HF 1255

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to workers' compensation; clarifying the powers to determine
independent contractor status; requiring commissioner of revenue review of
certain documents related to independent contractor status; amending Minnesota
Statutes 2006, sections 176.042, subdivision 2; 289A.12, by adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2006, section 176.042, subdivision 2, is amended to read:

Subd. 2.

Exception.

new text begin (a) new text end An independent contractor, as described in subdivision 1, is
not an employee of an employer for whom the independent contractor performs work or
services if the independent contractor meets all of the following conditions:

(1) maintains a separate business with the independent contractor's own office,
equipment, materials, and other facilities;

(2) holds or has applied for a federal employer identification number or has filed
business or self-employment income tax returns with the federal Internal Revenue Service
based on that work or service in the previous year;

(3) operates under contracts to perform specific services or work for specific
amounts of money and under which the independent contractor controls the means of
performing the services or work;

(4) incurs the main expenses related to the service or work that the independent
contractor performs under contract;

(5) is responsible for the satisfactory completion of work or services that the
independent contractor contracts to perform and is liable for a failure to complete the
work or service;

(6) receives compensation for work or service performed under a contract on a
commission or per-job or competitive bid basis and not on any other basis;

(7) may realize a profit or suffer a loss under contracts to perform work or service;

(8) has continuing or recurring business liabilities or obligations; and

(9) the success or failure of the independent contractor's business depends on the
relationship of business receipts to expenditures.

new text begin (b) An employer must certify in writing that the employer has reviewed whether
clauses (1) to (9) have been satisfied with respect to an independent contractor and that, to
the best of the employer's knowledge, the conditions have been satisfied. The employer
must make a reasonable investigation before certifying. The certification must be made
prior to the performance of services by the independent contractor for the employer. The
certification must be done on a form approved by the commissioner. A copy of the form
must be provided to the commissioner and, upon request, to a workers' compensation
insurer and the individual to whom the certification applies. The commissioner shall
review the certificates and shall investigate and audit certificates on a random basis and,
when the review raises questions as to the truthfulness of a certificate, the commissioner
must notify the commissioner of revenue and provide the commissioner of revenue
a copy of the certificate. The commissioner of revenue must review the information
returns required under section 6041A of the Internal Revenue Code of an employer whose
certifications have been provided to the commissioner.
new text end

new text begin (c) A person who signs a certificate knowing it to be untrue is guilty of a
misdemeanor.
new text end

Sec. 2.

Minnesota Statutes 2006, section 289A.12, is amended by adding a subdivision
to read:

new text begin Subd. 15. new text end

new text begin Review of independent contractor certifications. new text end

new text begin The commissioner
shall participate with the commissioner of labor and industry in an annual review and
comparison of independent contractor certifications of employers required under section
181.722, subdivision 3, and information returns required under section 6041A of the
Internal Revenue Code. The commissioner must review any independent contractor
certifications applicable to returns audited or investigated under section 289A.35.
new text end