Minnesota enacted the Wage Theft Prevention Act in 2019. This legislation continues to significantly transform the traditional way many construction businesses operate. Most contractors’ business models favor the scalability and flexibility of using independent subcontractors instead of employees. By passing the Wage Theft Prevention Act, Minnesota law is focusing on how construction laborers are classified based on differing treatments and benefits between employees and subcontractors, and the perception that employee status is preferred. This policy shift is causing significant employment legal issues.
If you are a Minnesota construction business, you need to be certain you are properly differentiating your employees from your subcontractors in compliance with Minnesota’s regulations. This includes keeping correct documentation, understanding the different benefits, and knowing when a subcontractor should be considered an employee. We can evaluate and advise your business on how to follow Minnesota’s construction employment laws. We will make sure you are properly classifying employees to eliminate the risk of costly and destructive employment legal issues.
KNOW MINNESOTA’S LAWS AND AVOID COSTLY EMPLOYEE LEGAL ISSUES
Differentiate between your employees and independent contractors
Stay in line with Minnesota’s employment laws and regulations
What is our process?
We want to understand how you define a successful outcome. For transactional issues, what are the important issues that need to be addressed in the document we are drafting? For disputes, what is the desired resolution or outcome?
Step One: Learn your objectives and goals
For transactional, we draft a document that will achieve the desired outcome and reflect the client’s business. For disputes, we uphold the obligations stated in the contracts and/or determine reasonable remedies for issues not addressed in the contract.
Step Three: Craft the strategy
For transactional, what have the parties agreed to and has an agreement been reached on all the key issues? For disputes, we need to know whether the contract addresses the issue, how it was addressed, who’s at fault, and what damages resulted
Step Two: Understand your concerns and issues
Following the strategy developed with and approved by the client, we move to achieve the intended result. Whether drafting a document or resolving a dispute, we’ll keep you informed on how things are going so you can focus on your business.
Step Four: Implement the remedy
If an employee is misclassified, meaning an independent contractor is determined to be an employee according to Minnesota law, the employer and business owner may be criminally liable for the misclassified employee’s unpaid withholding taxes and benefits. It is a very serious offense that can cause a major business disruption. To protect your business from a misclassification claim and other employment issues, you need to implement specific procedures and measures that follow Minnesota’s employment laws.
Start by defining the tasks the employee will be responsible for and the skills the person needs to have. Create a detailed job description, then interview candidates. When you’re ready to make an offer, follow Minnesota’s New Employee Notice requirement and create an employee handbook that clearly describes the company’s employment policies. Provide each new hire with a copy of their New Employee Notice and the handbook, and keep a copy of the signed receipt for three years. You should keep specific records throughout the employment process to protect your business from potential employment issues.
Terminating an employee is very different than terminating a relationship with an independent contractor. Most employees in Minnesota are employees-at-will, meaning there is no employment contract. Most independent contractors have a contract that defines the relationship and dictates how the contract can be terminated.
We help you make sure the termination process is done properly without risking employer-employee issues. This includes understanding the outcome possibilities of terminating the employee or independent contractor so you can make the best decision.
Whether it’s federal law or the Governor’s executive orders, we are well-versed in the ever-changing regulations arising out of the COVID-19 pandemic and its impact on the construction industry, including employment issues. We will guide you through the process so you can confidently understand your rights and responsibilities.