Minnesota 2025-2026 Regular Session

Minnesota Senate Bill SF2360 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		1.1 A bill for an act
2		-	1.2 relating to employment; requiring a biennial misclassification fraud impact report;
3		-	1.3 appropriating money.
4		-	1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
5		-	1.5 Section 1. MISCLASSIFICATION FRAUD IMPACT REPORT.
6		-	1.6 (a) Every two years, the commissioners of revenue, employment and economic
7		-	1.7development, and labor and industry must coordinate to conduct an analysis of the costs of
8		-	1.8misclassification to illustrate how misclassification impacts misclassified workers,
9		-	1.9government programs, and tax collections.
10		-	1.10 (b) By January 15 of every odd-numbered year, beginning January 15, 2027, the
11		-	1.11commissioner of labor and industry must report on the analysis performed under paragraph
12		-	1.12(a) to the chairs and ranking minority members of the legislative committees with jurisdiction
13		-	1.13over taxes, workforce, and labor. The commissioner of labor and industry may contract
14		-	1.14with external experts or an independent third party to conduct a study, develop a report, and
15		-	1.15perform other functions.
16		-	1.16 (c) At a minimum, the study and report must provide:
17		-	1.17 (1) an estimate of the number of workers experiencing misclassification in Minnesota;
18		-	1.18 (2) an estimate of the cost of misclassification to impacted workers;
19		-	1.19 (3) an estimate of the prevalence of misclassification by industry; and
20		-	1.20 (4) an estimate of the impact to:
21		-	1.21 (i) the unemployment insurance trust fund;
	2	+	1.2 relating to employment; requiring annual reports from partnership entities of the
	3	+	1.3 Intergovernmental Misclassification Enforcement and Education Partnership;
	4	+	1.4 appropriating money; amending Minnesota Statutes 2024, section 181.725, by
	5	+	1.5 adding a subdivision.
	6	+	1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
	7	+	1.7 Section 1. Minnesota Statutes 2024, section 181.725, is amended by adding a subdivision
	8	+	1.8to read:
	9	+	1.9 Subd. 4b.Misclassification rates; partnership entity annual reporting.(a) Beginning
	10	+	1.10March 1, 2026, and each March 1 thereafter, each partnership entity must report to the chairs
	11	+	1.11and ranking minority members of the legislative committees with jurisdiction over labor
	12	+	1.12the following information:
	13	+	1.13 (1) an estimate of the number of workers experiencing misclassification;
	14	+	1.14 (2) an estimate of the cost of misclassification to impacted workers;
	15	+	1.15 (3) an estimate of impact on law-abiding competitors of employers that have misclassified
	16	+	1.16employees; and
	17	+	1.17 (4) an estimate of misclassification by industry to help guide partnership enforcement
	18	+	1.18priorities.
	19	+	1.19 (b) Based on the estimated misclassification rates and information required under
	20	+	1.20paragraph (a), the following must also be included with the reports under paragraph (a):
	21	+	1.21 (1) from the Department of Employment and Economic Development, an estimate of
	22	+	1.22the impact to:
22	23		1Section 1.
23		-	~~S2360-1 1st Engrossment~~~~SF2360~~ REVISOR SS
	24	+	25-04298 as introduced03/04/25 REVISOR SS/NS
24	25		SENATE
25	26		STATE OF MINNESOTA
26	27		S.F. No. 2360NINETY-FOURTH SESSION
27	28		(SENATE AUTHORS: OUMOU VERBETEN, McEwen and Kupec)
28	29		OFFICIAL STATUSD-PGDATE
29		-	Introduction and first reading71203/10/2025
30		-	Referred to Labor
31		-	Comm report: To pass as amended and re-refer to Taxes04/01/2025 2.1 (ii) the family and medical benefit insurance account;
32		-	2.2 (iii) state income tax collection;
33		-	2.3 (iv) the workers' compensation fund; and
34		-	2.4 (v) the workforce development fund.
