MN Workers’ Comp: Independent Contractor or Employee?

In Minnesota, independent contractors are NOT covered for workers’ compensation benefits, including medical benefits, wage loss benefits, permanency benefits, or rehabilitation benefits. Employees, on the other hand, ARE covered for workers’ compensation.

In Minnesota, all employers are required by law to carry workers’ compensation insurance to cover their employees in the event of a work-related injury. The MN Department of Labor and Industry has a search tool to look up whether your employer carries legally-required workers’ compensation insurance.

If you’re an independent contractor and you sustain a serious on-the-job injury, medical bills and loss of income after a work injury can be financially devastating. That’s why it’s absolutely critical to have an experienced workers’ compensation attorney evaluate your case if you’re not sure whether you are an independent contractor or an employee.

Even if your employer tells you that you’re an independent contractor rather than an employee, you may still be covered for workers’ compensation. A determination as to whether you qualify as an “employee” or an “independent contractor” for purposes of workers’ compensation is a legal question that requires analysis of several different factors.

Just because your employer says you are an independent contractor doesn’t mean it’s true under the law. In fact, employers often have financial incentive to designate its employees as “independent contractors,” even though they don’t meet the legal definition for “independent contractors.” First, employers avoid paying social security and federal and state taxes for independent contractors. They also avoid contributing to state unemployment, and federal Medicare contributions. Employers in some industries may also classify their employees as independent contractors to avoid having to pay for workers’ compensation insurance coverage.

Depending on the industry you are working in, there are different factors that are analyzed in making a determination as to whether you are an independent contractor or an employee.

Don’t rely on your employer to tell you what your legal classification is! We routinely meet with employees who are hurt on the job who are told that they are independent contractors, so they are on their own for medical bills or wage loss following an injury.

Some industries where this problem is most prevalent include: 

• Residential and commercial construction 
• Roofing 
• Landscaping 
• Telecommunications installation and sales 
• Appliance sales, delivery and installation 
• Sales 
• Collections 
• Delivery 
• Couriers 
• Drivers 

If you were hurt on the job and you don’t know whether you’re an independent contractor or an employee, contact Meuser & Associate for a free, no-obligation case evaluation. Call us at 877-746-5680 or click here to send us an email to schedule a time to speak with Jen Yackley or Ron Meuser about your rights.

Top Four Construction Injury Hazards

According to OSHA, the top four causes of construction fatalities are 1) falls, 2) being struck by objects, 3) being caught in confined spaces or between objects, and 4) electrocutions.

Here are some simple tips to avoid these hazards: 

Preventing Injuries from Falls

• Employees should wear and use personal fall arrest equipment.
• Employers should ensure that perimeter protection is installed and maintained.
• Floor openings should be covered, secured, and labeled.
• Employee should use ladders and scaffolds safely.

Preventing Injuries from Being Struck by an Object

• An employee should avoid positioning him or herself between moving and fixed objects.
• Employees should wear high-visibility clothing near equipment and vehicles.

Preventing Injuries from Being Caught In Confined Spaces or Between Objects

• Employee should not enter an unprotected trench or excavation five feet or deeper without an adequate protective system.
• Employers should make sure trenches or excavations are protected either by sloping, shoring, benching or trench shield systems.

Preventing Injuries from Electrocutions

• Employees and employers should locate and identify utilities before starting work.
• Employees should look for overhead power lines when operating any equipment.
• Employees should maintain a safe distance away from power lines and learn the safe distance requirements.
• Employees should not operate portable electric tools unless they are grounded or double insulated.
• Ground-fault circuit interrupters should be used for protection.
• Employees should be alert to electrical hazards when working with ladders, scaffolds or other platforms.

When a construction worker is injured on a job site, it often raises unique issues under the Minnesota workers’ compensation law. For example, there may be a dispute as to whether the worker is an independent contractor or an employee. Independent contractors are not covered by workers’ compensation in Minnesota, but employees are covered. Another rule unique to the construction industry is that if an employee is injured, and the subcontractor-employer is uninsured for workers’ compensation, the general contractor may be liable for workers’ compensation benefits. A third issue that frequently arises when a construction worker sustains injury is determining whether there is a liability claim against a negligent third party, in addition to a claim for workers’ compensation benefits.

