Penalties can be up to $10,000 for each misclassification and each violation , plus penalties of up to $1,000 for each person who fails to cooperate with or obstructs an investigation into violations. Misclassified individuals may also be entitled to compensatory damages. These enforcement tools significantly raise the stakes for correct classification. Independent contractors in the trucking and messenger/courier industries Minn. Stat. § 176.043 sets out seven criteria—all of which must be met—for an operator in the trucking and messenger/courier industries to be considered an independent contractor rather
than an employee. These criteria include, among others: • Ownership or bona fide lease of the equipment used. • Responsibility for equipment maintenance and operating costs.
• Responsibility for providing the personal services necessary to operate the equipment. • Substantial control by the worker over the means and manner of service performance. • A written contract specifying that the relationship is one of independent contractor, not employee. Employers in these industries should review the statute and consult counsel to ensure compliance. Further information In addition to seeking advice from qualified professionals, employers can obtain more detailed guidance from: • 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 Independent Contractor (Self-Employed) or Employee?. • Minnesota income tax withholding : Minnesota Income Tax Withholding Instruction Booklet and Tax Tables. Also refer to the Minnesota Department of Revenue Withholding Fact Sheet 8, Independent Contractor or Employee, which explains withholding responsibilities tied to classification. • Workers’ compensation : Minnesota Department of Labor and Industry, Workers’ Compensation and Minnesota Rules Chapter 5224 (employee vs. independent contractor tests). • Federal Fair Labor Standards Act : U.S. Department of Labor, Wage and Hour Division resources on Wages and the FLSA. • Minnesota Fair Labor Standards Act and labor standards: Minnesota Department of Labor and Industry, Labor Standards. • Human rights and anti‑discrimination: Minnesota Department of Human Rights . Contact information for these agencies and resources is provided in the Resource Directory section of this Guide, and the “Checklist for Hiring an Employee” later in this Guide can be used together with this section when onboarding workers.
138
Made with FlippingBook - Online Brochure Maker