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July 19, 2012

New law requires construction contractors to register with the state

A new state law requires online registration for thousands of construction contractors.

This new law replaces the former independent contractor exemption certificate (ICEC) program with a simplified two-year pilot project for registration of construction contractors. It applies to individual or business entities that provide public- or private-sector commercial or residential building construction or improvement services in Minnesota.

An individual who provides construction services and seeks to be treated as an independent contractor must either have a current ICEC or must register with the Department of Labor and Industry (DLI). If a contractor currently has an ICEC, they will need to register when it expires. Construction companies must also register.

Registration is free and online at www.dli.mn.gov/Register. Construction contractors must register with DLI by Sept. 15, 2012.

An individual or business entity that performs building construction or improvement services must register with DLI unless they are required to have a current license, certificate or registration issued by DLI or are an employee of a business performing construction services.

Regardless of whether a contractor has a current ICEC or they register, a contractor cannot legally be treated as an independent contractor unless he or she meets the nine statutory conditions or "nine-factor test" in existing law.

Failure to complete the contractor registration online and to meet the nine-factor test will result in an individual being deemed an employee of the contractor for whom they are providing construction services. Contractors would then be responsible for those employees' workers' compensation and unemployment insurance coverage.

Contractors who hire unregistered subcontractors, misclassify workers and fail to register are in violation of the law, which can result in civil penalties.

For more information about DLI's Contractor Registration program, visit www.dli.mn.gov/Register, call
(651) 284-5074 or send an email message to dli.register@state.mn.us.

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News media contact:
Jenny O'Brien
(651) 284-5261

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