(iv) Life insurance; and
(v) Retirement benefits; and
(5) "Portable benefit plan provider" means a bank, as defined in Section
3(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. § 1813(a)(1)); an
investment management firm; a technology provider or program manager that
offers services through a bank or investment management firm; or another
person who demonstrates to the satisfaction of the commissioner of financial
institutions that the manner in which such bank or person will administer the
portable benefit account will be consistent with the portable benefit account
requirements under this chapter.
50-1-1103.
(a) A public or private entity, including an internet or application-based company,
may voluntarily contribute funds to a portable benefit plan as a form of compensation to
an independent contractor.
(b) Contributions to a portable benefit plan must not be used as a criterion for
determining a worker's employment classification under chapter 1, 2, 6, 7, or 8 of this
title, or title 65, chapter 15.
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(c) Contributions to a portable benefit plan may be made using the funds of a
hiring party or a percentage of funds withheld from the compensation owed to an
independent contractor, as long as:
(1) Withholding such compensation is expressed in a written agreement;
(2) Such written agreement is clear, unambiguous, and prominently
displayed either in the work contract or a separate notice;
(3) Such withholdings are voluntary and require the independent
contractor to opt-in; and
(4) The independent contractor may choose to opt-out of such
withholdings at any time.
SECTION 2. Tennessee Code Annotated, Section 50-8-101(1)(B), is amended by
deleting the language "In return for compensation from the third-party or marketplace platform,
offers" and substituting "In return for compensation from the third-party or marketplace platform,
including compensation in the form of a contribution to a portable benefit account as described
in § 50-1-1103, offers".
SECTION 3. Tennessee Code Annotated, Section 50-8-102(a)(9), is amended by
deleting the language "marketplace platform provides no medical or other insurance benefits to
the marketplace contractor, and the".
SECTION 4. Tennessee Code Annotated, Section 65-15-301(4), is amended by
deleting the language "control, direct, or manage the personal vehicles" and substituting
"control, direct, or manage, as the applicability of such terms are understood pursuant to § 50-2-
111, the personal vehicles".
SECTION 5. This act takes effect upon becoming a law, the public welfare requiring it.