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Have contractors use official business name on invoices

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in Compensation and Benefits,Human Resources

Do you use independent contractors to provide services? Then make sure they invoice your company in their official business entity’s name, not simply with their name. Otherwise, the Minnesota Department of Employment and Economic Development may classify contractors as employees and make them eligible for unemployment benefits on your account.

Recent case: A-1 Construction, a residential remodeling company, uses many independent contractors. Some of them filed for unemployment after several jobs were completed. They argued they were employees under the law because they hadn’t submitted invoices in a company name, merely using their own full names to get paid.

The state took the position that unless the supposed independent contractors submitted invoices in their business names, they were employees. The Court of Appeals of Minnesota agreed. (A-1 Construction v. MDEED, No. A16-0436, Court of Appeals of Minnesota, 2016)

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