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Work comp: Independent contractor or employee

The following information contains general information, subject to statutory change, and is not legal advice.

The Minnesota Workers' Compensation Act, Minnesota Statutes Chapter 176, does not contain a definition of "independent contractor." Case law provided the initial factors to be used in determining independent contractor status. Those tests have now been supplemented by statutes and administrative rules governing many categories of independent contractors.

Building construction and improvement

Determination of independent contractor status for individuals providing or performing building construction or improvement services is governed by Minnesota Statutes section 181.723. The statute was amended in 2024.

Nine-factor test:  An individual who provides or performs commercial or residential building construction or improvement services on or before Feb. 28, 2025, in the course of the person's trade, business, profession or occupation is an employee unless the individual meets all nine factors specified in Minnesota Statutes section 181.723, subd. 4.

Fourteen-factor test:  An individual who provides or performs commercial or residential building construction or improvement services on or after March 1, 2025, in the course of the person's trade, business, profession or occupation is an employee unless the individual is operating as a business entity and meets the updated 14 factors specified in Minnesota Statutes, section 181.723, subd. 4.

Trucking and messenger or courier

An individual operating a car, van, truck, tractor or truck-tractor that is licensed and registered by a governmental motor-vehicle agency is an employee unless all seven factors specificed in Minnesota Statutes section 176.043 are present.

Other occupations

Minnesota Rules, chapter 5224, contains guidelines for asserting independent contractor or employee status for 31 specific occupations. The rules define the occupation and list criteria that must be substantially met for the person in that occupation to be characterized as either an independent contractor or employee. If all the criteria are not met or the occupation is not defined in chapter 5224, Minnesota Rules, parts 5224.0320 through 5224.0340, provide general criteria and factors to evaluate whether the person is an independent contractor or employee.

Note on artisans and laborers:  The factors in Minnesota Statutes section 181.723, rather than Minnesota Rules, parts 5224.0020 and 5224.0110, govern the independent contractor status of artisans and laborers providing commercial or residential building construction or improvement services as defined in Minnesota Statutes 181.723, subd. 2.

Law prior to 1986

A five-factor test was developed through case law that analyzes the employment relationship concerning the appropriate characterization of independent contractor or employee.

The test involves analyzing the following five factors:

  1. the right to control the means and manner of performance;

  2. the mode of payment;

  3. the furnishing of tools and materials;

  4. control over the premises where the work was done; and

  5. the right of discharge.

Gulke v. Roberts Truck Lines, 128 N.W.2d 324 (Minn. 1964).

While all five factors are considered, the degree of control one party has the right to exert over another is the primary factor to consider.

More information

Questions?

For questions about workers' compensation and independent contractor status, contact the Department of Labor and Indsutry's (DLI's) Workers' Compensation Help Desk.

For questions about construction contractor registration, contact DLI at 651-284-5074 or dli.register@state.mn.us.