In Tennessee, gig workers like rideshare drivers or delivery personnel are often classified as independent contractors rather than employees under state law, particularly for marketplace platforms. This distinction hinges on factors like control over work, flexibility in hours, and payment structures. Misclassification risks penalties for platforms, but specific protections favor contractor status in the gig economy.
Key Legislation
Tennessee’s HB 1978, enacted in 2018, defines “marketplace contractors” on digital platforms as independent contractors if a written agreement exists and conditions are met, such as no prescribed hours or equipment mandates. This law excludes ride-sharing but aligns with broader trends shielding gig companies.​
Classification Tests
Since 2020, Tennessee uses a 20-factor IRS test (from Revenue Ruling 87-41) for wage, hour, safety, and unemployment laws, replacing the stricter ABC test. Factors include behavioral control (e.g., no specific instructions), financial control (e.g., worker bears costs), and relationship type (e.g., no benefits provided).​
Gig-Specific Factors
Platforms cannot restrict workers from other apps, dictate methods beyond quality standards, or provide insurance—payment must tie to third-party services. Gig workers handle their own taxes and lack employee protections like workers’ comp (required for employees in most cases).​
Risks and Exceptions
Construction, trucking, and some gig roles face scrutiny for misclassification via audits or data analytics. Courts may reclassify based on “economic reality,” especially if control resembles employment.​
