Bill Text: MN SF2065 | 2013-2014 | 88th Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Omnibus jobs and economic development bill
Spectrum: Moderate Partisan Bill (Democrat 4-1)
Status: (Passed) 2014-05-21 - Secretary of State Chapter 305 [SF2065 Detail]
Download: Minnesota-2013-SF2065-Introduced.html
Bill Title: Omnibus jobs and economic development bill
Spectrum: Moderate Partisan Bill (Democrat 4-1)
Status: (Passed) 2014-05-21 - Secretary of State Chapter 305 [SF2065 Detail]
Download: Minnesota-2013-SF2065-Introduced.html
1.2relating to labor and industry; making permanent an independent contractor
1.3registration pilot project;amending Minnesota Statutes 2012, section 181.723,
1.4subdivisions 4, 4a, 5, 7, 16; proposing coding for new law in Minnesota Statutes,
1.5chapter 326B.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2012, section 181.723, subdivision 4, is amended to read:
1.8 Subd. 4. Independent contractor. (a) An individual is an independent contractor
1.9and not an employee of the person for whom the individual is performing services in the
1.10course of the person's trade, business, profession, or occupation only if the individualis
1.11registered with the Department of Labor and Industry, if required under subdivision 4a,
1.12and the individual:
1.13(1) maintains a separate business with the individual's own office, equipment,
1.14materials, and other facilities;
1.15(2)(i) holds or has applied for a federal employer identification number or (ii) has
1.16filed business or self-employment income tax returns with the federal Internal Revenue
1.17Service if the individual has performed services in the previous year;
1.18(3) is operating under contract to perform the specific services for the person
1.19for specific amounts of money and under which the individual controls the means of
1.20performing the services;
1.21(4) is incurring the main expenses related to the services that the individual is
1.22performing for the person under the contract;
1.23(5) is responsible for the satisfactory completion of the services that the individual
1.24has contracted to perform for the person and is liable for a failure to complete the services;
2.1(6) receives compensation from the person for the services performed under the
2.2contract on a commission or per-job or competitive bid basis and not on any other basis;
2.3(7) may realize a profit or suffer a loss under the contract to perform services for
2.4the person;
2.5(8) has continuing or recurring business liabilities or obligations; and
2.6(9) the success or failure of the individual's business depends on the relationship of
2.7business receipts to expenditures.
2.8An individual who is not registered, if required by section 326B.701, is presumed to
2.9be an employee of a person for whom the individual performs services in the course of
2.10the person's trade, business, profession, or occupation. The person for whom the services
2.11were performed may rebut this presumption by showing that the unregistered individual
2.12met all nine factors at the time the services were performed.
2.13(b) If an individual is an owner or partial owner of a business entity, the individual is
2.14an employee of the person for whom the individual is performing services in the course
2.15of the person's trade, business, profession, or occupation, and is not an employee of the
2.16business entity in which the individual has an ownership interest, unless:
2.17(1) the business entity meets the nine factors in paragraph (a);
2.18(2) invoices and payments aresubmitted in the name of the business entity; and
2.19(3) the business entity is registered with the secretary of state, if required; and.
2.20(4) the business entity is registered with the Department of Labor and Industry,
2.21if required under subdivision 4a.
2.22If the business entity in which the individual has an ownership interest is not
2.23registered, if required by section 326B.701, the individual is presumed to be an employee
2.24of a person for whom the individual performs services and not an employee of the business
2.25entity in which the individual has an ownership interest. The person for whom the services
2.26were performed may rebut the presumption by showing that the business entity met the
2.27requirements of clauses (1) to (3) at the time the services were performed.
2.28 Sec. 2. Minnesota Statutes 2012, section 181.723, subdivision 4a, is amended to read:
2.29 Subd. 4a. Applicability; registrationpilot project requirement. (a) The
2.30commissioner shall implement a pilot project, effective July 1, 2012, for the registration
2.31of Persons who perform public or private sector commercial or residential building
2.32construction or improvement services as described in subdivision 2 must register with the
2.33commissioner as provided in this section. The purpose ofthe pilot project is to evaluate
2.34whether the information obtained through registration assists registration is to assist
2.35 the Department of Labor and Industry, the Department of Employment and Economic
3.1Development, and the Department of Revenue to enforce laws related to misclassification
3.2of employees.The commissioner shall issue a report to the legislature no later than
3.3January 1, 2014, on recommendations for amendments to the registration program,
3.4including reasonable registration fees to be used to aid in enforcing misclassification laws.
3.5The commissioner must not charge a fee for registration under the pilot project, but may
3.6take the enforcement action specified in subdivision 8a. The pilot project shall expire on
3.7June 30, 2014, unless extended by the legislature.