35		-	2.5 (d) Data and information relevant to the required report elements in paragraph (c) must
36		-	2.6be provided to the commissioner of labor and industry for purposes of the study and report,
37		-	2.7including, but not limited to, the following:
38		-	2.8 (1) from the Department of Employment and Economic Development, information and
39		-	2.9data relevant to:
40		-	2.10 (i) the unemployment insurance trust fund;
41		-	2.11 (ii) the family and medical benefit insurance account;
42		-	2.12 (iii) unemployment insurance program audits and findings; and
43		-	2.13 (iv) the workforce development fund;
44		-	2.14 (2) from the Department of Revenue, information and data relevant to:
45		-	2.15 (i) misclassification tax audits and findings;
46		-	2.16 (ii) income tax collection; and
47		-	2.17 (iii) 1099 filings; and
48		-	2.18 (3) from the Department of Labor and Industry, information and data relevant to:
49		-	2.19 (i) misclassification complaints, investigations, and findings; and
50		-	2.20 (ii) the workers' compensation fund.
51		-	2.21 Sec. 2. APPROPRIATION; MISCLASSIFICATION FRAUD IMPACT REPORT.
52		-	2.22 (a) $....... in fiscal year 2026 is appropriated from the workforce development fund to
53		-	2.23the commissioner of labor and industry for the misclassification fraud impact report and
54		-	2.24for legal, technical, and clerical staff support for the report. This appropriation is available
55		-	2.25until June 30, 2027. The base amount in fiscal year 2028 is $....... from the workforce
56		-	2.26development fund.
57		-	2.27 (b) The commissioner of labor and industry may enter into interagency agreements with
58		-	2.28the commissioner of employment and economic development and the commissioner of
	30	+	Introduction and first reading03/10/2025
	31	+	Referred to Labor 2.1 (i) the unemployment insurance trust fund;
	32	+	2.2 (ii) the family and medical benefit insurance account; and
	33	+	2.3 (iii) the tax and premium rates for those programs, as applicable;
	34	+	2.4 (2) from the Department of Revenue, an estimate of the impact to:
	35	+	2.5 (i) income tax collection; and
	36	+	2.6 (ii) other government programs; and
	37	+	2.7 (3) from the Department of Labor and Industry, an estimate of the impact to:
	38	+	2.8 (i) the workers' compensation fund; and
	39	+	2.9 (ii) workers' compensation insurance rates.
	40	+	2.10 Sec. 2. APPROPRIATIONS; MISCLASSIFICATION FRAUD ANALYSIS.
	41	+	2.11 Subdivision 1.Appropriations.(a) $....... in fiscal year 2026 and $....... in fiscal year
	42	+	2.122027 are appropriated from the general fund to the commissioner of labor and industry for
	43	+	2.13misclassification fraud analysis.
	44	+	2.14 (b) $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the
	45	+	2.15general fund to the commissioner of revenue for misclassification fraud analysis.
	46	+	2.16 (c) $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the
	47	+	2.17general fund to the commissioner of employment and economic development for
	48	+	2.18misclassification fraud analysis.
	49	+	2.19 (d) $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the
	50	+	2.20general fund to the commissioner of commerce for misclassification fraud analysis.
	51	+	2.21 (e) $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the
	52	+	2.22general fund to the attorney general for misclassification fraud analysis.
	53	+	2.23 Subd. 2.Use of money.Money appropriated under this section must be used for costs
	54	+	2.24associated with estimating misclassification fraud rates and analyzing impacts to programs
	55	+	2.25and funds overseen by the respective agencies that may be impacted by misclassification
	56	+	2.26fraud as required under Minnesota Statutes, section 181.725, subdivision 4b.
59	57		2Sec. 2.
60		-	S2360-1 1st EngrossmentSF2360 REVISOR SS 3.1revenue to transfer funds appropriated under paragraph (a) to cover costs associated with
61		-	3.2the misclassification fraud impact report.
62		-	3Sec. 2.
63		-	S2360-1 1st EngrossmentSF2360 REVISOR SS
	58	+	25-04298 as introduced03/04/25 REVISOR SS/NS