A Guide To STARTING A BUSINESS IN MINNESOTA 42nd Ed 2024

• Federal income, withholding and FICA (Social Security and Medicare) tax: Publication 15 (Circular E) Employer’s Tax Guide ; Publication 15-A, Employer’s Supplemental Tax Guide (Supplement to Pub. 15, Employer’s Tax Guide); and Publication 1779, Employee or Independent Contractor. The IRS also offers Small Business Virtual Tax Workshop, an online resource for business owners who are not sure if they have employees or independent contractors. Also refer to Independent Contractor (Self-Employed) or Employee?. • Minnesota income tax: See Withholding Tax and Minnesota Income Tax Withholding -Instruction Booklet and Tax Tables. Also refer to the Minnesota Department of Revenue Independent Contractor or Employee -Withholding Fact Sheet 8. This fact sheet explains Minnesota income tax withholding responsibilities as they relate to classification of independent contractors. • Workers' Compensation: Information on the Minnesota Worker’s Compensation System is available from the Minnesota Department of Labor and Industry at Workers’ Compensation - Businesses. The Department has adopted rules addressing the conditions under which workers will be considered employees or independent contractors for workers’ compensation purposes. These rules can be found at Minnesota Rules Chapter 5224. Minnesota Rules are available at Office of the Revisor of Statutes, at law libraries, and many public libraries. The Department has information regarding Contractor Registration -Nine-Factor Test. • Federal Fair Labor Standards Act: U.S. Department of Labor, Wage and Hour Division Wages and the Fair Labor Standards Act. • Minnesota Fair Labor Standards Act: Minnesota Department of Labor and Industry, Labor Standards Division. • Human Rights: Minnesota Department of Human Rights.

EMPLOYMENT AGREEMENTS

EMPLOYMENT AT WILL The doctrine of employment at will generally states that an employment relationship may be terminated at any time by either party. In the absence of a collective bargaining agreement or other contract, the employer may discharge an employee at any time for any legal reason, or for no reason, with or without notice. Likewise, the employee may resign at any time for any reason, with or without notice. Minnesota follows this general rule.

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