SUBCONTRACTOR REGISTRATION

Required: Subcontractor Registration

Contractors who provide residential or commercial building construction or improvement services are required to register with DLI through the Construction Contractor Registration Program. Licensed residential contractors do not have to be registered because they already carry a license with the state.

Effective May 22, 2014 the subcontractor registration pilot project was made permanent. Under the law, contractors and subcontractors must hire registered contractors or face significant penalties and must be found to have hired an employee and not an independent contractor.

Licensed contractors are required to make sure their subs are all registered. The law provides general contractors and subs who subcontract an improved nine-factor test “safe harbor” and a first-time violation “hall pass” (forgivable fine).

Registration is free and can be done online at:

https://secure.doli.state.mn.us/license/initialapp.aspx?code=IR

If a person does not register, he or she will be presumed to be an employee of the entity for which the work is performed. Also, persons must still meet the 9-factor test to be considered an independent contractor. The expiration date of all current registrations has been automatically extended from June 30, 2014 to June 30, 2015.

Contractors and subcontractors Must Hire Registered Contractors

Contractors who hire subcontractors to perform work as an independent contractor will need to continue to use DLI’s online license lookup tool to verify a subcontractor status as a “registered contractor.”

To look up a registration go to:

https://secure.doli.state.mn.us/lookup/licensing.aspx

There are two pull down menus. Select the discipline “Registered Contractors” in the first menu. Select “Contractor Registration” as the classification. Use the business name in the search block to search for and confirm registration.

BAM also put together a document with instructions on how to search for subcontractor registration.

If all else fails, call or e-mail DLI at: (651) 284-5074 or dli.register@state.mn.us

Landscapers

BAM members have inquired about whether landscapers need to be registered. The law has not changed and DLI says registration is required for landscapers whose landscape installation work is included in the contract for the construction of or improvement to a building.

Company Status Doesn’t Matter

Also, incorporated status of the company doesn’t matter regarding registration. This is a REALLY IMPORTANT thing for members to know. BAM knows of several builders and subs who have sub-contracted with incorporated entities and yet, when audited (often because of the complex 9-factor test) they end up finding themselves to have “hired an employee” rather than an independent contractor even if they have an active and incorporated business. Right now, hiring registered contractors is the best safe harbor we know of for BAM’s members.