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Business and Law III
Chapters 2891.0020-50, 325E.66, 181.723, and 326B.701
| Question | Answer |
|---|---|
| How long must a residential building contractor licensee keep project records after completion of a construction project? | At least 3 years after completion of the project. (Minn. R. 2891.0020 — Records) |
| What types of contractor records must be retained under Rule 2891.0020? | Plans, contracts, documents, records, receipts, and disbursements relating to contractor transactions. (Minn. R. 2891.0020 — Records) |
| Where must a licensee keep the records required by Rule 2891.0020? | At the licensee's business address. (Minn. R. 2891.0020 — Records) |
| Must contractor records be available for inspection by the commissioner? | Yes. (Minn. R. 2891.0020 — Records) |
| Is misrepresenting a material fact on a license application considered fraudulent, deceptive, or dishonest? | Yes. (Minn. R. 2891.0040 — Fraudulent, deceptive, or dishonest practices) |
| Is false, fraudulent, or misleading advertising considered a prohibited contractor practice? | Yes. (Minn. R. 2891.0040) |
| Can a material misrepresentation or omission when entering into a building contract be considered fraudulent, deceptive, or dishonest? | Yes. (Minn. R. 2891.0040) |
| Is fraud or dishonesty in executing a contract, mortgage, promissory note, or other contracting document a prohibited practice? | Yes. (Minn. R. 2891.0040) |
| May a contractor conduct business under a name different from the licensed name? | Only if the licensee has filed a certificate of assumed name with the secretary of state and provided a copy to the commissioner. (Minn. R. 2891.0040) |
| What must a contractor do before conducting business under an assumed name? | File a certificate of assumed name with the secretary of state and provide a copy to the commissioner. (Minn. R. 2891.0040) |
| May a contractor contract or offer to contract while the license is revoked, suspended, or inactive? | No. (Minn. R. 2891.0040) |
| May a contractor knowingly perform work beyond the scope of the contractor's license? | No. (Minn. R. 2891.0040) |
| Is performing construction without obtaining applicable local building permits and inspections considered a prohibited practice? | Yes. (Minn. R. 2891.0040) |
| What insurance, bond, and employment-related failures may be considered incompetent, untrustworthy, or financially irresponsible? | Failure to maintain any required license bond, Minnesota workers' compensation, liability insurance, or unemployment benefits required by law. (Minn. R. 2891.0050) |
| How much delinquent state tax, penalties, or interest can trigger a finding of incompetent, untrustworthy, or financially irresponsible practice under the course material? | $500 or more. (Minn. R. 2891.0050) |
| Is diverting money paid to a contractor away from the purpose for which the money was intended considered an improper practice? | Yes. (Minn. R. 2891.0050) |
| May a residential contractor offer to pay an insured customer's insurance deductible as an inducement to obtain repair work? | No. (Minn. Stat. §325E.66, Subd. 1 — Insurance claims) |
| May a contractor advertise that it will pay all or part of a customer's insurance deductible? | No. (Minn. Stat. §325E.66, Subd. 1) |
| May a residential contractor indirectly rebate or pay an insured's property or casualty insurance deductible to induce a sale? | No. (Minn. Stat. §325E.66, Subd. 1) |
| May a residential contractor offer compensation to an insured for providing a service to that insured as an inducement to obtain insurance-funded work? | No. (Minn. Stat. §325E.66, Subd. 1) |
| What may an insurer do with a contractor's estimate if the contractor violates the insurance-deductible prohibition? | The insurer is not obligated to consider the estimate prepared by that residential contractor. (Minn. Stat. §325E.66, Subd. 1) |
| When must the residential contractor notify the insured in writing of the requirements of §325E.66? | With the contractor's initial estimate. (Minn. Stat. §325E.66, Subd. 1) |
| Who else must provide written notification of the requirements of §325E.66? | The adjuster or insurer must provide written notification in the initial estimate relating to the claim. (Minn. Stat. §325E.66, Subd. 1) |
| Who is considered a "residential contractor" for purposes of §325E.66? | A residential roofer, residential building contractor, or residential remodeler. (Minn. Stat. §325E.66, Subd. 1) |
