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Minnesota Legislature

Contractor or employee?

Published (3/6/2009)
By Kris Berggren
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A bill could require trucking and delivery companies to take a different fork in the road.

HF813 would crack down on misclassification of some workers, which its sponsor, Rep. Sheldon Johnson (DFL-St Paul), called a “huge problem” in Minnesota, particularly in the courier business. He said 14 percent of Minnesota employers — and 35 percent of a sampling of those in the trucking industry — wrongly misclassify some workers as independent contractors not subject to withholding taxes, Social Security or health insurance benefits, although in practice they’re treated as employees who may be required to wear company uniforms, attend trainings and adhere to a company schedule.

Approved Feb. 27 by the House Labor and Consumer Protection Division and the House Commerce and Labor Committee March 3, the bill now awaits action on the House floor. A companion, SF910, sponsored by Sen. David Tomassoni (DFL-Chisholm), awaits action by the Senate Business, Industry and Jobs Committee.

Edward Reynoso, field action director for the International Brotherhood of Teamsters Joint Council 32, acknowledged that 13.5 million “legitimate” independent contractors work nationwide, but said misclassifying workers leads to $15 million in lost income tax revenue in Minnesota annually, while taxpayers foot the bill for those without health care insurance.

The bill’s opponents said it could threaten the industry.

Minnesota Trucking Association President John Hausladen said his group’s members are “highly skilled professionals” who are free to “decide when to take a load, what route to take, when to put fuel in their vehicles.”

“I consider myself a small businessman,” said trucker Robert Towey, who contracts with Dart Transit Company and took an unpaid day off the road to oppose the bill at the hearing. He said he owns his equipment, negotiates rates with employers and pays taxes, worker’s compensation and medical insurance.

Rep. Kurt Zellers (R-Maple Grove) said compliance would unfairly burden small businesses, such as construction companies that rely on seasonal independent contractors to supplement their regular employee pool.

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