Recent ICE activity highlights how quickly enforcement can land on your jobsite and why it’s time to get proactive about worker misclassification.
What Happened in St. Paul
CBS News recently reported that federal immigration agents arrested several roofers at a St. Paul job site, sending shockwaves through the local construction industry. While the headlines focused on immigration enforcement, the underlying issue for many Minnesota contractors goes much deeper: worker misclassification.
The reality is that when enforcement agencies show up at job sites, they often uncover more than one kind of violation, and workers with questionable immigration status are far more likely to be misclassified. In 2025, Minnesota construction businesses can’t afford to overlook the growing crackdown on misclassification - both at the state and federal level.
Misclassification: The Hidden Risk Behind the Headlines
In Minnesota, misclassification happens when a business treats a worker as an independent contractor when, by law, they should be classified as an employee.
This might seem like a paperwork issue, but it’s not - it’s a major compliance problem with costly consequences, particularly in the construction industry, where workers are often misclassified because of problems with immigration status.
Employers who misclassify workers can face:
- Civil penalties up to $10,000 per violation
- Stop-work orders shutting down job sites
- Back pay and benefits claims from workers
- Personal liability for owners and managers who “knew or should have known”
- Investigations by the Department of Labor and Industry (DLI), Department of Revenue, or federal agencies
Minnesota Contractor charged with Wage Theft – North Star Law PLLC
Minnesota’s New Misclassification Laws
The State of Minnesota has made worker misclassification a top enforcement priority. Two recent laws now make compliance mandatory - not optional:
- Minn. Stat. § 181.722 (Effective July 1, 2024):
Broadly prohibits misclassification of employees as independent contractors across all industries.
- Minn. Stat. § 181.723 (Effective March 1, 2025):
Introduces a detailed 14-factor test for the construction industry. A worker is presumed to be an employee unless and until all 14 points have been satisfied.
With these laws, Minnesota has, by design, the strictest misclassification rules in the country. State agencies are actively investigating construction companies, issuing global stop-work orders, and sharing data between agencies to identify violations.
Why This Matters After the ICE Arrests
When ICE finds immigration violations at a construction site, detainment and deportation risk are not the only dangers. Federal and state enforcement efforts often overlap, and a job site that attracts one agency’s attention can quickly bring scrutiny from others.
If workers are found to be misclassified, it doesn’t just trigger fines; it can jeopardize contracts, halt projects, and damage a company’s reputation. Not to mention, it gets your customers on edge.
The bottom line: contractors who stay compliant protect themselves, their teams, and their business.
How to Protect Your Business
Here’s how Minnesota contractors can stay ahead of the curve:
✅ Audit Your Workforce
Review everyone classified as an independent contractor. Use the Minnesota 14-point test for construction workers to gather documentation to verify compliance.
✅ Update Your Contracts
Make sure independent contractor agreements reflect reality, not convenience. Avoid “subcontractor” labels that don’t match the work relationship.
✅ Keep Documentation
Maintain proof of each worker’s independent status, business registration, insurance, tax IDs, invoices, and all other documentation related to the 14 points.
✅ Train Your Team
Project managers, foremen, and HR staff should understand the difference between an employee and a true subcontractor.
✅ Get Legal Help Early
It’s much cheaper and easier to prevent a problem than to defend one. Our construction law team helps businesses perform classification audits, draft compliant contracts, and respond to DLI investigations.
The Takeaway
The ICE arrests in St. Paul are a wake-up call for Minnesota’s construction industry.
Government enforcement is getting more coordinated, and compliance failures, whether immigration or misclassification, can shut down a job site fast.
If you’re unsure about your classification practices, now is the time to act.
🧱 North Star Law helps construction businesses protect their projects, workers, and reputation.
⚖️ Let’s make sure your business is compliant before enforcement finds you.
📞 Contact us today for a Misclassification Compliance Review.
