Tennessee Employment Law Update — May 2019


Independent Contractors and 20-Factor Test

On May 10, 2019, Tennessee Governor Bill Lee signed legislation (H.B. 539) amending the following laws to redefine “employee” and requiring the consideration of the Internal Revenue Service (IRS) 20-Factor Test when determining whether a worker is an employee or independent contractor:

  • Code Ann. § 50-2-111 (wage relations — leased-operator or owner-operator of vehicle; common carrier contract).
  • Code Ann. § 50-3-103 (Occupational Safety and Health Act).
  • Code Ann. §§ 50-7-207 and 207(e) (Tennessee Employment Security Law).
  • Code Ann. § 50-9-103 (drug-free workplace programs).

Under each law, an employee is redefined as any individual who performs services for a covered employer for wages if the services performed by the individual qualify as an employer-employee relationship with the covered employer under the 20-factor test in IRS Revenue Ruling 87-41, 1987-1 C.B. 296, or subsequent guidance.

The law is effective January 1, 2020.

Read TN H.B. 539

Private Employers and the Tennessee Healthy Workplace Act

On April 23, 2019, Tennessee Governor Bill Lee signed legislation (H.B. 856) adding private employers to those who are subject to the requirements of the Healthy Workplace Act, which seeks to address abusive conduct in the workforce. The act took effect in 2014 and was designed to:

  • Assist employers in recognizing and responding to abusive conduct in the workplace.
  • Prevent retaliation against any employee who has reported abusive conduct in the workplace.
  • Require that employers implement a workplace policy to address abusive conduct in the workplace.

Under the act, abusive conduct is an act or omission that would cause a reasonable person, based on the severity, nature, and frequency of the conduct, to believe that an employee was subject to an abusive work environment, such as:

  • Repeated verbal abuse in the workplace, including derogatory remarks, insults, and epithets;
  • Verbal, nonverbal, or physical conduct of a threatening, intimidating, or humiliating nature in the workplace; or
  • The sabotage or undermining of an employee’s work performance in the workplace.

The law took effect on April 23, 2019.

Read TN H.B. 856

Vaping Limitations

On April 17, 2019, Tennessee Governor Bill Lee signed legislation (S.B. 26) prohibiting, under the Tennessee Children’s Act for Clean Indoor Air, the use of vapor products or devices in specified locations where children are typically present. The law also:

  • Prohibits smoking, or the use of vapor products, on school grounds after regular school hours; and
  • Expands the distance for which it is unlawful for a person to smoke or use vapor products from within 50 feet to within 100 feet of any entrance to any building of all public and private kindergarten, elementary, and secondary schools.

The law became effective April 17, 2019.

Read TN S.B. 26