The Insights Association helped Arkansas, Oklahoma, and Tennessee approve changes this year harmonizing their treatment of independent contractors, including respondents who receive incentives for their participation in research studies.
Arkansas H.B. 1850
The Arkansas Empower Independent Contractors Act (H.B. 1850) was signed into law by the governor on April 16, 2019, as Act 1055. The new law replaced the state's problematic "ABC" factor test currently in use to determine status with the IRS' 20-factor "common law" test, which is significantly easier to satisfy for a research company-research participant relationship.
Oklahoma H.B. 1095
The Oklahoma Empower Independent Contractors Act (H.B. 1095) was signed into law by the governor on May 13, 2019. H.B. 1095 replaced the state’s problematic “ABC” factor test used to determine status for purposes of state unemployment with the IRS 20-factor “common law” test.
Tennessee H.B. 539
Tennessee H.B. 539 was signed into law by the governor on May 10, 2019 as Pub. Ch. 337. H.B. 539 replaced the problematic “ABC” factor test used to determine status for purposes of state unemployment, worker's compensation, and wage and hour laws with the IRS 20-factor “common law” test.
The benefits of harmonization for the respondent-researcher relationship
The "ABC test" with which we struggled previously in Arkansas, Oklahoma and Tennessee is called that because it is usually stated in three paragraphs of the law, all three of which must be satisfied in order for the worker to be treated as an independent contractor. ABC tests are usually difficult to pass for marketing research participants receiving incentives. The common law test, however, is more amenable to research company - research participant relationships, making it much more likely that government agencies will correctly deem research participants to be independent contractors when receiving incentive payments for their participation in studies.
While it might appear obvious that marketing research participants are not employees, insights firms face troubling challenges to that nonemployee status by government agencies. The cost of defending against these challenges and the uncertainty they create has a material negative effect on the marketing research and data analytics industry. It also threatens the integrity of the research process and the insights that people, companies and the government rely upon every day to be able to learn and understand consumer attitude, behavior and opinion.
That is why the Insights Association advocated for the passage of Arkansas H.B. 1850, Oklahoma H.B. 1095, and Tennessee H.B. 539.
It is also why we supported West Virginia H.B. 2365, which unfortunately failed this year, advocated against California A.B. 5, which unfortunately passed, and continue to lobby for the federal Modern Worker Empowerment Act and against the federal Protecting the Right to Organize Act (PRO Act).
For more information on independent contractors in the marketing research and analytics industry, see: