By Judge Joshua Davis Baker, Nashville
The word “gig” has been thrown around pretty often in the workers’ compensation universe over the last several years. So what exactly is it?
When I hear the word, I think of the following exchange at any coffee shop or neighborhood bar:
Q: Hey, your band got any gigs coming up?
A: Yeah. Got one at the Basement next Thursday. I’ll put you on the list.
As a fifteen-year Nashville resident, I have overheard this conversation or something similar hundreds of times. To the up-and-coming musician, the gig is that small sliver of golden sunlight breaking through the dark clouds of an otherwise oh-so-ordinary everyday life. It’s that brief hiatus from the less glamorous world of the “side hustle,” which society rather snobbishly refers to as “gainful employment.”
However, in current parlance, the word “gig” means short-term or freelance work. A gig can include anything from IT to elder care, delivering food, providing technical assistance for a software project, pet-sitting, babysitting, photographing a wedding or other event, mowing lawns, grocery shopping . . . and the list goes on. Gig work has now become so mainstream that a growing group of Americans rely on these short-term engagements as their only source of income.
There are few reliable counts of the number of Americans doing gig work. The Federal Reserve estimates as many as seventy-five million persons participate in the gig economy in some way, while Forbes puts the number at fifty-seven million. Whether either number is correct no one knows, but all agree that gig work forms a sizeable piece of the U.S. economy.
This new group of gig workers presents challenges to the current infrastructure. For those who practice in workers’ compensation, this new genre of economic activity poses a practical question: Whom, if anyone, do gig workers work for?
In an attempt to answer this question, the General Assembly passed SB1967/HB1978 last session, and the bill became law on July 1, 2018.
Codified as Tennessee Code Annotated section 50-8-102, the new law addressed employer-employee relationships in circumstances where gig workers use “marketplace platforms.” A marketplace platform is a business offering “an online-enabled application, software, website or system that enables the provision of services by marketplace contractors to third-party individuals or entities seeking services.” A marketplace platform provides a forum for third parties to advertise short-term work opportunities. The people performing the work advertised on the platform are called “marketplace contractors.”
A key aspect of the legislation provides that the marketplace platform cannot “derive” any benefit either directly or through a related party from the work performed by the contractor, but it can collect a fee or subscription cost for the use of the service.
You likely noticed that this prohibition most significantly omits application to popular gig applications like Uber and Lyft, which keep a portion of the proceeds for every ride the users provide. Section 50-8-102 also does not apply to the construction industry.
Concerning all other types of gig work, the law primarily addresses the relationship between the marketplace platform and the marketplace contractor. The law declares that a marketplace contractor is an “independent contractor” and not an employee of the marketplace platform if the contractor enters into a written agreement with the platform that contains the following specific conditions:
- The contractor is an “independent contractor” with respect to the platform;
- The platform does not “unilaterally prescribe specific hours” when the contractor must be available to provide services;
- The contractor may provide/solicit work through other “online-enabled, software, website, or system offered by other marketplace platforms;”
- The contractor may engage an assistant to perform any of the work acquired through the platform;
- The contractor may engage in other occupations or businesses;
- The contractor does not have to use any specific supplies or equipment at the instruction of the platform;
- The platform does not control the manner of work performance but may insist on quality standards;
- Either the contractor or platform may terminate the agreement at any time;
- The platform provides no medical or insurance benefits to the contractor, and the contractor has the responsibility of paying all taxes associated with income derived from work performed; and
- “All, or substantially all payment” to the contractor arises from work performed for third parties.
As most readers will recognize, many of these conditions required as part of the agreement between the contractor and the platform concern characteristics considered when determining whether a person is an employee or an independent contractor.
All this discussion brings us back to the musician. For those of you performing traditional gigs, ROCK ON! And do so with the knowledge that you’re free and independent—as you always have been.
Also, if you don’t mind, please put me on the VIP list.