Bill Text: MN HF2742 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Independent contract status of individuals in the trucking industry regulated.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-03-06 - Introduction and first reading, referred to Labor, Workplace and Regulated Industries [HF2742 Detail]
Download: Minnesota-2013-HF2742-Introduced.html
1.2relating to workers' compensation; regulating independent contract status of
1.3certain individuals in the trucking industry; imposing penalties;amending
1.4Minnesota Statutes 2012, section 176.043.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2012, section 176.043, is amended to read:
1.7176.043 TRUCKINGAND/DELIVERY/MESSENGER/COURIER
1.8INDUSTRIES; INDEPENDENT CONTRACTORS.
1.9 Subdivision 1. Definitions.In the trucking and messenger/courier industries, an
1.10operator of a car, van, truck, tractor, or truck-tractor that is licensed and registered by a
1.11governmental motor vehicle agency is an employee unless each of the following factors is
1.12present, and if each factor is present, the operator is an independent contractor:
1.13(1) the individual owns the equipment or holds it under a bona fide lease arrangement;
1.14(2) the individual is responsible for the maintenance of the equipment;
1.15(3) the individual is responsible for the operating costs, including fuel, repairs,
1.16supplies, vehicle insurance, and personal expenses. The individual may be paid the
1.17carrier's fuel surcharge and incidental costs, including, but not limited to, tolls, permits,
1.18and lumper fees;
1.19(4) the individual is responsible for supplying the necessary personal services
1.20to operate the equipment;
1.21(5) the individual's compensation is based on factors related to the work performed,
1.22such as a percentage of any schedule of rates, and not on the basis of the hours or time
1.23expended;
2.1(6) the individual substantially controls the means and manner of performing the
2.2services, in conformance with regulatory requirements and specifications of the shipper;
2.3and
2.4(7) the individual enters into a written contract that specifies the relationship to be
2.5that of an independent contractor and not that of an employee. (a) As used in this section,
2.6the terms defined in this subdivision have the meanings given them.
2.7(b) "Commercial goods transportation contractor" means any sole proprietor,
2.8partnership, firm, corporation, limited liability company, association, or other legal entity
2.9permitted by law to do business within the state that compensates commercial vehicle
2.10drivers, couriers, or messengers who possess a state-issued commercial driver's license
2.11to transport goods in Minnesota. Commercial goods transportation contractor includes a
2.12general commercial goods transportation contractor or a commercial goods transportation
2.13subcontractor.
2.14(c) "Commercial goods transportation services" means the transportation of goods
2.15for compensation by a commercial vehicle driver who possesses a state-issued commercial
2.16driver's license and transports goods in Minnesota.
2.17 Subd. 2. Presumption of employment in commercial goods transportation
2.18industry. An individual performing commercial goods transportation services for a
2.19commercial goods transportation contractor is an employee, unless the person is a separate
2.20business entity under subdivision 4 or is classified as an independent contractor under
2.21subdivision 3.
2.22 Subd. 3. Independent contractor. An individual is an independent contractor if:
2.23(1) the individual is free from control and direction in performing the job, both
2.24under contract and in fact;
2.25(2) the service is performed outside the usual course of business for which the
2.26service is performed; and
2.27(3) the individual is customarily engaged in an independently established trade,
2.28occupation, profession, or business that is similar to the service at issue.
2.29 Subd. 4. Separate business entity. A business entity, including any sole proprietor,
2.30partnership, corporation, or entity that may be a commercial goods transportation
2.31contractor under this section, shall be considered a separate business entity from the
2.32commercial goods transportation contractor if all of the following criteria are met:
2.33(1) the business entity is performing the service free from the direction or control
2.34over the means and manner of providing the service, subject only to the right of the
2.35commercial goods transportation contractor for whom the service is provided to specify
2.36the desired result;
3.1(2) the business entity is not subject to cancellation or destruction upon severance of
3.2the relationship with the commercial goods transportation contractor;
3.3(3) the business entity has a substantial investment of capital in the business entity
3.4beyond ordinary tools and equipment and a personal vehicle;
3.5(4) the business entity owns the capital goods and gains the profits and bears the
3.6losses of the business entity;
3.7(5) the business entity makes its services available to the general public or the
3.8business community on a continuing basis;
3.9(6) the business entity includes income from services rendered on a federal income
3.10tax schedule as an independent business or profession;
3.11(7) the business entity performs services for the commercial goods transportation
3.12contractor under the business entity's name;
3.13(8) when the services being provided require a license or permit, the business entity
3.14obtains and pays for the license or permit in the business entity's name;
3.15(9) the business entity furnishes the tools and equipment necessary to provide the
3.16service;
3.17(10) if necessary, the business entity hires its own employees without the commercial
3.18goods transportation contractor's approval, pays the employees without reimbursement
3.19from the commercial goods transportation contractor, and reports the employees' income
3.20to the Internal Revenue Service;
3.21(11) the commercial goods transportation contractor does not represent the business
3.22entity as an employee of the commercial goods transportation contractor to its customers;
3.23and
3.24(12) the business entity has the right to perform similar services for others on
3.25whatever basis and whenever it chooses.
3.26 Subd. 5. Notice. (a) Every commercial goods transportation contractor shall post
3.27in a prominent and accessible place on the site where commercial goods transportation
3.28activity is conducted a legible statement, provided by the commissioner, that describes the
3.29responsibility of independent contractors to pay taxes required by state and federal law; the
3.30rights of employees to workers' compensation, unemployment benefits, minimum wage,
3.31overtime and other federal and state workplace protections; protections against retaliation;
3.32and the penalties in paragraph (c) if the contractor fails to properly classify an individual
3.33as an employee. The notice must also contain contact information for individuals to file
3.34complaints or inquire with the commissioner about employment classification status.
