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PUBLIC CHAPTER NO. 131
SENATE BILL NO. 1377
By Watson, Yager, Stevens, Bailey, Massey, Lowe, Reeves, Taylor
Substituted for: House Bill No. 494
By Baum, Terry, Sparks, Fritts, Rudd, Helton-Haynes, Stevens, Burkhart, Eldridge, Cepicky, Lafferty
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 Act."
50-1-1102.
As used in this part:
(1) "Benefit plan" includes:
(A) Health insurance;
(B) Income replacement insurance;
(C) Life insurance;
(D) Retirement benefits; and
(E) Other benefits that may customarily be provided as part of a benefit
plan;
(2) "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;
(3) "Hiring party" means a person who hires or enters into a contract with an
independent contractor;
(4) "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;
(5) "Portable benefit account" means an account opened by an independent
contractor to fund the purchase of one (1) 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 (1) or more benefit plans
rather than a hiring party; and SB 1377
(6) "Portable benefit account 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; or a technology provider or program manager that offers services
through a bank or investment management firm.
50-1-1103.
(a) An individual or entity, including a hiring party, whether public or private, an
independent contractor, or an internet or application-based company, may voluntarily
contribute funds to a portable benefit account for an independent contractor.
(b) Contributions to a portable benefit account must not be used as a criterion for
determining a worker's employment classification under this title, or title 65, chapter 15.
(c) Contributions to a portable benefit account 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 )(8), 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.
2 PASSED:
SENATE BILL NO. 1377
March 20, 2025
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' ™ RANOV McNALL Y
SPEAKER OF THE SENATE
CAMER8tlt'!EXTON,SPEAKER
HOUSE OF REPRESENTATIVES
~r' [J, I APPROVED this ___ day otp(I ) 2025
H+u lu~
BILL LEE, GOVERNOR