Senate approves revision in rules for online job contract companies

After a half-hour of debate, the state Senate approved 25-3 Monday night a bill that revises legal restrictions for online “marketplace platform” companies that collect a fee for putting those needing temporary work performed in touch with persons willing to do the job – TaskRabbit, for example.

The bill’s sponsor, Republican Sen. Bo Watson of Hixson, says it’s a business-friendly update to the realities of today’s technology and increasing use of contract services. Critics contend it undermines protections for both workers and those who hire them.

From the Times Free Press report:

“Tennessee has continued to be a leader within the business sector,” Watson told colleagues. “This bill continues that effort, keeping our laws up to date with the incredible growth of the gigabyte economy.”

Watson said current laws “were developed decades ago and they don’t meet the reality of how the workforce now operates and is changing.” The bill, he added, is intended to bring “clarity.”

“We are living in an age that in future generations will be looked back on and seen as transformational” for technology in much the way the industrial age was seen in terms of mechanical advancements, Watson said.

But Senate Minority Leader Lee Harris, D-Memphis, and Senate Democratic Caucus Chairman Jeff Yarbro were skeptical. Harris said if the workers are deemed independent contractors, then companies running marketplace platforms are not legally liable “for what the independent contractor may do.”

He cited examples including a maid service, saying someone “may rob or commit some criminal act in that home,” but the marketplace platform could not be sued. Moreover, Harris argued, traditional businesses facing online competition could be prompted to declare their employees as independent contractors.

…Political newsletter The Tennessee Journal reported Gov. Bill Haslam’s administration is opposed to the legislation. Labor and Workforce Development Commissioner Burns Phillips warned the Senate Commerce and Labor Committee it could undo protections for employees, including minimum wage requirements, health insurance, unemployment insurance and compensation for injured workers.

It could also spur traditional companies to migrate online and make their current workers independent contractors in order to compete, The Journal cited Phillips as saying.

…In presenting the bill, Watson cited several companies were interested in the legislation, including Takl, a Brentwood, Tenn.-based tech startup. Watson said the company was “neutral” on the bill.

Senate Commerce Committee Chairman Jack Johnson, R-Franklin, is an executive of Takl. Johnson, who did not participate in the debate, declared Senate Rule 13, which puts the public on notice that he has an interest in an issue. According to the legislative website, Johnson is a bill cosponsor.

Note: The bill is SB1967 and the official legislative staff summary is HERE. Harris and Yarbro were joined by Sen. Art Swann (R-Maryville) in voting no on the measure, as noted in The Tennessean report. Five senators did not vote. On the House side, the bill – sponsored by Rep. Pat Marsh (R-Shelbyville) is awaiting its first subcommittee vote.