3.8(b) Except as provided in paragraph (c), any person who performs construction
3.9services in the state on or after September 15, 2012, must register with the commissioner
3.10as provided insubdivision 5 section 326B.701 before performing construction services for
3.11another person. The requirements for registration underthis subdivision section 326B.701
3.12 are not a substitute for, and do not relieve a person from complying with, any other law
3.13requiring that the person be licensed, registered, or certified.
3.14(c) The registration requirements inthis subdivision section 326B.701 do not apply to:
3.15(1) a person who, at the time the person is performing the construction services,
3.16holds a current license, certificate, or registration under chapter 299M or 326B;
3.17(2) a person who holds a current independent contractor exemption certificate
3.18issued under this section that is in effect on September 15, 2012, except that the person
3.19must register underthis section 326B.701 no later than the date the exemption certificate
3.20expires, is revoked, or is canceled;
3.21(3) a person who has given a bond to the state under section326B.197 or
326B.46 ;
3.22(4) an employee of the person performing the construction services, if the person
3.23was in compliance with laws related to employment of the individual at the time the
3.24construction services were performed;
3.25(5) an architect or professional engineer engaging in professional practice as defined
3.26in section326.02, subdivisions 2 and 3;
3.27(6) a school district or technical college governed under chapter 136F;
3.28(7) a person providing construction services on a volunteer basis, including but not
3.29limited to Habitat for Humanity and Builders Outreach Foundation, and their individual
3.30volunteers when engaged in activities on their behalf; or
3.31(8) a person exempt from licensing under section326B.805, subdivision 6 , clause (5).
3.32 Sec. 3. Minnesota Statutes 2012, section 181.723, subdivision 5, is amended to read:
3.33 Subd. 5. Registration application. (a) Persons required to register under
3.34subdivision 4a section 326B.701 must submit electronically, in the manner prescribed by
3.35the commissioner, a complete application according to paragraphs (b) to (d).
4.1 (b) A complete application must include all of the following information about any
4.2individual who is registering as an individual or a sole proprietor, or who owns 25 percent
4.3or more of a business entity being registered:
4.4 (1) the individual's full legal name and title at the applicant's business;
4.5 (2) the individual's business address and telephone number;
4.6 (3) the percentage of the applicant's business owned by the individual; and
4.7 (4) the individual's Social Security number.
4.8(c) A complete application must also include the following information:
4.9(1) the applicant's legal name; assumed name filed with the secretary of state, if any;
4.10designated business address; physical address; telephone number; and e-mail address;
4.11(2) the applicant's Minnesota tax identification number, if one is required or has
4.12been issued;
4.13(3) the applicant's federal employer identification number, if one is required or
4.14has been issued;
4.15(4) evidence of the active status of the applicant's business filings with the secretary
4.16of state, if one is required or has been issued;
4.17(5) whether the applicant has any employees at the time the application is filed;
4.18(6) the names of all other persons with an ownership interest in the business entity
4.19who are not identified in paragraph (b), and the percentage of the interest owned by each
4.20person, except that the names of shareholders with less than ten percent ownership in a
4.21publicly traded corporation need not be provided;
4.22(7) information documenting compliance with workers' compensation and
4.23unemployment insurance laws;
4.24(8) a certification that the person signing the application has: reviewed it; determined
4.25that the information provided is true and accurate; and determined that the person signing
4.26is authorized to sign and file the application as an agent of the applicant. The name of the
4.27person signing, entered on an electronic application, shall constitute a valid signature of
4.28the agent on behalf of the applicant; and
4.29(9) a signed authorization for the Department of Labor and Industry to verify the
4.30information provided on or with the application.
4.31(d) A registered person must notify the commissioner within 15 days after there is a
4.32change in any of the information on the application as approved. This notification must
4.33be provided electronically in the manner prescribed by the commissioner. However, if
4.34the business entity structure, legal form of the business entity, or business ownership has
4.35changed, the person must submit a new registration application and registration fee, if
4.36any, for the new business entity.
5.1(e) The registered person must remain registered while providing construction
5.2services for another person. The provisions of sections326B.091 and,
326B.094 to,
5.3326B.095, and326B.097 apply to this section 326B.701. A person with an expired
5.4registration shall not provide construction services for another person if registration is
5.5required under this section. Registration application and expiration time frames are as
5.6follows:
5.7(1) all registrations issued on or before June 30, 2015, expire on June 30, 2015;
5.8(2) all registrations issued after June 30, 2015, expire on the following June 30
5.9of each odd-numbered year; and
5.10(3) a person may submit a registration or renewal application starting April 1 of the
5.11year the registration expires. If a renewal application is submitted later than May 1 of
5.12the expiration year, registration may expire before the department has issued or denied
5.13the registration.
