HF 2742

as introduced - 88th Legislature (2013 - 2014) Posted on 03/06/2014 01:07pm

A bill for an act
relating to workers' compensation; regulating independent contract status of
certain individuals in the trucking industry; imposing penalties; amending
Minnesota Statutes 2012, section 176.043.

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

Section 1.

Minnesota Statutes 2012, section 176.043, is amended to read:

176.043 TRUCKING deleted text begin AND deleted text end new text begin /DELIVERY/ new text end MESSENGER/COURIER
INDUSTRIES; INDEPENDENT CONTRACTORS.

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

deleted text begin In the trucking and messenger/courier industries, an
operator of a car, van, truck, tractor, or truck-tractor that is licensed and registered by a
governmental motor vehicle agency is an employee unless each of the following factors is
present, and if each factor is present, the operator is an independent contractor:
deleted text end

deleted text begin (1) the individual owns the equipment or holds it under a bona fide lease arrangement;
deleted text end

deleted text begin (2) the individual is responsible for the maintenance of the equipment;
deleted text end

deleted text begin (3) the individual is responsible for the operating costs, including fuel, repairs,
supplies, vehicle insurance, and personal expenses. The individual may be paid the
carrier's fuel surcharge and incidental costs, including, but not limited to, tolls, permits,
and lumper fees;
deleted text end

deleted text begin (4) the individual is responsible for supplying the necessary personal services
to operate the equipment;
deleted text end

deleted text begin (5) the individual's compensation is based on factors related to the work performed,
such as a percentage of any schedule of rates, and not on the basis of the hours or time
expended;
deleted text end

deleted text begin (6) the individual substantially controls the means and manner of performing the
services, in conformance with regulatory requirements and specifications of the shipper;
and
deleted text end

deleted text begin (7) the individual enters into a written contract that specifies the relationship to be
that of an independent contractor and not that of an employee. deleted text end new text begin (a) As used in this section,
the terms defined in this subdivision have the meanings given them.
new text end

new text begin (b) "Commercial goods transportation contractor" means any sole proprietor,
partnership, firm, corporation, limited liability company, association, or other legal entity
permitted by law to do business within the state that compensates commercial vehicle
drivers, couriers, or messengers who possess a state-issued commercial driver's license
to transport goods in Minnesota. Commercial goods transportation contractor includes a
general commercial goods transportation contractor or a commercial goods transportation
subcontractor.
new text end

new text begin (c) "Commercial goods transportation services" means the transportation of goods
for compensation by a commercial vehicle driver who possesses a state-issued commercial
driver's license and transports goods in Minnesota.
new text end

new text begin Subd. 2. new text end

new text begin Presumption of employment in commercial goods transportation
industry. new text end

new text begin An individual performing commercial goods transportation services for a
commercial goods transportation contractor is an employee, unless the person is a separate
business entity under subdivision 4 or is classified as an independent contractor under
subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Independent contractor. new text end

new text begin An individual is an independent contractor if:
new text end

new text begin (1) the individual is free from control and direction in performing the job, both
under contract and in fact;
new text end

new text begin (2) the service is performed outside the usual course of business for which the
service is performed; and
new text end

new text begin (3) the individual is customarily engaged in an independently established trade,
occupation, profession, or business that is similar to the service at issue.
new text end

new text begin Subd. 4. new text end

new text begin Separate business entity. new text end

new text begin A business entity, including any sole proprietor,
partnership, corporation, or entity that may be a commercial goods transportation
contractor under this section, shall be considered a separate business entity from the
commercial goods transportation contractor if all of the following criteria are met:
new text end

new text begin (1) the business entity is performing the service free from the direction or control
over the means and manner of providing the service, subject only to the right of the
commercial goods transportation contractor for whom the service is provided to specify
the desired result;
new text end

new text begin (2) the business entity is not subject to cancellation or destruction upon severance of
the relationship with the commercial goods transportation contractor;
new text end

new text begin (3) the business entity has a substantial investment of capital in the business entity
beyond ordinary tools and equipment and a personal vehicle;
new text end

new text begin (4) the business entity owns the capital goods and gains the profits and bears the
losses of the business entity;
new text end

new text begin (5) the business entity makes its services available to the general public or the
business community on a continuing basis;
new text end

new text begin (6) the business entity includes income from services rendered on a federal income
tax schedule as an independent business or profession;
new text end

new text begin (7) the business entity performs services for the commercial goods transportation
contractor under the business entity's name;
new text end

new text begin (8) when the services being provided require a license or permit, the business entity
obtains and pays for the license or permit in the business entity's name;
new text end

new text begin (9) the business entity furnishes the tools and equipment necessary to provide the
service;
new text end

new text begin (10) if necessary, the business entity hires its own employees without the commercial
goods transportation contractor's approval, pays the employees without reimbursement
from the commercial goods transportation contractor, and reports the employees' income
to the Internal Revenue Service;
new text end

new text begin (11) the commercial goods transportation contractor does not represent the business
entity as an employee of the commercial goods transportation contractor to its customers;
and
new text end

new text begin (12) the business entity has the right to perform similar services for others on
whatever basis and whenever it chooses.
new text end

new text begin Subd. 5. new text end

new text begin Notice. new text end

new text begin (a) Every commercial goods transportation contractor shall post
in a prominent and accessible place on the site where commercial goods transportation
activity is conducted a legible statement, provided by the commissioner, that describes the
responsibility of independent contractors to pay taxes required by state and federal law; the
rights of employees to workers' compensation, unemployment benefits, minimum wage,
overtime and other federal and state workplace protections; protections against retaliation;
and the penalties in paragraph (c) if the contractor fails to properly classify an individual
as an employee. The notice must also contain contact information for individuals to file
complaints or inquire with the commissioner about employment classification status.
This information shall be provided in English, Spanish, or other languages required by
the commissioner. The posted statement shall be constructed of materials capable of
withstanding adverse weather conditions.
new text end

new text begin (b) The commissioner shall create the notice and post it on the department's Web site
for downloading by commercial goods transportation contractors.
new text end

new text begin (c) Commercial goods transportation contractors who violate this section shall
be subject to a civil penalty of up to $1,500 for a first violation, and up to $5,000 for a
subsequent violation within a five-year period.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2014, and the
commissioner must post the notice required by Minnesota Statutes, section 176.043,
subdivision 5, paragraph (b), within 30 days of the effective date.
new text end