2023 Wage Theft Law: What Do Contractors Need to Know?

Construction workers in building site.

Minnesota Statute § 181.165, also known as the 2023 wage theft law, is a new statute that directly impacts the construction industry in Minnesota, which boils down to how you classify the folks working with you. The ideology behind this new law was meant to focus on making sure that employees were not being taken advantage of. While undoubtedly good-intentioned, there's some saying about intentions and the road to hell. This law has a tremendous impact on the commercial construction industry with a (currently) minor ripple effect in residential construction. Let's break it down.

What You Need to Know

  1. Who's Who: This rule helps decide if someone is part of your team (like an employee) or working on their own (like an independent contractor). It's not just about what you call them—it's about the level of control you have over their work.

  2. Getting It Right Matters: If you accidentally say someone is working on their own when they're actually part of your team, it could cause problems. You might have to pay fines or sort out unpleasant government penalties like unpaid wages or taxes. So, it's really important to get this part right.

  3. Keeping Good Records: To follow this rule, keep records about everyone you work with. Have papers that explain why you call them independent contractors if that's how you see it.

  4. Commercial Contractors: If your sub or your sub's-sub misclassifies anyone, you may be on the hook.

Things to Do

  1. Check Who's Who: Look at who works with you. Make sure you've got them in the right "group" as the rule says.

  2. Keep Good Records: Write down all the important stuff about who does what.

  3. Get Help When Unsure: If this seems confusing, connect with the North Star Law Group Construction Team. They can make it easier to understand and guide you on what to do.

So, that's the 2023 wage theft law in simple terms. By sticking to the rules, keeping good records, and asking for advice when needed, you can avoid trouble about who's who in your construction team. Read the full bill here: Minn. Stat. 181.156