If you’ve sustained a work-related construction injury, you should speak with a workers’ compensation lawyer to learn how to protect your Minnesota workers’ compensation rights, and to explore any potential rights you have to make a third-party liability claim to compensate you for your injuries. For a free, no-obligation consultation with one of our workers' compensation lawyers, contact Meuser & Associates at 877-746-5680, or click here to send us an email.

Are You Really an Independent Contractor? Construction Workers and Minnesota Workers’ Compensation

Effective January 1, 2009, the Minnesota legislature changed the law as it pertains to defining who is an “independent contractor” in the construction trades for purposes of workers’ compensation, unemployment, income tax, and other laws.

In order to be considered an “independent contractor” under the new statute, an individual construction worker must hold a valid Independent Contractor Exemption Certificate, and meet nine additional factors:

1. maintains a separate business with the individual'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 if the person has performed services in the previous year for which the individual is seeking the independent contractor exemption certificate;
3. operates under contracts to perform specific services for specific amounts of money and under which the individual controls the means of performing the services;
4. incurs the main expenses related to the service that the individual performs under contract;
5. is responsible for the satisfactory completion of services that the individual contracts to perform and is liable for a failure to complete the service;
6. receives compensation for 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 service;
8. has continuing or recurring business liabilities or obligations;
9. the success or failure of the individual's business depends on the relationship of business receipts to expenditures.

Most paid-per-hour construction laborers will not meet these factors.

Under Minnesota Workers’ compensation law, a construction worker who is an independent contractor who is hurt on the job is not eligible for workers’ compensation benefits, including medical benefits, wage loss benefits, permanency benefits, and rehabilitation/retraining benefits.
Unfortunately, due to the economic crash, particularly in the housing market, commercial and residential construction contractors are suffering financially. Some less scrupulous contractors, in an effort to cut cost corners, are hiring construction laborers, and calling them “independent contractors.” They do this so as to avoid paying for workers’ compensation insurance, income tax, unemployment tax, and complying with certain OSHA requirements. With so many construction workers out of work for the last couple years, more and more are forced to look to these less reputable contractors for employment.

I routinely see advertisements for construction workers wanted on Craigslist that require you to agree that you will be an “independent contractor,” although it is pretty clear that you’d actually be an employee under the law. Here’s a couple examples:

Concrete and repairs (SW Hennepin County)
Small concrete company looking for good people. Must show pride in workmanship and be dependable. Need to be independent contractor with EIN, but can help get you started. Must live close by. Flat work experience a plus, can train for ICFs and decorative. My interviews take a day or two of work; try it see if you like it and are a fit for our small crew. You will be paid cash for the day or two. If it works out compensation is flexible.

Painter (Entire metro)
Im looking for a painter for some part time possibly full time work. Need to have an LLC. Let me know what you have for experience, tools, vehicle, what part of town you live in and wage desired. Thanks.

Shingler or Clean up guy ASAP Join a Crew (Stillwater)
We are looking for an experienced shingler to join our crew or a guy for tear off and clean up. Unexperienced will get $15.00/hr. and experienced roofer with get $20.00/hr. Must have valid drivers lic. with own transportation. Must have General Liability insurance must be LLC, Inc, or have your independent contractor exemption certificate. Please email or call 651-***-****.

Independent framers needed (Edina/Chaska)
I still have a need for more framing carpenters, must have your own insurance, the only tools you need is your tool belt. You can start tomorrow. Please send your company info and compensation requirements.

PROCEED WITH CAUTION. I have personally seen several construction contractors in the Twin Cities Metro area trying to get new hires to sign paperwork stating that they are independent contractors, and that they are either a LLC (Limited Liability Corporation), or that they have an Independent Contractors Exemption Certificate from the Minnesota Department of Labor and Industry. In order to be considered an independent contractor for purposes of workers’ compensation, and other laws, a construction worker MUST have an Independent Contractors Exemption Certificate. In fact, state law prohibits working as an independent contractor unless you have first obtained the Exemption Certificate. The law also prohibits a person from hiring a someone as an “independent contractor” unless they have the Independent Contractors Exemption Certificate.