5.14 Sec. 4. Minnesota Statutes 2012, section 181.723, subdivision 7, is amended to read:
5.15 Subd. 7. Prohibited activities related to independent contractor status. (a) The
5.16prohibited activities in this subdivision are in addition to those prohibited in sections
5.17326B.081
to
326B.085 .
5.18 (b) An individual shall not hold himself or herself out as an independent contractor
5.19unless the individual meets the requirements of subdivision 4.
5.20 (c) A person who provides construction services in the course of the person's trade,
5.21business, occupation, or profession shall not:
5.22 (1) require an individual through coercion, misrepresentation, or fraudulent means to
5.23adopt independent contractor status or form a business entity;
5.24 (2) knowingly misrepresent or misclassify an individual as an independent
5.25contractor;.
5.26 Subd. 7a. Prohibited activities related to registration. (a) The prohibited activities
5.27in this subdivision are in addition to those prohibited in sections 326B.081 to 326B.085.
5.28(b) A person who provides construction services in the course of the person's trade,
5.29business, occupation, or profession shall not:
5.30(3) (1) contract with or perform construction services for another person without first
5.31being registered if required bysubdivision 4a section 326B.701;
5.32(4) (2) contract with or pay another person to perform construction services if
5.33the other person is not registered if required by subdivision 4a. All payments to an
5.34unregistered person for construction services on a single project site shall be considered a
5.35single violation. It is not a violation of this clause:
6.1(i) for a person to contract with or pay an unregistered person if the unregistered
6.2person was registered at the time the contract for construction services was entered into; or
6.3(ii) for a homeowner or business to contract with or pay an unregistered person if
6.4the homeowner or business is not in the trade, business, profession, or occupation of
6.5performing building construction or improvement services; or
6.6(5) (3) be penalized for violations of this subdivision that are committed by another
6.7person. This clause applies only to violations of this paragraph.
6.8 Sec. 5. Minnesota Statutes 2012, section 181.723, subdivision 16, is amended to read:
6.9 Subd. 16. Data classified. Data in applications and any required documentation
6.10submitted to the commissioner under this section are private data on individuals or
6.11nonpublic data as defined in section13.02 . Data in registration certificates issued by
6.12the commissioner are public data; except that registration information published on the
6.13department's Web site may be accessed for registration verification purposes only. Data that
6.14document a revocation or cancellation of a certificate are public data.Upon request of the
6.15Department The commissioners of revenue or the Department of, labor and industry, and
6.16 employment and economic development, the commissioner may release to the requesting
6.17department each of the other departments data classified as private or nonpublic under this
6.18subdivision or investigative data that are not public under section13.39 that relate to:
6.19(1) investigations or determinations about misclassification of workers; or
6.20 (2) the issuance or denial of applications or revocations ofcertificates registration
6.21under section 326B.701.
6.22 Sec. 6. [326B.701] CONSTRUCTION CONTRACTOR REGISTRATION.
6.23The following definition applies to this section: "business entity" means a person
6.24other than an individual or a sole proprietor.
6.25 Sec. 7. REVISOR'S INSTRUCTION.
6.26The revisor of statutes shall renumber the citations in column A with the citations
6.27in column B. The revisor shall correct any cross-references required because of the
6.28renumbering and may make necessary grammatical and technical changes, including
6.29changes to sentence structure, to preserve the meaning of the text.
1.3registration pilot project;amending Minnesota Statutes 2012, section 181.723,
1.4subdivisions 4, 4a, 5, 7, 16; proposing coding for new law in Minnesota Statutes,
1.5chapter 326B.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2012, section 181.723, subdivision 4, is amended to read:
1.8 Subd. 4. Independent contractor. (a) An individual is an independent contractor
1.9and not an employee of the person for whom the individual is performing services in the
1.10course of the person's trade, business, profession, or occupation only if the individual
1.11
1.12
1.13(1) maintains a separate business with the individual's own office, equipment,
1.14materials, and other facilities;
1.15(2)(i) holds or has applied for a federal employer identification number or (ii) has
1.16filed business or self-employment income tax returns with the federal Internal Revenue
1.17Service if the individual has performed services in the previous year;
1.18(3) is operating under contract to perform the specific services for the person
1.19for specific amounts of money and under which the individual controls the means of
1.20performing the services;
1.21(4) is incurring the main expenses related to the services that the individual is
1.22performing for the person under the contract;
1.23(5) is responsible for the satisfactory completion of the services that the individual
1.24has contracted to perform for the person and is liable for a failure to complete the services;
2.1(6) receives compensation from the person for the services performed under the
2.2contract on a commission or per-job or competitive bid basis and not on any other basis;
2.3(7) may realize a profit or suffer a loss under the contract to perform services for
2.4the person;
2.5(8) has continuing or recurring business liabilities or obligations; and
2.6(9) the success or failure of the individual's business depends on the relationship of
2.7business receipts to expenditures.
