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SF 2360

Biennial misclassification fraud impact report requirement and appropriation

2025-2026 Regular Session Introduced by Rob Kupec and 2 co-sponsors

Requires a biennial report on worker misclassification and funds its study to measure impacts on wages, taxes, UI, and enforcement, affecting workers, employers, and state agencies.

Comm report: To pass as amended and re-refer to Taxes
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Bill Summary · SF 2360

Summary of SF 2360 — Biennial misclassification fraud impact report requirement and appropriation

SF 2360 proposes a focused effort to study and quantify the effects of worker misclassification (employees misclassified as independent contractors) and to provide state funding to support that effort. The bill is in the Labor and Taxes policy area and has a companion in the House (HF 2146). The current committee action indicates it has advanced with amendments and was re-referred to Taxes.

What the bill would do

  • Require a biennial (every two years) report on misclassification fraud and its impact in Minnesota.
  • Provide an appropriation to support the report and related enforcement or data-collection activities (funding to the appropriate state agency to carry out the work).

Key provisions (as generally anticipated in this type of measure)

  • Content of the biennial report:
    • Prevalence and patterns of worker misclassification across industries and sectors.
    • Economic and financial impact, including effects on workers’ wages, unemployment insurance contributions, state tax revenue, and related public programs.
    • Impacts on employers, including compliance costs and potential competitive distortions.
    • Evaluation of enforcement efforts to identify and deter misclassification.
    • Recommendations for policy options, administrative improvements, or enforcement enhancements to reduce misclassification.
  • Data and coordination:
    • Likely involvement of the Department of Labor and Industry (or the relevant labor agency) and coordination with other state agencies (potentially including Revenue and workforce development agencies) to gather data.
  • Reporting schedule:
    • A biennial report timeline with a specified deadline for submission to the Legislature; the initial report date would be set in the bill.
  • Appropriation:
    • A dedicated funding line to support the study, data collection, analysis, and reporting activities (amounts and terms to be specified in the enacted bill).

Who would be affected

  • Workers who are misclassified and their employers.
  • Minnesota state agencies involved in labor regulation, unemployment insurance, and tax administration.
  • Legislators and policy makers evaluating labor market safeguards and enforcement mechanisms.
  • Business communities affected by misclassification enforcement and compliance requirements.

Procedural and timeline notes

  • Introduced: March 10, 2025.
  • Referred to: Labor committee; subsequently amended and reported “to pass as amended and re-refer to Taxes” (April 1, 2025).
  • Status indicates it awaits further consideration in the Taxes committee after the amended committee report.
  • Companion bill: HF 2146 in the House.

Next steps

  • Review the exact bill text for detailed definitions, reporting contents, specific dates, and the exact appropriation amount.
  • Monitor the Taxes committee actions for potential further amendments, fiscal notes, and eventual floor votes.

Compiled from official sources — confirm details with the bill’s official record.

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