Pushed by platform Handy, legislation is drawing national criticism

The House Consumer and Human Resources Committee advanced legislation on Wednesday that is drawing criticism from national workers' rights advocates.

HB 1978 has already passed the Senate and is likely to pass the full House, given the pro-business Republican supermajority, but some groups are still trying to raise concerns about the legislation.

According to CNN, the legislation is being pushed in eight states by the online platform Handy, which connects people with house cleaners and handymen, offering services from plumbing to IKEA furniture assembly. (Handy is currently only available in Nashville, not elsewhere in Tennessee.) As the news outlet reports:

[The bill] would permanently classify most gig workers as independent contractors. ... Defining gig workers as independent contractors will give platform companies the certainty that their business model will hold up to legal scrutiny, Handy argues. ... Currently, the distinction between a contractor and an employee hinges on the idea of control. Telling a worker when and how to perform a job, providing training or supplies, monitoring their activity and determining the rate of pay are all factors that would support a finding that the worker is an employee. The laws Handy is trying to get passed by the states would enable employers to do many of those things without having to call the worker an employee. That frees them from having to pay workers' compensation premiums and unemployment taxes or obeying state anti-discrimination and minimum wage laws. They'll likely be off the hook for federal labor standards and Medicare and Social Security taxes as well, since federal enforcement is sparse. ... The bills have been particularly alarming for the National Domestic Workers Alliance, a national nonprofit advocacy group. Palak Shah, the organization's director of social innovations, recently went to Tennessee to caution lawmakers that the bill would permanently carve many workers out of rights to which they would be entitled as employees. "It's just such a sorry excuse for a business model to make vulnerable workers more vulnerable just so you can tell your investors that one day you might be solvent," Shah said. "This legislation basically ensures that domestic workers online will never have protection."

House sponsor Rep. Pat Marsh (R-Shelbyville) said most people working for gig economy platforms are doing so part-time and aren't expecting and don't need the protections offered to standard full-time employees.

"We already have people who go out and do yard work on their own," Marsha said. "If they get on a platform it gives them access to more customers."

What Marsh did not say is those platforms take a cut from their workers, unlike a self-employed gardener, along with possible additional fees. And unlike a plumber who's a full-time employee with a company, gig workers have to cover their own costs like equipment, transportation, insurance and self-employment taxes.

But it isn't just labor advocates who are concerned with the bill. Owners of small companies have said they fear the laxer regulations will drive down wages, ultimately forcing them to subcontract to compete — a concern Rep. Dwayne Thompson raised, comparing platforms like Handy and TaskRabbit to Walmart's effect on businesses in a small town. Thompson was the only vote against the legislation.

One of the other platforms with an interest in the legislation passing is Brentwood-based Takl, which counts Senate Commerce Committee Chairman Jack Johnson (R-Franklin) as an executive. Johnson co-sponsored the bill in the Senate.

Gov. Bill Haslam's administration was opposed to the version that passed the Senate, but a state Department of Labor official told the House committee that the amended version has addressed some of their concerns. Haslam spokesperson Jennifer Donnals said the governor "is deferred to the will of the legislature on this bill as amended."

The main Senate sponsor, Sen. Bo Watson (R-Hixson), has not seen the amended wording, said his aide Tres Whittum, but is fine in "principle" with the changes.

A vote before the full House could come next week, unless a flurry of last-minute activism derails the vote for a spell.