At the October CMBA Government Affairs Committee meeting (10/15), committee members heard from three Minnesota Department of Labor and Industry (DLI) officials responsible for implementing the new so-called "Worker Misclassification" law which impacts how we determine who is an independent contractor vs. employee. The bill passed during the 2024 Minnesota Legislative Session despite stiff opposition from CMBA and Housing First MN, and became law on July 1st, although parts of it will go into effect in March, 2025.

Guest presenters included three officials with the DLI Labor Standards Division: Jessica Grosz who directs the division; Michelle Fournier, DLI Labor Standards Supervisior; and Adam Case, DLI Associate General Counsel.  They ran through a slide presentation outlining the new law, and more details of the new 14-point test determining an independent contractor (the old list had 9 points), which DLI has yet to post on their web site.

CMBA members took the opportunity to express deep concerns about trying to comply, but potentially facing severe enforcement actions if they follow the incomplete information about the new law and are still found in violation.  DLI officials tried to assure CMBA the law is primarily targeted at large builders, and the 14-point test would not be fully implemented until March 2025. Jessica Grosz said she and her department are available to answer any questions or concerns (jessica.grosz@state.mn.us; michelle.fournier@state.mn.us).

"We certainly appreciated DLI joining our meeting to try and explain the lack of clarity in implementing this new independent contractor law," said CMBA Government Affairs Consultant, Steve Gottwalt. "But they did not really settle the concerns our members have about how this new law works, how it will practically impact their businesses and how to comply."

The general discussion among CMBA members was to continue doing what they "know is right" in working with sub-contractors, and potentially turning to legal counsel for compliance advice. CMBA is collaborating closely on this issue with our colleagues at Housing First MN who have indicated they may be taking stronger action to address negative impacts of the legislation.

Click Here for a copy of the DLI slide presentation. DLI has posted the most recent information about the new Independent Contractor law on their web site:  Click here.

Builders are also encouraged to contact DLI for more information at dli.laborstandards@state.mn.us, 651-284-5075 or 800-342-5354.

CMBA Government Affairs will continue closely tracking implementation of the new law and its impacts on CMBA members. 

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