Independent Contractor Misclassification

Haga clic aquí para leer este artículo en español
Download this PDF - View all Publications

Who Is An Independent Contractor?

Individuals who perform regular work for a  company  in the course of that company’s  business  are  employees. An independent contractor, on the other hand, is a worker who is not an employee and independently contracts with an individual or business to provide a good or perform a service.
Independent contractors receive a Form 1099 for taxes while employees receive a Form W-2.

Independent Contractor Misclassification

Independent contractor misclassification is a serious
problem in Minnesota.

Employers misclassify employees as independent contractors for many reasons, including:

This misclassifications hurts employees, the public, and employers who play by the rules.

Independent contractor misclassification is wage theft.

How Do You Know If You Are An Independent Contractor?

Employers cannot legally classify a worker as an independent contractor if the worker qualifies as an employee. An employer also cannot circumvent protections for employees by forcing workers to sign a contract saying that they are independent contractors, when in reality they are employees.
Generally, a worker qualifies as an employee in Minnesota
for the purposes of wage and hour protections if:

None of these factors are determinative, and a worker does not need to meet all of these factors in order to be considered an employee.

Generally, a worker is a legitimate independent contractor if:

Industries Where Misclassification Is Widespread

While independent contractor misclassification occurs in all industries, it is particularly prevalent in industries with scattered worksites such as:

“Common industry practice” is not an excuse for an employer to misclassify an employee as an independent contractor.

Who To Contact

If you believe you have been misclassified, there are many governmental organizations you can contact, including:

The Attorney General’s Office has broad authority to investigate violations of Minnesota’s wage-related laws, including worker misclassification. The Attorney General’s Office can be contacted at:

Office of Minnesota Attorney General Keith Ellison
Wage Theft Unit
445 Minnesota Street, Suite 1400
St. Paul, MN 55101
(651) 296-3353 (Twin Cities Calling Area)
(800) 657-3787 (Outside the Twin Cities)
(800) 627-3529 (Minnesota Relay)

The Minnesota Department of Labor and Industry (“DLI”)  is the state agency with authority to investigate violations of and enforce many of Minnesota’s wage-related laws, including worker misclassification. DLI can be contacted at:

Minnesota Department of Labor and Industry
443 Lafayette Road North
St. Paul, MN 55155
(651) 284-5005 or (800) 342-5354

The Minnesota Department of Employment and Economic Development (“DEED”) enforces worker misclassification laws as part of its authority to administer the unemployment insurance program. DEED can be contacted at:

Minnesota Department of Employment and Economic Development
1st National Bank Building
332 Minnesota Street, Suite E200
St. Paul, MN 55101
(651) 259-7114 or (800) 657-3858

The Minnesota Department of Revenue (“DOR”) enforces worker classification laws to the extent they relate to employers’ compliance with tax law. DOR can be contacted at:

Minnesota Department of Revenue
Tax Evasion or Tax Fraud Tips
Mail Station 6590
600 N. Robert Street
St. Paul, MN 55146
(651) 297-5195 or (800) 657-3105

Related Posts:

Wage Theft

Wage theft occurs any time an employer does not pay an employee everything the employee is owed by law. Nationally, employees are underpaid by as much as $50 billion dollars each year due to wage theft.

Women’s Economic Security in Minnesota

Protecting and promoting women’s economic security and equal access to employment and opportunity in Minnesota is essential to Minnesota’s economic health. Minnesota’s laws protecting these rights keep talented women in the workforce, help lift up families and children, and benefit Minnesota as a whole by ensuring that everyone—regardless of gender—can afford to live their lives with dignity and respect.