Independent contractors are becoming more popular in today’s society, and while being labeled as an independent contractor offers both sides a little more freedom, the contractor also misses out on one key aspect of employment – workers compensation benefits. If you are classified as an independent contractor, your employer does not have to pay you workers’ compensation or unemployment benefits in the event that you are terminated.
Because of this, it’s obvious that from an employer’s standpoint, they’d prefer that every employee would be classified as an independent contractor. However, Minnesota has created a few different tests to determine if a person is indeed a contractor or instead an employee of the business. Those tests are the focus of today’s blog.
Independent Contractors in Construction
When it comes to the construction industry, Minnesota has developed a nine-factor test to determine whether someone is an employee or an independent contractor. According to the state, a person is an independent contractor if:
- They maintain a separate business with the individual’s own office, equipment, materials and other facilities;
- They hold or have applied for a federal employer identification number or (ii) has filed business or self-employment income tax returns with the federal Internal Revenue Service if the individual has performed services in the previous year;
- They operate under contract to perform the specific services for the person for specific amounts of money and under which the individual controls the means of performing the services;
- They are incurring the main expenses related to the services that the individual is performing for the person under the contract;
- They are responsible for the satisfactory completion of the services that the individual has contracted to perform for the person and is liable for a failure to complete the services;
- They receive compensation from the person for the services performed under the contract on a commission or per-job or competitive bid basis and not on any other basis;
- They may realize a profit or suffer a loss under the contract to perform services for the person;
- They have continuing or recurring business liabilities or obligations; and
- The success or failure of the individual’s business depends on the relationship of business receipts to expenditures.
Unless you can say yes to all the above factors, it is likely that you are an employee, and you should talk to a workers’ compensation lawyer if you’re getting pushback about filing an injury claim.
Independent Contractors in Other Realms
For other industries, Minnesota has created a simple five-factor test to determine whether a person is an employee of independent contractor. That test involves analyzing the following five factors:
- The ability to control the means and manner of performance.
- How payment is collected and agreed upon.
- Who furnishes the tools and materials.
- Control over the area where the work is performed.
- The right of discharge.
If you find that the above factors are dictated by your employer, and that you have little say in the matter, you are likely an employee, not an independent contractor. If you’re not exactly sure how to apply this test, consult a workers’ compensation attorney like Dean Margolis. He’ll be able to go over your work duties, the obligations of your employer, and analyze all the above factors to make a case that you are indeed an employee, not an independent contractor, no matter what label the company tried to put on you. You have rights, and if you are injured while acting as an employee, you deserve to get compensated. Contact Margolis Law Firm to learn more about your options.
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