3.35This information shall be provided in English, Spanish, or other languages required by
4.1the commissioner. The posted statement shall be constructed of materials capable of
4.2withstanding adverse weather conditions.
4.3(b) The commissioner shall create the notice and post it on the department's Web site
4.4for downloading by commercial goods transportation contractors.
4.5(c) Commercial goods transportation contractors who violate this section shall
4.6be subject to a civil penalty of up to $1,500 for a first violation, and up to $5,000 for a
4.7subsequent violation within a five-year period.
4.8EFFECTIVE DATE.This section is effective August 1, 2014, and the
4.9commissioner must post the notice required by Minnesota Statutes, section 176.043,
4.10subdivision 5, paragraph (b), within 30 days of the effective date.
1.3certain individuals in the trucking industry; imposing penalties;amending
1.4Minnesota Statutes 2012, section 176.043.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2012, section 176.043, is amended to read:
1.7176.043 TRUCKING
1.8INDUSTRIES; INDEPENDENT CONTRACTORS.
1.9 Subdivision 1. Definitions.
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21
1.22
1.23
2.1
2.2
2.3
2.4
2.5
2.6the terms defined in this subdivision have the meanings given them.
2.7(b) "Commercial goods transportation contractor" means any sole proprietor,
2.8partnership, firm, corporation, limited liability company, association, or other legal entity
2.9permitted by law to do business within the state that compensates commercial vehicle
2.10drivers, couriers, or messengers who possess a state-issued commercial driver's license
2.11to transport goods in Minnesota. Commercial goods transportation contractor includes a
2.12general commercial goods transportation contractor or a commercial goods transportation
2.13subcontractor.
2.14(c) "Commercial goods transportation services" means the transportation of goods
2.15for compensation by a commercial vehicle driver who possesses a state-issued commercial
2.16driver's license and transports goods in Minnesota.
2.17 Subd. 2. Presumption of employment in commercial goods transportation
2.18industry. An individual performing commercial goods transportation services for a
2.19commercial goods transportation contractor is an employee, unless the person is a separate
2.20business entity under subdivision 4 or is classified as an independent contractor under
2.21subdivision 3.
2.22 Subd. 3. Independent contractor. An individual is an independent contractor if:
2.23(1) the individual is free from control and direction in performing the job, both
2.24under contract and in fact;
2.25(2) the service is performed outside the usual course of business for which the
2.26service is performed; and
2.27(3) the individual is customarily engaged in an independently established trade,
2.28occupation, profession, or business that is similar to the service at issue.
2.29 Subd. 4. Separate business entity. A business entity, including any sole proprietor,
2.30partnership, corporation, or entity that may be a commercial goods transportation
2.31contractor under this section, shall be considered a separate business entity from the
2.32commercial goods transportation contractor if all of the following criteria are met:
2.33(1) the business entity is performing the service free from the direction or control
2.34over the means and manner of providing the service, subject only to the right of the
2.35commercial goods transportation contractor for whom the service is provided to specify
2.36the desired result;
3.1(2) the business entity is not subject to cancellation or destruction upon severance of
3.2the relationship with the commercial goods transportation contractor;
3.3(3) the business entity has a substantial investment of capital in the business entity
3.4beyond ordinary tools and equipment and a personal vehicle;
3.5(4) the business entity owns the capital goods and gains the profits and bears the
3.6losses of the business entity;
3.7(5) the business entity makes its services available to the general public or the
3.8business community on a continuing basis;
3.9(6) the business entity includes income from services rendered on a federal income
3.10tax schedule as an independent business or profession;
3.11(7) the business entity performs services for the commercial goods transportation
3.12contractor under the business entity's name;
3.13(8) when the services being provided require a license or permit, the business entity
3.14obtains and pays for the license or permit in the business entity's name;
3.15(9) the business entity furnishes the tools and equipment necessary to provide the
3.16service;
3.17(10) if necessary, the business entity hires its own employees without the commercial
3.18goods transportation contractor's approval, pays the employees without reimbursement
3.19from the commercial goods transportation contractor, and reports the employees' income
3.20to the Internal Revenue Service;
3.21(11) the commercial goods transportation contractor does not represent the business
3.22entity as an employee of the commercial goods transportation contractor to its customers;
3.23and
3.24(12) the business entity has the right to perform similar services for others on
3.25whatever basis and whenever it chooses.
3.26 Subd. 5. Notice. (a) Every commercial goods transportation contractor shall post
3.27in a prominent and accessible place on the site where commercial goods transportation
3.28activity is conducted a legible statement, provided by the commissioner, that describes the
3.29responsibility of independent contractors to pay taxes required by state and federal law; the
3.30rights of employees to workers' compensation, unemployment benefits, minimum wage,
3.31overtime and other federal and state workplace protections; protections against retaliation;
3.32and the penalties in paragraph (c) if the contractor fails to properly classify an individual
3.33as an employee. The notice must also contain contact information for individuals to file
3.34complaints or inquire with the commissioner about employment classification status.
3.35This information shall be provided in English, Spanish, or other languages required by
4.1the commissioner. The posted statement shall be constructed of materials capable of
4.2withstanding adverse weather conditions.
4.3(b) The commissioner shall create the notice and post it on the department's Web site
4.4for downloading by commercial goods transportation contractors.
4.5(c) Commercial goods transportation contractors who violate this section shall
4.6be subject to a civil penalty of up to $1,500 for a first violation, and up to $5,000 for a
4.7subsequent violation within a five-year period.
4.8EFFECTIVE DATE.This section is effective August 1, 2014, and the
4.9commissioner must post the notice required by Minnesota Statutes, section 176.043,
4.10subdivision 5, paragraph (b), within 30 days of the effective date.
