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1. Business Independence – The business entity must be established and maintained separately from the contractor hiring it and must provide services to multiple clients or the general public.
2. Operational Capacity – The business entity must own or lease tools, equipment, vehicles, or facilities necessary to perform the work.
3. Legal and Tax Compliance – The business entity must hold any required MN or federal tax ID numbers, receive and retain Form 1099s when applicable, file business or self-employment tax returns, and provide a W-9 when required.
4. Regulatory Compliance – The business entity must carry workers’ compensation insurance (if required), a Minnesota unemployment insurance account (if required), and any required business licenses and certifications.
5. Contractual Requirements – The business entity must perform work under a signed and dated “written contract" that is “fully executed” within 30 days of starting work, “identifies the specific services to be provided or performed,” and “provides for compensation from the person for the services provided under the contract on a commission, per-job, or competitive bid basis.”
6. Payment and Invoicing – Payment must be made only upon invoices submitted in the name of the business. Cash payments do not qualify.
7. Control and responsibility – The contract must give the business entity control over the means and methods of performance, and the entity must be responsible for completion of the work and liable if it is not completed.
8. Risk of Profit or Loss –&�Բ�����;The entity must be able to realize a profit or suffer a loss depending on performance and expenses.

Failure to satisfy any one of the 14 factors results in the worker being classified as an “employee” rather than an independent contractor under Minnesota law. The Minnesota Department of Labor and Industry (“DLI”) and the Minnesota Attorney General have enforcement authority. There also is a private right of action, through which a misclassified individual may seek compensatory damages.

• Up to $10,000 per misclassified worker
• Up to $10,000 per violation of the law’s disclosure and classification requirements

• A penalty of $1,000 per day for obstructing a Minnesota DLI investigation. Individuals who knowingly or repeatedly engage in any of the prohibited activities may also be held liable.