2.8An individual who is not registered, if required by section 326B.701, is presumed to
2.9be an employee of a person for whom the individual performs services in the course of
2.10the person's trade, business, profession, or occupation. The person for whom the services
2.11were performed may rebut this presumption by showing that the unregistered individual
2.12met all nine factors at the time the services were performed.
2.13(b) If an individual is an owner or partial owner of a business entity, the individual is
2.14an employee of the person for whom the individual is performing services in the course
2.15of the person's trade, business, profession, or occupation, and is not an employee of the
2.16business entity in which the individual has an ownership interest, unless:
2.17(1) the business entity meets the nine factors in paragraph (a);
2.18(2) invoices and payments are
2.19(3) the business entity is registered with the secretary of state, if required
2.20
2.21
2.22If the business entity in which the individual has an ownership interest is not
2.23registered, if required by section 326B.701, the individual is presumed to be an employee
2.24of a person for whom the individual performs services and not an employee of the business
2.25entity in which the individual has an ownership interest. The person for whom the services
2.26were performed may rebut the presumption by showing that the business entity met the
2.27requirements of clauses (1) to (3) at the time the services were performed.
2.28 Sec. 2. Minnesota Statutes 2012, section 181.723, subdivision 4a, is amended to read:
2.29 Subd. 4a. Applicability; registration
2.30
2.31
2.32construction or improvement services as described in subdivision 2 must register with the
2.33commissioner as provided in this section. The purpose of
2.34
2.35 the Department of Labor and Industry, the Department of Employment and Economic
3.1Development, and the Department of Revenue to enforce laws related to misclassification
3.2of employees.
3.3
3.4
3.5
3.6
3.7
3.8(b) Except as provided in paragraph (c), any person who performs construction
3.9services in the state on or after September 15, 2012, must register with the commissioner
3.10as provided in
3.11another person. The requirements for registration under
3.12 are not a substitute for, and do not relieve a person from complying with, any other law
3.13requiring that the person be licensed, registered, or certified.
3.14(c) The registration requirements in
3.15(1) a person who, at the time the person is performing the construction services,
3.16holds a current license, certificate, or registration under chapter 299M or 326B;
3.17(2) a person who holds a current independent contractor exemption certificate
3.18issued under this section that is in effect on September 15, 2012, except that the person
3.19must register under
3.20expires, is revoked, or is canceled;
3.21(3) a person who has given a bond to the state under section
3.22(4) an employee of the person performing the construction services, if the person
3.23was in compliance with laws related to employment of the individual at the time the
3.24construction services were performed;
3.25(5) an architect or professional engineer engaging in professional practice as defined
3.26in section
3.27(6) a school district or technical college governed under chapter 136F;
3.28(7) a person providing construction services on a volunteer basis, including but not
3.29limited to Habitat for Humanity and Builders Outreach Foundation, and their individual
3.30volunteers when engaged in activities on their behalf; or
3.31(8) a person exempt from licensing under section
3.32 Sec. 3. Minnesota Statutes 2012, section 181.723, subdivision 5, is amended to read:
3.33 Subd. 5. Registration application. (a) Persons required to register under
3.34
3.35the commissioner, a complete application according to paragraphs (b) to (d).
4.1 (b) A complete application must include all of the following information about any
4.2individual who is registering as an individual or a sole proprietor, or who owns 25 percent
4.3or more of a business entity being registered:
4.4 (1) the individual's full legal name and title at the applicant's business;
4.5 (2) the individual's business address and telephone number;
4.6 (3) the percentage of the applicant's business owned by the individual; and
4.7 (4) the individual's Social Security number.
