TN
Tennessee Senate Bill SB1377

Tennessee 2025-2026 Regular Session

Tennessee Senate Bill SB1377 Compare Versions

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5-J e/Ule&S(!,e, Senate
6-PUBLIC CHAPTER NO. 131
7-SENATE BILL NO. 1377
8-By Watson, Yager, Stevens, Bailey, Massey, Lowe, Reeves, Taylor
9-Substituted for: House Bill No. 494
10-By Baum, Terry, Sparks, Fritts, Rudd, Helton-Haynes, Stevens, Burkhart, Eldridge, Cepicky, Lafferty
11-AN ACT to amend Tennessee Code Annotated, Title 50 and Title 65, Chapter 15, Part 3, relative to
1+
2+HOUSE BILL 494
3+ By Baum
4+
5+SENATE BILL 1377
6+By Watson
7+
8+
9+SB1377
10+001825
11+- 1 -
12+
13+AN ACT to amend Tennessee Code Annotated, Title 50
14+and Title 65, Chapter 15, Part 3, relative to
1215 employer-employee relationships.
16+
1317 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
14-SECTION 1. Tennessee Code Annotated, Title 50, Chapter 1, is amended by adding the
15-following as a new part:
18+ SECTION 1. Tennessee Code Annotated, Title 50, Chapter 1, is amended by adding
19+the following as a new part:
1620 50-1-1101.
17-This part is known and may be cited as the "Voluntary Portable Benefit Act."
21+ This part is known and may be cited as the "Voluntary Portable Benefit Plan Act."
1822 50-1-1102.
1923 As used in this part:
20-(1) "Benefit plan" includes:
21-(A) Health insurance;
22-(B) Income replacement insurance;
23-(C) Life insurance;
24-(D) Retirement benefits; and
25-(E) Other benefits that may customarily be provided as part of a benefit
26-plan;
27-(2) "Employee" means an individual who performs services for an employer
28-for wages, and the services performed by the individual qualify as an employer­
29-employee relationship with the employer based •. upon consideration of the twenty­
30-factor test described in § 50-2-111;
31-(3) "Hiring party" means a person who hires or enters into a contract with an
32-independent contractor;
33-(4) "Independent contractor" means an individual who performs services for a
34-hiring party in exchange for compensation, and the relationship with the hiring party
35-qualifies the individual as an independent contractor based upon consideration of the
36-twenty-factor test described in § 50-2-111;
37-(5) "Portable benefit account" means an account opened by an independent
38-contractor to fund the purchase of one (1) or more benefit plans and that is
39-administered by a third-party portable benefit account provider chosen by the
40-independent contractor and assigned to a beneficiary of one (1) or more benefit plans
41-rather than a hiring party; and SB 1377
42-(6) "Portable benefit account provider" means a bank, as defined in Section
43-3(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. § 1813(a)(1 )); an investment
44-management firm; or a technology provider or program manager that offers services
45-through a bank or investment management firm.
24+ (1) "Employee" means an individual who performs services for an
25+employer for wages, and the services performed by the individual qualify as an
26+employer-employee relationship with the employer based upon consideration of
27+the twenty-factor test described in § 50-2-111;
28+ (2) "Hiring party" means a person who hires or enters into a contract with
29+an independent contractor;
30+ (3) "Independent contractor" means an individual who performs services
31+for a hiring party in exchange for compensation, and the relationship with the
32+hiring party qualifies the individual as an independent contractor based upon
33+consideration of the twenty-factor test described in § 50-2-111;
34+ (4) "Portable benefit plan":
35+
36+
37+ - 2 - 001825
38+
39+ (A) Means a benefit plan administered by a third-party portable
40+benefit plan provider chosen by a self-employed worker and assigned to a
41+beneficiary rather than an employer or hiring party; and
42+ (B) Includes:
43+ (i) Health insurance;
44+ (ii) Unemployment insurance;
45+ (iii) Disability insurance;
46+ (iv) Life insurance; and
47+ (v) Retirement benefits; and
48+ (5) "Portable benefit plan provider" means a bank, as defined in Section
49+3(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. § 1813(a)(1)); an
50+investment management firm; a technology provider or program manager that
51+offers services through a bank or investment management firm; or another
