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S.F. No. 2065 - Construction Industry Registration and Independent Contractor Status
Author: Senator Matt Schmit
Prepared By:
Date: March 12, 2014



In 2007, Minnesota Statutes, section 181.723 was enacted to address the issue of misclassification of employees in the construction industry as independent contractors.  The law’s central provision was a registration system that required a certificate from the Department of Labor and Industry to establish independent contractor status.  The system did not work well and the law was converted to a pilot program in 2012 that is set to expire June 30,2014.  S.F. No 2065 repeals the pilot program and replaces it with a new, no fee registration system in chapter 326B that is administered by the Department of Labor and Industry.  Failure to register as an independent contractor creates a rebuttable presumption that an individual is an employee.  The tests for establishing independent contractor status are not changed from the prior law.

Section 1 creates a rebuttable presumption that if an individual is not registered as an independent contractor that the individual is an employee of the person for whom services were provided in the course of the person’s trade, business, profession, or occupation.  Similar provisions provide for an individual with an ownership interest in a business entity that is not registered.

Section 2 repeals the pilot project and makes the new registration system permanent.

Section 3 provides for a two-year registration cycle and otherwise regulates applications for registration.

Section 4, in combination with the revisor’s instruction in section7, moves prohibited activities regulation with respect to applications from section 181.723 to section 326B.701.

Sections 5 and 6 are technical.

Section 7 is an instruction to the revisor recodifying the contractor registration process in section 326B.701.


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