ICEC – A major change in Minnesota State Law for Contractors
As of 1/1/09 the state of Minnesota requires any individual who considers her/himself to be an Independent Contractor to obtain an Independent Contractor Exemption Certificate (ICEC) from the Department of Labor and Industry. For purposes of the state’s workers’ compensation, unemployment insurance, wage laws and occupational safety regulations, individuals working with out this certificate will be considered employees of the general contractor.The new law does not apply to Corporations, LLCs or Partnerships.
An ICEC permits an individual to work as an independent contractor. The following criteria need to be met in order to obtain an ICEC:
- Maintain a separate business including office, equipment, materials and other facilities
- Holds or has applied for a federal ID number or has filed business or self-employment income tax returns with the IRS during the past year
- Operates under a contract to perform specific services for specific amounts of money and under which the individual controls the means of performing the service
- Incurs the main expenses related to the service the individual performs under contract
- Is responsible for the satisfactory completion of services contracted to perform and is liable for the failure to complete the service
- Received compensation for the service performed under a contract on a commission, per job or competitive bid basis and not any other basis
- May realize a profit or loss under the contract
- Has continuing or recurring business liabilities or obligations
- Success or failure of the individual’s business depends on the relationship of the business receipts to expenditures
For more information go to www.doli.state.mn.us/ic.