Now, let’s say you suffer an injury working for one of these unscrupulous contractors. You don’t have an Independent Contractors Exemption Certificate because you won’t qualify for one, but your employer makes you sign something stating that you are an independent contractor. Are you out of luck? No, I don’t think so.

Several of the forms I’ve seen contractors using to try to get around this law require the applicant to affirm that he or she does have an Independent Contractors Exemption Certificate. The law, however, requires the person hiring the “independent contractor” to retain a copy of the person’s Exemption Certificate for five years. So, if the hiring contractor never asks to actually see a copy of your Exemption Certificate, or checks the Department of Labor and Industry website to see if you are listed as a valid Exemption Certificate holder, it’s pretty hard for them to claim after the fact that they thought you really did have an Exemption Certificate when you did not.

Since this law is relatively new, there’s little case law guidance to tell us workers’ compensation lawyers how a workers’ compensation judge would decide such a case. I’m inclined to think that most construction workers in this situation would be considered employees for purposes of Minnesota workers’ compensation law, which means you would be entitled to benefits if you sustain an on-the-job injury.

To read more about the requirements for the Independent Contractor Exemption Certificate, check out the following:

1. Minnesota Statute §181.723
2. Fact Sheet from the MN Department of Labor & Industry
3. My previous post on this topic
4. The Independent Contractor Exemption Certificate application form
5. Brochure from the MN Department of Labor & Industry
6. FAQ from the Department of Labor & Industry
7. Factsheet from the Dept. of Labor & Industry

These bad economic times have hit the construction industry particularly hard. Hundreds and hundreds of skilled Minnesota construction workers have been out of work for a long time. As tempting as it is to take a job through one of these companies that try to get around the new Independent Contractor rules, keep in mind that it is against the law. Moreover, $10.00 cash per hour is probably not worth it, if you are actually complying with the law, i.e., reporting your earnings and paying the full state and federal tax on your earnings, paying unemployment compensation, paying social security, paying for workers’ compensation insurance, and paying for liability insurance. Moreover, it’s probably not worth risking the fines you may be subjecting yourself to if you get caught working as an independent contractor without a valid certificate, risking a serious on-the-job injury with questionable workers’ compensation coverage, risking tax penalties, or risking a lawsuit with no insurance when the contractor gets sued for something.

That being said, if you were hurt doing residential or commercial construction work after January 1, 2009, and you were told by your employer that you were an “independent contractor,” so you couldn’t make a claim for workers’ compensation benefits, you should definitely contact a Minnesota workers’ compensation lawyer.

For a free, confidential, no-obligation, consultation with one of our lawyers to see if you have a workers’ compensation claim for on-the-job injuries you sustained doing residential or commercial construction as an “independent contractor,” call Meuser & Associates at 877-746-5680 or click here to send us an email.

Visit us at MeuserLaw.com to learn more about Minnesota Workers' Compensation.

Construction Worker Injuries and Minnesota Injury Law

As the weather grows warmer here in Minnesota, demand for construction workers will increase. Unfortunately, as construction increases during the Spring and Summer months, so do construction injuries. Construction workers, including framers, siders, roofers, painters, electricians, plumbers, welders, installers, concrete workers, and steel workers are all at high risk for work-related injuries. Construction workers and skilled laborers and tradesman should be aware of their rights if they are injured while working on a construction job.

On any given day, nearly 6.5 million people work at approximately 252,000 construction sites. Unfortunately, the fatal injury rate in the construction industry is much higher than the national average for all other industries. In 2007, there were 441 work-related construction worker deaths, and there were 39 construction worker fatalities in Minnesota. Construction has about 8% of U.S. workers, but 22% of the fatalities - the largest number of fatalities reported for any of the industry sectors.

