Nine-factor test for independent contractors in the construction industry

What are the nine criteria that must be met to be an independent contractor in the construction industry?

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An individual who performs public- or private-sector commercial or residential building construction or improvement services in Minnesota  is an independent contractor only if they meet all of the following requirements:

1. maintains a separate business with the individual's own office, equipment, 
   materials, and other facilities;

2. holds or has applied for a federal employer identification number or has filed business or self-employment income tax returns with the federal Internal Revenue Service if the individual has performed services in the previous year;

3. is operating under contract to perform the specific services for the person 
   for specific amounts of money and under which the individual controls the means of performing the services;

4. is incurring the main expenses related to the services that the individual is performing for the person under the contract;

5. is responsible for the satisfactory completion of the services that the individual has contracted to perform for the person and is liable for a failure to complete the services;

6. receives compensation from the person for the services performed under the contract on a commission or per-job or competitive bid basis and not on any other basis;

7. may realize a profit or suffer a loss under the contract to perform services for the person;

8. has continuing or recurring business liabilities or obligations; and

9. the success or failure of the individual's business depends on the relationship of business receipts to expenditures.

Questions?

Contact us at 651-284-5074 or dli.register@state.mn.us.