| Who may sue a residential contractor for violating the insurance-deductible prohibition? | The insured or the applicable insurer. (Minn. Stat. §325E.66, Subd. 2 — Private remedy) |
| What may an insured or insurer recover through a private action for a violation of §325E.66? | Damages sustained as a consequence of the contractor's violation. (Minn. Stat. §325E.66, Subd. 2) |
| What does "person" mean under Minnesota's construction contractor worker-classification law? | An individual, LLC, LLP, corporation, partnership, incorporated or unincorporated association, sole proprietorship, joint-stock company, or other legal or commercial entity. (Minn. Stat. §181.723, Subd. 1) |
| What does "department" mean under §181.723? | The Minnesota Department of Labor and Industry. (Minn. Stat. §181.723, Subd. 1) |
| What does "commissioner" mean under §181.723? | The commissioner of labor and industry or a designated representative who is an employee of or under contract with the Department of Labor and Industry. (Minn. Stat. §181.723, Subd. 1) |
| What does "individual" mean under §181.723? | A human being. (Minn. Stat. §181.723, Subd. 1) |
| What does "day" mean under §181.723 unless otherwise provided? | Calendar day. (Minn. Stat. §181.723, Subd. 1) |
| What does "knowingly" mean under §181.723? | The person knew or could have known through the exercise of reasonable diligence. (Minn. Stat. §181.723, Subd. 1) |
| What does "business entity" mean under §181.723? | A person other than an individual or sole proprietor. (Minn. Stat. §181.723, Subd. 1) |
| To what type of work does §181.723 apply? | Individuals performing public or private sector commercial or residential building construction or improvement services. (Minn. Stat. §181.723, Subd. 2) |
| Does manufacture, supply, or sale of products, materials, or merchandise count as building construction or improvement services under §181.723? | No. (Minn. Stat. §181.723, Subd. 2) |
| Does maintenance or removal of existing plants, shrubs, trees, and vegetation count as building construction or improvement services under §181.723? | No. (Minn. Stat. §181.723, Subd. 2) |
| When may other landscaping services fall within §181.723? | When they are provided as part of a contract for building construction or improvement services. (Minn. Stat. §181.723, Subd. 2) |
| What is the general worker-classification rule for an individual performing services in the course of another person's trade or business? | The individual is an employee of that person unless the independent-contractor requirements are satisfied. (Minn. Stat. §181.723, Subd. 3) |
| How many factors does the course identify for determining independent-contractor status under §181.723? | Nine factors. (Minn. Stat. §181.723, Subd. 4) |
| What is the first independent-contractor factor under §181.723? | The individual maintains a separate business with their own office, equipment, materials, and other facilities. (Minn. Stat. §181.723, Subd. 4) |
| What tax or identification requirement is included in the independent-contractor test? | The individual holds or has applied for a federal EIN, or has filed business or self-employment federal tax returns if services were performed in the previous year. (Minn. Stat. §181.723, Subd. 4) |
| What contractual-control factor must an individual satisfy to qualify as an independent contractor? | The individual operates under a contract for specific services and specific amounts of money and controls the means of performing the services. (Minn. Stat. §181.723, Subd. 4) |
| Who must incur the main expenses related to the services for independent-contractor status? | The individual performing the services. (Minn. Stat. §181.723, Subd. 4) |
| Who must be responsible for satisfactory completion of the contracted services? | The individual performing the services, who must also be liable for failure to complete them. (Minn. Stat. §181.723, Subd. 4) |
| How must an independent contractor generally be compensated under the course's nine-factor test? | On a commission, per-job, or competitive-bid basis, and not on another basis. (Minn. Stat. §181.723, Subd. 4) |
| Must an independent contractor have the possibility of making a profit or suffering a loss? | Yes. (Minn. Stat. §181.723, Subd. 4) |