Common Hazards for Construction Workers

Some common potential hazards for workers in the construction industry include:

• Falls from ladders
• Falls from roofs
• Falls from scaffolding
• Scaffolding collapses
• Trench collapses
• Electric shocks
• Arc flashes/arc blasts
• Repetitive motion injuries
• Foreign objects in eyes
• Chemical exposure to the eyes or skin
• Injuries from falling objects
• Puncture wounds
• Hand and foot crush injuries
• Respiratory exposure to toxic fumes or chemicals
• Burns
• Lifting injuries
• Structural collapses
• Crane accidents
• Forklift accidents
• Backhoe accidents
• Frontloader accidents
• Elevator shaft falls
• Occupational hearing loss
• Heavy equipment accidents
• Motor vehicle accidents
• Power line accidents
• Compressed gas explosions
• Power tool accidents
• Lead poisoning
• Derrick accidents
• Falls through skylights and floor openings
• Boom collapses
• Hoist accidents
• Conveyor accidents
• Crane tip-overs
• Saw accidents
• Sander accidents
• Over-exertion injuries
• Polisher accidents
• Exposure to asphalt fumes
• Skid steer loader accidents
• Hoist accidents
• Falls from telecommunication towers
• Winch accidents
• Excavation cave-ins
• Grater accidents
• Carbon monoxide poisoning
• Scraper accidents
• Tractor accidents
• Silica dust exposure
• Bobcat accidents
• Bulldozer accidents
• Boiler accidents and explosions
• Gas explosions
• Foundation collapses
• Nail gun accidents
• Air compression accidents
  

Minnesota construction workers who are injured on the job are often entitled to workers’ compensation benefits, including medical expense benefits, wage loss benefits, permanency benefits, and rehabilitation or retraining benefits. If a construction worker is killed as the result of his or her construction work activities, his or her survivors may be entitled to death and dependency workers’ compensation benefits.

“Independent Contractors” or Employees?

Unfortunately, many construction workers incorrectly believe that they are “independent contractors” who are generally not entitled to Minnesota workers’ compensation benefits. In many, many cases, a construction worker who has been labeled as an “independent contractor” by his or her employer is actually an employee under Minnesota law. That means they are entitled to workers’ compensation benefits.

Effective January 2009, the Minnesota legislature passed a law requiring “independent contractors” to obtain an Independent Contractor Exemption Certificate, among other things. If a so-called “independent contractor” is injured on a construction job in Minnesota after January 2009, and does not have an Exemption Certificate, he or she is considered an employee for purposes of workers’ compensation. Even if a construction worker has obtained an Exemption Certificate, there are several other factors that must also be met in order for an employee to be considered an “independent contractor” for purposes of Minnesota workers’ compensation.
Even prior to 2009, for a construction worker to be considered an “independent contractor,” a series of several factors had to be satisfied. Otherwise, the injured worker was considered an employee for purposes of Minnesota workers’ compensation.

If you are a construction worker who was hurt on the job, and you’re unsure whether or not you’re an “independent contractor,” we are happy to provide a free, no-obligation consultation. Call Meuser & Associates at 877-746-5680 or click here to send us an email. Unfortunately, if there is any question as to whether you are an employee or an independent contractor, it is almost guaranteed that the workers’ compensation insurance company will deny your claim.

Uninsured Subcontractors

Generally, an employer is liable only for workers’ compensation benefits to its own employees. However, there is one major exception to this rule which is unique to the construction industry. Where a subcontractor fails to obtain workers’ compensation coverage, the general or intermediate contractor is liable for workers’ compensation benefits to an injured employee, if the subcontractor is working on the subject matter of the subcontract. What this means is that if you are an employee of a subcontractor, and your employer failed to carry workers’ compensation, the general contractor on the job may be responsible for workers’ compensation benefits if you are hurt on the job.

If you are hurt on the job, and your employer is a subcontractor that has no workers’ compensation insurance coverage, you may be covered by the general contractor’s workers’ comp. insurance. Unfortunately, it is almost guaranteed that the general contractor’s insurance company is not going to want to pay your claim. You will probably be in for a fight to get the workers’ compensation benefits you are entitled to. We’ve successfully represented many construction workers in situations like this. Call Meuser & Associates at 877-746-5680 or click here to send us an email to schedule a free, no-obligation consultation with one of our workers' compensation lawyers.

