From JDSupra, Katherine Gordon and Tareen Zafrullah share local and state employment law updates including a change to the definition of independent contractor in the St. Paul Earned Sick and Safe Time ordinance. Katherine and Tareeen write:
St. Paul
Sick and Safe Leave: Effective June 24, 2023, St. Paul amended its paid sick leave administrative rules to align with the St. Paul Earned Sick and Safe Time (ESST) Ordinance. The amended rules define independent contractor and year, as well as specifying employee documentation requirements, temporary worker sick leave coverage, and accrual and carryover requirements for earned sick and safe time.
Source: State & Local Employment Law Developments: Q2 2023 | Faegre Drinker Biddle & Reath LLP – JDSupra
The Earned Sick and Safe Time (ESST) Ordinance defines an independent contractor in Sec. 233.02. – Definitions.
Independent contractor has the meaning defined in the Labor and Industry Chapters of the Minn. Stats. §§ 181.723 and 176.042, as defined in Minnesota Rules Chapter 5224, or as defined in any subsequent related statutes or rules.
Minnesota Statute §181.723 defines an independent contractor as
Subd. 4.Independent contractor.
(a) An individual is an independent contractor and not an employee of the person for whom the individual is performing services in the course of the person’s trade, business, profession, or occupation only if the individual:(1) maintains a separate business with the individual’s own office, equipment, materials, and other facilities;
(2)(i) holds or has applied for a federal employer identification number or (ii) 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.
An individual who is not registered, if required by section 326B.701, is presumed to be an employee of a person for whom the individual performs services in the course of the person’s trade, business, profession, or occupation. The person for whom the services were performed may rebut this presumption by showing that the unregistered individual met all nine factors in this paragraph at the time the services were performed.
(b) If an individual is an owner or partial owner of a business entity, the individual is an employee of the person for whom the individual is performing services in the course of the person’s trade, business, profession, or occupation, and is not an employee of the business entity in which the individual has an ownership interest, unless:
(1) the business entity meets the nine factors in paragraph (a);
(2) invoices and payments are in the name of the business entity; and
(3) the business entity is registered with the secretary of state, if required.
If the business entity in which the individual has an ownership interest is not registered, if required by section 326B.701, the individual is presumed to be an employee of a person for whom the individual performs services and not an employee of the business entity in which the individual has an ownership interest. The person for whom the services were performed may rebut the presumption by showing that the business entity met the requirements of clauses (1) to (3) at the time the services were performed.
