Minnesota’s Contractor Classification Chaos: A Fight for Fairness

Minnesota’s Contractor Classification Chaos: A Fight for Fairness

March 8, 2025

The world of residential construction in Minnesota is facing a seismic shift, and it’s kicking up a serious dust storm. At the heart of it all? A newly implemented misclassification law that’s drastically changing how we define independent contractors. In February, BAM filed a Federal injunction to block the implementation of the misclassification bill. Learn more here.

Here’s the breakdown:

• The 9-to-14 Point Shift: The old 9-point test for classifying independent contractors has been replaced with a 14-point system. This seemingly small change has huge implications, fundamentally altering how many construction professionals are categorized.
• Steep Penalties: To add fuel to the fire, the new law introduces hefty fines, up to $10,000 per violation. This is a massive burden for businesses, especially smaller operations.
• BAM Takes a Stand: The Builders Association of Minnesota (BAM) is leading the charge against this law, arguing it will cripple the residential construction industry.
• The Courtroom Battle: We took our fight to Federal Court Judge Tunheim, seeking a temporary restraining order and a preliminary injunction to halt the law’s implementation. Unfortunately, our request was denied.
• The Faces of the Fight: Key BAM members, John McGuine, Mike Gohman, and Chad Kompelien, have bravely stepped up to challenge this law by suing the Attorney General and the Commissioner of Labor and Industry. Their dedication is vital to this case.
• Industry-Wide Impact: This law isn’t just about a few contractors; it will impact everyone involved in residential construction.
• Appealing to the 8th Circuit: In a joint decision with our key partners, we’ve decided to appeal Judge Tunheim’s ruling to the 8th Circuit Court of Appeals.
• The 8th Circuit: A New Arena: The 8th Circuit, a federal court composed of three justices, is generally considered more conservative than the Minnesota Federal District Court.
• Speeding Up the Process: While federal appeals typically take around six months, we and our attorneys are pushing for an expedited timeline. We’re aiming to file our notice of appeal next week.
• Anticipating the AG’s Response: We expect the Attorney General’s office to file a motion to dismiss before March 13th.
• Calling for Support: We’re urging other supportive organizations to file amicus briefs, adding weight to our case in front of the 8^th Circuit Court of Appeals.
• BAM’s Commitment: BAM remains steadfast in its commitment to being a legal advocate for its members and the broader construction community.

This is a critical moment for residential construction in Minnesota. We’re in a fight for fairness and clarity. Stay tuned for updates as we navigate this complex legal battle. We will continue to update our members as this situation progresses.