Uninsured Employers and Workers’ Compensation Benefits

Unfortunately, especially in this horrible economic climate, many small construction companies don’t carry workers’ compensation insurance, in an effort to cut costs. If you are a construction worker injured on the job and your employer has no insurance, you may still be entitled to workers’ compensation benefits, including medical expense benefits, wage loss benefits, permanency benefits, and rehabilitation and/or retraining benefits. The Minnesota Special Compensation Fund pays workers’ compensation benefits when an employee is injured on the job, but the employer has no workers’ compensation insurance. The uninsured employer does not get by for free in this situation, however. Employers are required by law to carry workers’ compensation insurance to cover their employees. If an employee is injured and the Special Compensation Fund has to pay for that employee’s benefits, the uninsured employer has to reimburse the Special Compensation Fund, and it may also be liable for fines and penalties.

Securing workers’ compensation benefits from the Minnesota Special Compensation Fund when the employer had no insurance is a relatively complex process. The Special Comp Fund treats claims just like a insurance company does, which means they may deny your claim just like a regular insurance company. If your employer had no insurance, you are well advised to contact an experienced workers’ compensation lawyer to help you secure work comp. benefits. Call Meuser & Associates at 877-746-5680 or click here to send us an email to schedule a free, no-obligation consultation with a workers' comp. lawyer.

Third-Party Liability Claims

In addition to workers’ compensation benefits, injured construction workers frequently have third-party liability claims against third parties. Often, injuries to construction workers and job site accidents are caused by the negligence or carelessness of third parties. In any case where a construction worker’s injuries are caused by a third party, other than the employer or a co-worker, there may be a civil case against the third party. Common examples include motor vehicle accidents, accidents caused by other subcontractors, and accidents caused by the negligence of a property manager or owner. While Minnesota workers’ compensation provides some wage loss benefits, some permanency benefits, and some other monetary benefits, generally, civil claims allow an injured person to claim much greater damages, such as greater wage loss, future medical expenses, pain and suffering, and loss of enjoyment of life.

A lawyer representing a construction worker injured on a construction site should always investigate the facts of a case to determine whether there is a potential civil claim against a third party. Unfortunately, some lawyers practice only workers’ compensation law, or only personal injury law. Lawyers who practice only personal injury law may not be able to effectively handle your workers’ compensation case. Conversely, lawyers who practice only workers’ compensation law may not recognize your civil case, and may not be able to effectively handle it. In that case, you might need two lawyers to deal with your one accident. The lawyers at Meuser & Associates practice both workers’ compensation and personal injury law, so we know how to do both, and we can handle both aspects of your case, eliminating the need to hire two different lawyers. Call us today at 877-746-5680 or click here to send us an email to schedule a free, no-obligation consultation.

Visit Minnesota Workers' Compensation and Personal Injury Law Firm, Meuser & Associates, P.A., at MeuserLaw.com

Independent Contractor Status in the Construction Industry and Minnesota Workers' Compensation

As a general rule, "independent contractors" are not covered by workers' compensation. In many industries, particularly the construction industry, workers are improperly classified as "independent contractors" rather than as "employees."

By improperly classifying workers, some businesses effectively avoid paying for workers' compensation coverage, for income taxes, and for unemployment insurance. Improper classification also often leaves workers without benefits they are rightfully entitled to.

Unfortunately, many individuals who work in residential or commercial construction are told that they are independent contractors despite the fact that they should actually be classified as employees. If a worker who is improperly classified as an independent contractor is injured on the job, that person may not receive workers' compensation benefits they are entitled to.

Contrary to popular belief, just because your employer says you are an "independent contractor" does not mean you actually are one. In fact, effective January 2009, to be considered an independent contractor under Minnesota law within the residential or commercial construction industry, an individual must obtain an Independent Contractor Exemption Certificate, and that individual must meet a nine-factor test as well. Click here to read the new law.

Even prior to the enactment of this new statute, Minnesota law established very strict criteria in order to qualify as an independent contractor rather than an employee for purposes of workers' compensation.

If you are a construction worker who was injured on the job and you're not sure if you are an independent contractor, call Meuser & Associates at 877-746-5680 to schedule a free consultation or click here to send us an e-mail. We can help you get the work comp. benefits you deserve.

Visit our workers' compensation website at MeuserLaw.com!