Classifying a Worker

The degree of control and independence in your relationship determines if a worker is an employee or an independent contractor. 

A worker is your employee if you have the right to control how the worker performs services (what will be done and how it will be done), even when you give the employee freedom of action. 

A worker is an independent contractor if you have the right to control or direct only the result of the work and not how to work is performed. Independent contractors pay self-employment tax on their earnings.

The Minnesota Department of Revenue considers many factors, falling into three broad categories:

• Behavioral Control: Do you (the business) have a right to direct or control how the work is being done? This control may happen through instruction, training, or other means.
• Financial Control: Do you have a right to direct or control the financial and business aspects of the worker’s job?
• Relationship of the Parties: How do you and the worker perceive your relationship?

You must weigh all relevant factors when determining if someone is an employee or independent contractor. Some factors may indicate a worker is an employee, while others indicate they are an independent contractor.

An employer or worker can request an IRS determination to determine their classification. We will abide by the IRS's decision. To do that:

1. Complete or have your worker complete federal Form SS-8 and submit it to the IRS.
2. Send a copy of the completed form (marked "Minnesota copy") to us at the same time.
3. When you receive the IRS’s written determination, send us a copy. 

Mail the copies to:

Minnesota Department of Revenue
Mail Station 6501
600 N. Robert St.
St. Paul, MN 55146-6501