| Must an independent contractor have continuing or recurring business liabilities or obligations? | Yes. (Minn. Stat. §181.723, Subd. 4) |
| What must the success or failure of an independent contractor's business depend on? | The relationship of business receipts to expenditures. (Minn. Stat. §181.723, Subd. 4) |
| What is presumed if an individual required to register under §326B.701 is not registered? | The individual is presumed to be an employee of the person for whom the individual performs services. (Minn. Stat. §181.723, Subd. 4) |
| Can the presumption that an unregistered worker is an employee be rebutted? | Yes, by showing that the individual met all nine independent-contractor factors when the services were performed. (Minn. Stat. §181.723, Subd. 4) |
| If an individual owns part of a business entity, what additional requirements are identified for independent-contractor treatment through that entity? | The business entity must meet the nine factors, invoices and payments must be in the business entity's name, and the entity must be registered with the secretary of state if required. (Minn. Stat. §181.723, Subd. 4) |
| May an individual claim to be an independent contractor without satisfying the requirements of Subdivision 4? | No. (Minn. Stat. §181.723, Subd. 7) |
| May a construction business coerce or fraudulently cause an individual to adopt independent-contractor status or form a business entity? | No. (Minn. Stat. §181.723, Subd. 7) |
| May a person knowingly misclassify an individual as an independent contractor? | No. (Minn. Stat. §181.723, Subd. 7) |
| What does "business entity" mean under the construction contractor registration statute? | A person other than an individual or sole proprietor. (Minn. Stat. §326B.701, Subd. 1) |
| What types of materials are included within the definition of "document" under §326B.701? | Papers, books, records, memoranda, data, contracts, drawings, graphs, charts, photographs, digital/video/audio recordings, accounts, files, statements, letters, emails, invoices, bills, notes, and calendars maintained in any form. (Minn. Stat. §326B.701) |
| Who generally must register as a construction contractor under §326B.701? | Persons performing public or private sector commercial or residential building construction or improvement services. (Minn. Stat. §326B.701, Subd. 2) |
| When must a person required to register do so? | Before performing construction services for another person. (Minn. Stat. §326B.701, Subd. 2) |
| What is the purpose of construction contractor registration under §326B.701? | To help DLI, DEED, and the Department of Revenue enforce laws relating to employee misclassification. (Minn. Stat. §326B.701, Subd. 2) |
| Must a person who already holds a current applicable license, certificate, or registration also register under §326B.701? | No. The registration requirement does not apply while the person holds the current license, certificate, or registration. (Minn. Stat. §326B.701, Subd. 2) |
| When must a person holding an independent contractor exemption certificate register? | No later than the date the exemption certificate expires, is revoked, or is canceled. (Minn. Stat. §326B.701, Subd. 2) |
| Is a person who has given a bond to the state exempt from the registration requirement described in the course? | Yes. (Minn. Stat. §326B.701, Subd. 2) |
| Is an employee of the person performing construction services required to separately register under §326B.701? | No. (Minn. Stat. §326B.701, Subd. 2) |
| Are architects and professional engineers practicing their profession exempt from the registration requirement? | Yes. (Minn. Stat. §326B.701, Subd. 2) |
| Are school districts and technical colleges exempt from the construction contractor registration requirement? | Yes. (Minn. Stat. §326B.701, Subd. 2) |
| Is a person providing construction services on a volunteer basis required to register? | No. (Minn. Stat. §326B.701, Subd. 2) |
| How must a person submit a construction contractor registration application? | Electronically. (Minn. Stat. §326B.701, Subd. 3) |
| At what ownership percentage must an owner's individual information be provided on a construction contractor registration application? | 25% or more ownership of the business entity. (Minn. Stat. §326B.701, Subd. 3) |
| What identifying information is required for an individual or 25%-or-more owner on a registration application? | Full legal name and business title, business address and telephone number, ownership percentage, and Social Security number. (Minn. Stat. §326B.701, Subd. 3) |
