On May 10, 2019 Governor Bill Lee signed legislation amending the definition of employee in several Tennessee employment laws.  Now consideration of the IRS 20 Factor Test must be made to determine whether a worker is an employee or independent contractor under certain laws.

The amended laws are as follows:

  • Code Ann. § 50-2-111 (wage regulations – leased operator or owner operator of motor vehicle, or common carrier contract).
  • Code Ann. § 50-3-103 (Tennessee Occupational Safety and Health Act).
  • Code Ann. § 50-7-207 and 207(e) (Tennessee Employment Security Law – Unemployment Insurance).
  • Code Ann. § 50-9-103 (Drug-Free Workplace Program).

With this amendment “employee” is now re-defined as an individual who performs services under a covered employer for wages if the services performed by the individual qualify as an employer/employee relationship under the IRS 20 Factor Test, which is set forth in IRS Revenue Ruling 87-41.

The law is effective January 1, 2020.

In light of this change employers should examine their relationships with independent contractors now to determine whether the individual is properly classified as an independent contractor under the amended laws.  Making this analysis and taking any necessary corrective action now could save thousands of dollars in the future, in the event a government agency determines that someone who is classified as an independent contractor is really an employee.

Tagged ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: