One of the first questions to consider in a workers’ compensation case is whether you are an employee or an independent contractor. In Minnesota, this distinction is crucial. One of the fundamental requirements of workers’ compensation is that a worker must be in an employee–employer relationship. Typically, this means the worker is an at-will employee who can be terminated or resign without legal repercussions.
Independent contractors, on the other hand, do not have an employee–employer relationship. Their relationship is usually defined by a contract, and they may face legal action if they fail to complete their contractual obligations. Because of this, independent contractors are generally excluded from Minnesota workers’ compensation coverage.
However, whether you are legally classified as an employee or an independent contractor may not be as clear-cut as your employer suggests. Even if your employer labels you an “independent contractor,” the court has the authority to determine that, based on the facts, you were actually an employee. Courts look at the actual conduct of the parties rather than job titles. To make this determination, Minnesota courts analyze the relationship under five primary categories:
| Category | Characteristics of Employee | Characteristics of Independent Contractor |
|---|---|---|
| Control Does your employer control how, when, and where you perform your work? |
An employee must follow the employer’s instructions regarding when, where, and how work is completed. While the employee may have some flexibility, the employer ultimately has the final say. | An independent contractor typically decides when and how to complete the work and exercises greater autonomy over methods and scheduling. |
| Payment Who determines your pay and handles deductions? |
An employee is paid at regular intervals (e.g., weekly or biweekly), with taxes and deductions automatically withheld. Employees do not assume business risks or share in profits. | An independent contractor negotiates pay rates, receives payments without deductions, and assumes the risk and potential profit of the project. |
| Tools and Materials Are you required to provide your own tools or equipment? |
Employees typically use tools and materials supplied by the employer. Personal transportation is not considered a required tool unless travel during work hours is required. | Independent contractors generally provide and maintain their own tools, equipment, and supplies. |
| Premises Who controls the workplace where the work is performed? |
Employees perform services on premises controlled by the employer. | Independent contractors often have their own place of business or control the premises where they perform work. |
| Discharge Can the relationship be terminated without liability? |
Employment is usually at-will, meaning either party can terminate the relationship without legal consequences. | Independent contractors operate under a contract that creates legal obligations. Early termination may result in breach of contract liability for either party. |
These five factors help determine your true employment status. If you’ve been injured while working and your employer claims you’re an independent contractor, it’s important to speak with a Minnesota workers’ compensation lawyer. The classification can significantly impact your right to receive medical coverage and wage-loss benefits.