The Minnesota Court of Appeals heard arguments on September 16 in a case challenging the state’s new independent contractor law, which directly impacts how construction workers are classified. The hearing was held in St. Louis, Mo., and was presided over by Judges Duane Benton (a George W. Bush appointee), Stephen Graz (a Trump appointee), and Jonathon Kobes (a Trump appointee).
What the Law Does
The statute, Minn. Stat. § 181.723, establishes a 14-factor test to determine whether a worker is considered an independent contractor or an employee. This test is applicable only to the construction industry. Requirements include items such as signing a written contract within 30 days. Missing even one factor can trigger significant consequences, including:
- Reclassification of subcontractors’ employees as employees of the prime contractor.
- Administrative fines of up to $10,000 per violation.
- Potential misdemeanor treatment if violations are deemed criminal in nature.
Concerns from Trade Associations, Construction Industry Members
The groups appealing the statute argue that the law is:
- Unconstitutionally vague, making compliance nearly impossible.
- Excessively punitive, with disproportionate fines and penalties.
- Ambiguous, with unclear standards around contract terms, invoicing, and other requirements.
The associations have asked the court to block enforcement through a preliminary injunction.
What’s Next
The Court of Appeals will decide whether to uphold the lower court’s ruling or grant an injunction halting enforcement. Housing First Minnesota will continue monitoring this case closely, as the outcome could have major implications for contractors and subcontractors statewide.
