Tag Archives: Minnesota

11.10.25
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New Test May Sting Companies with Independent Contractors in Minnesota

Me in Minnesota in 2024, after running around a lake with a name I can’t pronounce

Here are a few fun facts about Minnesota:

  • The official state beverage is milk
  • The official state bee is the rusty patched bumblebee
  • The official state muffin is blueberry

Who knew the blueberry muffin lobby held such sway?

A less fun facts about Minnesota is that the state has made it really hard to be an independent contractor in the construction industry.

In 2024, the state legislature amended its independent contractor classification law to impose a 14-part test. In reality, it’s a 27-part test because some of the parts have mandatory subparts.

If you’re trying to engage an independent contractor in the construction industry in Minnesota, be extra careful. Construction includes commercial and residential improvement but excludes most landscaping services.

A collection of trade groups challenged the law, arguing that it was unconstitutionally vague and that its penalties (compensatory damages plus up to $10,000 per violation) were excessive. They sought a preliminary injunction to suspend the law while they could mount a more substantive challenge.

A district court denied the motion, and then last month the Eighth Circuit Court of Appeals affirmed. The new test therefore remains in place. The Eighth Circuit expressed skepticism about each of the trade groups’ arguments and ruled that they were unlikely to succeed on the merits.

This case is a reminder that the independent contractor tests vary widely. There are different tests for different laws in different states and even within different industries.

Companies using independent contractors should check the laws of their state and industry before assuming that their contract will be sufficient to support contractor status.

A miss here could be painful. Like the sting of a rusty patched bumblebee. If that kind even stings. But for today, let’s assume it stings. And stings hard.

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© 2025 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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06.23.25
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Higher or No Hire? Don’t Forget This Minnesota Law When Working with Staffing Agencies

I searched in Apple Music for songs titled “Higher,” and it’s a pretty common song title. There are songs called “Higher” by Creed, Tems, Citizen Cope, TEC, burns Boy, Rihanna, DJ Khaled, Lemaitre, Chris Stapleton Michael Buble, Eminem and more. I stopped the list because you get the idea. If you want “Higher,” just search for songs, and you’ll have many to choose from.

But if instead you want “Hire,” and you’re in Minnesota, your options are much fewer. Or, actually, your options are much fewer if you want “No Hire.” Let me explain.

A Minnesota law enacted last summer bans service providers, including staffing agencies, from doing anything to “restrict, restrain, or prohibit” the hiring of its employees or independent contractors. That means a clause prohibiting direct hire is no longer allowed. The law also bans clauses that would prevent soliciting such workers for direct hire.

The law took effect July 1, 2024, and it applies to earlier contracts too, rendering these clauses void.

There are a few limited exceptions, such as for vendors providing professional business consulting for computer software development. But that’s a pretty narrow lane to try to drive your truck through. Reminds me of some tunnels I drove through in Northern Italy last fall. Not much room to maneuver. Especially when there’s a bus in the tunnel. They shouldn’t let buses in those tunnels.

A possible workaround is to impose direct hire fees, but those fees may be seen as “restrict[ing]” or “restrain[ing]” hiring. It’s unclear whether Minnesota courts will view direct hire fees as an unlawful restriction or restraint under this new law.

If your business provides or uses staffing services in Minnesota, check your contract. Same thing for contracts with other vendors who supply labor, such as consultants. If the contract prohibits direct hire of the vendor or staffing agency’s employees, that clause is probably now void.

And there are no good songs about laws that void contract clauses. I checked.

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© 2025 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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06.24.24
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Uncomfortably Numb: Minnesota’s New 14-Part Independent Contractor Test

Friday night I saw The Gilmour Project play at Northfield MGM, a smallish venue near Cleveland. Great show with plenty of Pink Floyd deep cuts and a “how did they just do that?” version of The Great Gig in the Sky with an electric guitar handling the Clare Torry solo vocals.

And, as many of you know, there is a law requiring that the last song at any Pink Floyd tribute show must be “Comfortably Numb.” There were no violations of law at this concert.

Last week I came across another law that, in a totally unrelated way, left me uncomfortably numb.

Tucked away in a 1,492-page omnibus bill that regulates, among other things, firearms law, agricultural policy, specialty dentist licensure, minerals taxes, combative sports, and broadband appropriation transfer authority, the Minnesota legislature adopted a new test for determining who is an independent contractor under state law, limited to the construction industry. Page 183.

To satisfy the test, each of 14 factors must be present. Construction includes building improvement but not landscaping services [@LKE: saved you an email].

Why am I posting about such a niche classification test? Two reasons.

First, I suffered through reading it, so I am sharing my pain.

Second, and more important, it’s a good reminder that there are so many worker classification laws out there, with different tests applying across different laws in different states and across different industries.

Minnesota is the champion of this nonsense. The state that brought us rollerblades, water skis, and diaper adhesives has 32 different tests for determining who is an employee under state workers’ compensation law, with different tests applicable to different types of work.

If you are working with large numbers of independent contractors across multiple jurisdictions, there’s a lot to know if you want to do it right. Penalties for noncompliance can be severe, including criminal penalties in some states.

Bonus tip: If you need to fall asleep, pull out that omnibus bill and skip to page 1,086 for the new regulations covering natural organic reduction vessels for human remains. Subdivision 19 prohibits the commingling of bodies in crematorium vessels. I guess that’s good. A different kind of comfortably numb maybe.

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© 2024 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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