52+person who demonstrates to the satisfaction of the commissioner of financial
53+institutions that the manner in which such bank or person will administer the
54+portable benefit account will be consistent with the portable benefit account
55+requirements under this chapter.
4656 50-1-1103.
47-(a) An individual or entity, including a hiring party, whether public or private, an
48-independent contractor, or an internet or application-based company, may voluntarily
49-contribute funds to a portable benefit account for an independent contractor.
50-(b) Contributions to a portable benefit account must not be used as a criterion for
51-determining a worker's employment classification under this title, or title 65, chapter 15.
52-(c) Contributions to a portable benefit account may be made using the funds of a
57+ (a) A public or private entity, including an internet or application-based company,
58+may voluntarily contribute funds to a portable benefit plan as a form of compensation to
59+an independent contractor.
60+ (b) Contributions to a portable benefit plan must not be used as a criterion for
61+determining a worker's employment classification under chapter 1, 2, 6, 7, or 8 of this
62+title, or title 65, chapter 15.
63+
64+
65+ - 3 - 001825
66+
67+ (c) Contributions to a portable benefit plan may be made using the funds of a
5368 hiring party or a percentage of funds withheld from the compensation owed to an
5469 independent contractor, as long as:
5570 (1) Withholding such compensation is expressed in a written agreement;
56-(2) Such written agreement is clear, unambiguous, and prominently displayed
57-either in the work contract or a separate notice;
58-(3) Such withholdings are voluntary and require the independent contractor to
59-opt-in; and
60-(4) The independent contractor may choose to opt-out of such withholdings at
61-any time.
62-SECTION 2. Tennessee Code Annotated, Section 50-8-101 (1 )(8), is amended by deleting
63-the language "In return for compensation from the third-party or marketplace platform, offers" and
64-substituting "In return for compensation from the third-party or marketplace platform, including
65-compensation in the form of a contribution to a portable benefit account as described in§ 50-1-1103,
66-offers".
67-SECTION 3. Tennessee Code Annotated, Section 50-8-102(a)(9), is amended by deleting
68-the language "marketplace platform provides no medical or other insurance benefits to the
69-marketplace contractor, and the".
70-SECTION 4. Tennessee Code Annotated, Section 65-15-301(4), is amended by deleting the
71-language "control, direct, or manage the personal vehicles" and substituting "control, direct, or
72-manage, as the applicability of such terms are understood pursuant to § 50-2-111, the personal
73-vehicles".
71+ (2) Such written agreement is clear, unambiguous, and prominently
72+displayed either in the work contract or a separate notice;
73+ (3) Such withholdings are voluntary and require the independent
74+contractor to opt-in; and
75+ (4) The independent contractor may choose to opt-out of such
76+withholdings at any time.
77+ SECTION 2. Tennessee Code Annotated, Section 50-8-101(1)(B), is amended by
78+deleting the language "In return for compensation from the third-party or marketplace platform,
79+offers" and substituting "In return for compensation from the third-party or marketplace platform,
80+including compensation in the form of a contribution to a portable benefit account as described
81+in § 50-1-1103, offers".
82+ SECTION 3. Tennessee Code Annotated, Section 50-8-102(a)(9), is amended by
83+deleting the language "marketplace platform provides no medical or other insurance benefits to
84+the marketplace contractor, and the".
85+ SECTION 4. Tennessee Code Annotated, Section 65-15-301(4), is amended by
86+deleting the language "control, direct, or manage the personal vehicles" and substituting
87+"control, direct, or manage, as the applicability of such terms are understood pursuant to § 50-2-
88+111, the personal vehicles".
7489 SECTION 5. This act takes effect upon becoming a law, the public welfare requiring it.
75-2 PASSED:
76-SENATE BILL NO. 1377
77-March 20, 2025
78-q ~...__ ~,~~ ...
79-' ™ RANOV McNALL Y
80-SPEAKER OF THE SENATE
81-CAMER8tlt'!EXTON,SPEAKER
82-HOUSE OF REPRESENTATIVES
83-~r' [J, I APPROVED this ___ day otp(I ) 2025
84-H+u lu~
85-BILL LEE, GOVERNOR