Under Minnesota law, the most important factor in determining whether an individual is an independent contractor or an employee is the degree of control which the purported employer exerts over the manner and method of performing the work contracted.  The more control there is, the more likely the person is an employee and not an independent contractor.  The total circumstances, including the practices and the customs of the industry, must be considered to determine if control is present.
In addition to the criteria listed here, courts may consider the following criteria when determining whether the purported employer exerts control over the method and manner of performance:

  • Set Hours of Work:  The establishment of set hours of work by the purported employer indicates control.
  • Training:  Training of an individual by an experienced employee, by required attendance at meetings, or by other methods, indicates control, especially if the training is given periodically or at frequent intervals.
  • Amount of Time:  Control is indicated where the worker must devote full-time to the activity.  Full time does not necessarily mean an eight-hour day or a five- or six-day week.  Its meaning may vary with the intent of the parties, the nature of the occupation, and customs in the locality.
  • Simultaneous Contracts:  If an individual works for a number of persons or firms at the same time, lack of control is indicated.
  • Tools and Materials:  The furnishing of tools, materials, and supplies by the purported employer indicates control over the worker.  When the worker furnishes these items, lack of control is indicated, except when the individual provides tools or supplies customarily furnished by workers in the trade.
  • Expense Reimbursement:  Reimbursement of either the worker’s approved business or traveling expenses, or both, indicates control over the worker.  A lack of control is indicated when the worker is paid on a job basis and is responsible for all incidental expenses.
  • Satisfying Requirements of Regulatory and Licensing Agencies:  Control is not indicated when the purported employer is required to enforce standards or restrictions imposed by regulatory or licensing agencies.

See Minn. R. § 5224.0330.
Takeaway for Employers:  Determining whether an individual is an independent contractor or employee can be difficult in certain circumstances.  Employers should pay careful attention to the factors identified under Minnesota law for making these determinations.