Most construction contracts include a provision stating that the contractor or subcontractor is an independent contractor and not an employee of the owner or contractor. That should settle the matter, right? Wrong. Depending on the context and jurisdiction, such contractual provisions may mean little or nothing at all.
In 2024, the Minnesota Legislature passed a law that contains 14 mandatory requirements for a construction contractor to qualify as an independent contractor under the state labor laws. Among other requirements, the contractor must:
Contractors in Minnesota who do not satisfy all these and other requirements are considered employees. The state may assess fines of up to $10,000 per violation against those who misclassify their contractors and subcontractors as independent contractors.
In Minnesota ABC v. Blissenbach, the Minnesota Chapter of the Associated Builders and Contractors (ABC) challenged the new law in federal court arguing that it was unconstitutional. ABC alleged several common practices that the law arguably proscribes, including not executing written subcontracts within 30 days of beginning work and paying...
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