Minnesota uses a multi-factor test under the Minnesota Uniform Trade Secrets Act and common law to distinguish gig workers as employees or independent contractors, focusing on behavioral control, financial control, and relationship type rather than a single ABC test. Platforms like Uber or DoorDash often classify drivers as contractors unless they exert significant control over schedules, tools, or performance, but 2026 labor updates emphasize minimum wage compliance and paid leave opt-ins for self-employed gig workers. Misclassification risks back wages, penalties, and reclassification lawsuits, especially amid Minneapolis rideshare pay mandates.​
Classification Factors
Behavioral control weighs instructions on how, when, and where work occurs; low control favors contractors. Financial aspects include unreimbursed expenses, profit/loss opportunity, and investment in equipment—gig workers supplying their own vehicles typically qualify as contractors. Relationship permanence matters: ongoing exclusive arrangements suggest employees, while project-based gigs support contractor status.​
Gig-Specific Rules
Effective January 2026, Minnesota’s Paid Family and Medical Leave excludes contractors by default but allows voluntary opt-in with portable benefits; rideshare proposals seek insurance and contribution mandates. Minimum wage ($11.41/hour statewide) applies if employee status triggers, with Minneapolis/St. Paul rates up to $16.37; ESST accrual covers anticipated 80-hour workers. Platforms must issue 1099s for $600+ earnings and verify TINs.​
Enforcement Trends
Department of Labor and Industry audits target misclassification in app-based work, with remedies like overtime backpay under FLSA parallels. Minneapolis ordinances boost driver pay beyond state minimums, prompting statewide legislative delays to avoid company pullouts. Workers can challenge status via DLI claims or courts, prioritizing economic realities over contract labels.
SOURCES
[1](https://www.laboremployment-lawblog.com/2025-2026-minnesota-labor-and-employment-law-update-key-wage-leave-pay-transparency-and-workplace-compliance-changes-for-employers/)
[2](https://www.postercompliance.com/blog/labor-law-compliance-for-gig-workers-what-employers-need-to-know/)
[3](https://www.dli.mn.gov/news/new-minimum-wage-rates-changes-meal-and-rest-break-laws-take-effect-jan-1-2026)
[4](https://www.laborandemploymentlawinsights.com/2024/04/changes-coming-for-minnesota-rideshare-employees/)
[5](https://www.worklaw.com/blog/minnesota-a-final-reminder-of-the-new-laws-effective-january-1-2026)