4.8(c) A complete application must also include the following information:
4.9(1) the applicant's legal name; assumed name filed with the secretary of state, if any;
4.10designated business address; physical address; telephone number; and e-mail address;
4.11(2) the applicant's Minnesota tax identification number, if one is required or has
4.12been issued;
4.13(3) the applicant's federal employer identification number, if one is required or
4.14has been issued;
4.15(4) evidence of the active status of the applicant's business filings with the secretary
4.16of state, if one is required or has been issued;
4.17(5) whether the applicant has any employees at the time the application is filed;
4.18(6) the names of all other persons with an ownership interest in the business entity
4.19who are not identified in paragraph (b), and the percentage of the interest owned by each
4.20person, except that the names of shareholders with less than ten percent ownership in a
4.21publicly traded corporation need not be provided;
4.22(7) information documenting compliance with workers' compensation and
4.23unemployment insurance laws;
4.24(8) a certification that the person signing the application has: reviewed it; determined
4.25that the information provided is true and accurate; and determined that the person signing
4.26is authorized to sign and file the application as an agent of the applicant. The name of the
4.27person signing, entered on an electronic application, shall constitute a valid signature of
4.28the agent on behalf of the applicant; and
4.29(9) a signed authorization for the Department of Labor and Industry to verify the
4.30information provided on or with the application.
4.31(d) A registered person must notify the commissioner within 15 days after there is a
4.32change in any of the information on the application as approved. This notification must
4.33be provided electronically in the manner prescribed by the commissioner. However, if
4.34the business entity structure, legal form of the business entity, or business ownership has
4.35changed, the person must submit a new registration application and registration fee, if
4.36any, for the new business entity.
5.1(e) The registered person must remain registered while providing construction
5.2services for another person. The provisions of sections
5.3326B.095, and
5.4registration shall not provide construction services for another person if registration is
5.5required under this section. Registration application and expiration time frames are as
5.6follows:
5.7(1) all registrations issued on or before June 30, 2015, expire on June 30, 2015;
5.8(2) all registrations issued after June 30, 2015, expire on the following June 30
5.9of each odd-numbered year; and
5.10(3) a person may submit a registration or renewal application starting April 1 of the
5.11year the registration expires. If a renewal application is submitted later than May 1 of
5.12the expiration year, registration may expire before the department has issued or denied
5.13the registration.
5.14 Sec. 4. Minnesota Statutes 2012, section 181.723, subdivision 7, is amended to read:
5.15 Subd. 7. Prohibited activities related to independent contractor status. (a) The
5.16prohibited activities in this subdivision are in addition to those prohibited in sections
5.18 (b) An individual shall not hold himself or herself out as an independent contractor
5.19unless the individual meets the requirements of subdivision 4.
5.20 (c) A person who provides construction services in the course of the person's trade,
5.21business, occupation, or profession shall not:
5.22 (1) require an individual through coercion, misrepresentation, or fraudulent means to
5.23adopt independent contractor status or form a business entity;
5.24 (2) knowingly misrepresent or misclassify an individual as an independent
5.25contractor
5.26 Subd. 7a. Prohibited activities related to registration. (a) The prohibited activities
5.27in this subdivision are in addition to those prohibited in sections 326B.081 to 326B.085.
5.28(b) A person who provides construction services in the course of the person's trade,
5.29business, occupation, or profession shall not:
5.30
5.31being registered if required by
5.32
5.33the other person is not registered if required by subdivision 4a. All payments to an
5.34unregistered person for construction services on a single project site shall be considered a
5.35single violation. It is not a violation of this clause:
6.1(i) for a person to contract with or pay an unregistered person if the unregistered
6.2person was registered at the time the contract for construction services was entered into; or
6.3(ii) for a homeowner or business to contract with or pay an unregistered person if
6.4the homeowner or business is not in the trade, business, profession, or occupation of
6.5performing building construction or improvement services; or
6.6
6.7person. This clause applies only to violations of this paragraph.
6.8 Sec. 5. Minnesota Statutes 2012, section 181.723, subdivision 16, is amended to read:
6.9 Subd. 16. Data classified. Data in applications and any required documentation
6.10submitted to the commissioner under this section are private data on individuals or
6.11nonpublic data as defined in section
6.12the commissioner are public data; except that registration information published on the
6.13department's Web site may be accessed for registration verification purposes only. Data that
6.14document a revocation or cancellation of a certificate are public data.
6.15
6.16 employment and economic development
6.17
6.18subdivision or investigative data that are not public under section
6.19(1) investigations or determinations about misclassification of workers; or
6.20 (2) the issuance or denial of applications or revocations of
6.21under section 326B.701.
6.22 Sec. 6. [326B.701] CONSTRUCTION CONTRACTOR REGISTRATION.
6.23The following definition applies to this section: "business entity" means a person
6.24other than an individual or a sole proprietor.
6.25 Sec. 7. REVISOR'S INSTRUCTION.
6.26The revisor of statutes shall renumber the citations in column A with the citations
6.27in column B. The revisor shall correct any cross-references required because of the
6.28renumbering and may make necessary grammatical and technical changes, including
6.29changes to sentence structure, to preserve the meaning of the text.