| Must a registration application disclose whether the applicant has employees? | Yes. (Minn. Stat. §326B.701, Subd. 3) |
| Must a registration application identify all other persons with ownership interests and their percentages? | Yes. (Minn. Stat. §326B.701, Subd. 3) |
| Must a registration application document workers' compensation and unemployment-insurance compliance? | Yes. (Minn. Stat. §326B.701, Subd. 3) |
| What must the person signing a registration application certify? | That the person reviewed the application, determined the information is true and accurate, and is authorized to sign and file it on the applicant's behalf. (Minn. Stat. §326B.701, Subd. 3) |
| Must the applicant authorize DLI to verify information provided on the registration application? | Yes. (Minn. Stat. §326B.701, Subd. 3) |
| Within how many days must a registered person report a change in registration information to the commissioner? | Within 15 days. (Minn. Stat. §326B.701, Subd. 3) |
| What is required if the business entity's structure or legal form changes? | A new registration application and registration fee must be submitted. (Minn. Stat. §326B.701, Subd. 3) |
| May a person with an expired registration continue providing construction services when registration is required? | No. (Minn. Stat. §326B.701, Subd. 3) |
| When do registrations issued after December 31, 2015 expire according to the course? | On the following December 31 of each odd-numbered year. (Minn. Stat. §326B.701, Subd. 3) |
| When may a person begin submitting a registration or renewal application during the expiration year? | October 1. (Minn. Stat. §326B.701, Subd. 3) |
| What risk does the course identify if a renewal application is submitted later than December 1 of the expiration year? | The registration may expire before the department has issued or denied the renewal. (Minn. Stat. §326B.701, Subd. 3) |
| What registration information is publicly shown on the department website? | The registered person's legal business name and assumed name, designated business address, effective date, and expiration date. (Minn. Stat. §326B.701, Subd. 4) |
| May a person perform construction services for someone else without first registering when registration is required? | No. (Minn. Stat. §326B.701, Subd. 5) |
| May a construction contractor hire or pay another person to perform construction services if that other person is required to register but is not registered? | No. (Minn. Stat. §326B.701, Subd. 5) |
| How are payments to an unregistered person on a single project site treated under the course material? | All payments to the unregistered person for construction services on that single project site are considered a violation. (Minn. Stat. §326B.701, Subd. 5) |
| Is it a violation to pay a person who is currently unregistered if that person was registered when the construction contract was entered into? | No, according to the exception stated in the course. (Minn. Stat. §326B.701, Subd. 5) |
| Is a homeowner who is not in the construction trade prohibited from hiring an unregistered person under this particular provision? | No. The course lists an exception for a homeowner or business not engaged in the trade of building construction or improvement services. (Minn. Stat. §326B.701, Subd. 5) |
| What is the maximum penalty stated in the course for failure to register? | $2,000. (Minn. Stat. §326B.701, Subd. 6) |
| When can the $2,000 failure-to-register penalty be forgiven? | If the person registers within 30 days of the penalty order; the course also states that the commissioner shall forgive the penalty for a first violation. (Minn. Stat. §326B.701, Subd. 6) |
| How long does a person have to register after a penalty order in order to qualify for the stated penalty forgiveness? | 30 days from the date of the penalty order. (Minn. Stat. §326B.701, Subds. 6–7) |
| Are data contained in registration applications public or private? | Private data. (Minn. Stat. §326B.701, Subd. 8) |
| Are issued registration certificates public or private data? | Public data. (Minn. Stat. §326B.701, Subd. 8) |
| Are records documenting the revocation or cancellation of a registration certificate public? | Yes. (Minn. Stat. §326B.701, Subd. 8) |
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