On July 31, 2020, the Minneapolis City Council approved an ordinance related to the use and payment of freelance workers, such as independent contractors, in Minneapolis. The ordinance goes into effect on January 1, 2021, and provides that:
- Businesses that utilize freelance workers must confirm the arrangement in writing, and
- The freelance workers must be paid in accordance with the written agreement.
The City Council passed the measure in response to the financial impact of COVID-19, which saw many businesses negotiate delayed and/or reduced payments to freelancers. The ordinance prevents Minneapolis businesses from treating independent contractors and other freelancers like typical vendors in that regard.
While the ordinance does not directly affect the increasingly complicated and ever-changing analysis of when an individual is properly utilized as an independent contractor (as opposed to being treated like an employee), Minneapolis businesses should be cautious when preparing the written agreement required under the ordinance. Determining whether someone is an independent contractor or an employee is a delicate balance of numerous factors, and the written agreement can tip the balance one way or another. Consider having experienced labor and employment counsel review the required agreement to ensure that the agreement does not suggest the independent contractor is actually an employee.