|
|
|
STARTING AND OPERATING A BUSINESS IN MINNESOTA Copyright © 2000, Michael D. Jenkins
CONTENTS OF THIS CHAPTER:
I. INTRODUCTION I. INTRODUCTION Minnesota has a fairly typical tax and legal structure under which businesses must operate, except that business personal property, including both tangible and intangible personal property, is generally exempt from property tax. However, tax rates, especially on corporations, are some of the highest in the country, and as a state with a history of being very pro-labor, Minnesota also tends to impose more complex regulations on businesses than almost any other state, with the possible exceptions of New York and California. Like most states, Minnesota imposes a personal income tax, a franchise (income) tax on corporations, a sales and use tax, various excise taxes, with property taxes imposed at the local level. The state has also adopted a limited liability company (LLC) law, and a limited liability partnership (LLP) law, so that businesses operating in Minnesota in LLC or LLP form may obtain the advantages of limited liability, without incorporating or becoming subject to corporate taxation, generally. At present, the state's economy is exceptionally robust, in terms of the level of unemployment, average per capita income levels, and other economic measures. For example, in April, 2000, the state's unemployment rate was down to 2.6%, one of the lowest unemployment rates of any state. This compares to a national unemployment rate of 3.9% for the same month, the lowest in several decades. To view the latest federal Bureau of Labor Statistics unemployment rate data for Minnesota or any other state, visit the BLS website. II. LEGAL ENTITIES -- FILING FEES AND REPORTING REQUIREMENTS. (a) In General. A business that operates in Minnesota can do so as a sole proprietorship, a general or limited partnership, a corporation, or a limited liability company. In addition, like the federal tax law, the state income tax law also recognizes S corporations, for income tax purposes, and generally allows the income or losses of an S corporation to "flow through" and be taxed or deducted at the shareholder level, rather than taxing the corporation itself as an entity. However, unlike other states, Minnesota imposes a minimum fee (tax) on S corporations, regular ("C") corporations, partnerships, and LLCs, based on their payroll, property, and gross receipts in the state, even if the business generates no net income. This tax applies, in addition to any other income or franchise taxes, to all but very small businesses, with total payroll, property and gross receipts of under $500,000. See Section IV(a) for more details on this "minimum fee" tax on business entities. Minnesota law also provides for limited liability partnerships, in which no partner is liable for certain debts of the partnership, somewhat like a corporation or LLC, but with fewer legal formalities than are required for either a corporation or an LLC. Each of the above entities is discussed below, along with the basic requirements for forming such an entity and any general ongoing (non-tax) reporting requirements that are applicable to it. The tax treatment of each form of legal entity is discussed in Section IV below. (b) Sole Proprietorships. In general, sole proprietorships in Minnesota can be formed with no formalities. However, as discussed in Section IV(b), it will generally be necessary to obtain one or more local business licenses from cities or counties in which you operate and, in some cases, state licenses, as well. No separate tax form filing is required, generally, for a sole proprietorship, under the Minnesota income tax law. Instead, as with the Schedule C on your federal Form 1040, you simply report the net income or loss from your sole proprietorship on your state personal income tax return. See Section IV(c) for information on the Minnesota income tax and filing requirements for individuals. (c) Partnerships. As a rule, general partnerships in Minnesota can be formed with no formalities, although it is highly advisable to have a written partnership agreement. However, as discussed in Section IV(b), it will generally be necessary to obtain one or more local business licenses from cities or counties in which you operate and, in some cases, state licenses, for any type of partnership, including general or limited partnerships, or limited liability partnerships. A limited partnership, in which there is at least one general partner (who is liable for partnership debts) and at least one limited partner (who is not liable for partnership debts), may also be formed under Minnesota law. Unlike a general partnership, a limited partnership must generally have a written partnership agreement, and must file a certificate of limited partnership with the secretary of state, together with a filing fee of $100. Foreign limited partnerships must also register before being allowed to do business in Minnesota, and must pay a registration fee of $85. For information on limited partnership filing requirements, see the contact information for the offices of the Minnesota Secretary of State, listed in Section VI(a). Limited liability partnerships (LLPs) are a new form of partnership permitted under the laws of Minnesota. Like an LLC, an LLP provides limited liability for its owners, while retaining the tax advantages of a partnership for federal and Minnesota state income tax purposes. However, unlike an LLC, an LLP typically operates like a regular partnership, and is not required to file articles of organization. To form an LLP in Minnesota, you must register and pay a filing fee of $135 to the secretary of state. Foreign LLPs, those created under the laws of another state, must register with the secretary of state and also pay a fee of $135. Note that the Minnesota LLP law appears to give much less protection to partners in an LLP than state law grants to stockholders of a corporation, so you should not ordinarily consider an LLP as the full equivalent of a corporation or, with regard to limitation of your liability as an owner. Every LLP doing business in Minnesota, including both domestic and foreign LLPs, must renew its initial registration annually, and pay the registration fee of $135. For more information on LLP registration and reporting requirements, see the contact information for the offices of the Minnesota Secretary of State, listed in Section VI(a). Note that one potential drawback of LLPs, if you will do business in other states besides Minnesota, is that you may not enjoy limited liability with regard to creditors of the LLP if you do business in some such states. Some states, like California and New York, only recognize certain types of professional partnerships as LLPs. Such other states may simply treat your LLP like an ordinary general partnership, with no limitation of liability. A partnership agreement, for any type of partnership, should spell out in considerable detail such matters as the following:
Partnerships, as entities, are not subject to state income tax in Minnesota. Instead, the income or losses of the partnership, as allocated among the partners, must be reported on the personal income tax returns of the individual partners (or on the corporate tax returns of any corporate partners). However, like corporations and LLCs, partnerships may be subject to an annual "minimum fee" ranging from $100 to $5,000, as discussed at Section IV(a). Partnerships are also required to file an annual tax information return with the state. For details on the Minnesota partnership tax return filing requirements, see Section IV(c). (d) Corporations. To form a corporation in Minnesota, you must file articles of incorporation with the Minnesota Secretary of State and pay fees of $135. A foreign corporation (one formed under the laws of another state or a foreign country), must obtain a certificate of authority before it may legally conduct any business in Minnesota, by filing an application for a certificate of authority and paying filing fees of $200. For more information on filing articles of incorporation or applying for a certificate of authority to do business in Minnesota, see the contact information for the offices of the secretary of state, listed in Section VI(a). In addition, once your corporation is formed, it will be required to file annual reports by December 31 each year. No fee is due for a domestic corporation, except that a $35 fee will be charged if the report is filed late, or if it is amended to change certain information. A foreign corporation that does business in Minnesota must also file an annual report, and pay a $20 fee plus an additional $20 license fee ($40 minimum) for each $100,000 or fraction of $100,000 of net taxable income it reported for the prior year. Thus, the minimum annual fee is $60. Foreign corporations' annual reports are due by May 15 each year. Starting in 2001, foreign corporations are required to file by December 31 for each calendar year, and will pay an annual registration fee with the annual report of $115. Failure to file the corporate annual report on a timely basis could result in suspension or revocation of your corporation's charter. In addition to paying federal income taxes on its income, a corporation that does business in Minnesota must also file corporate income tax (franchise tax) returns with the state. See Section IV(c) for a discussion of state corporate income tax rates and tax return filing requirements. For tax forms and more information on corporate franchise (income) taxes in Minnesota, see the contact information for the offices of the Department of Revenue, listed in Section VI(a). (e) S Corporations. An S corporation is simply a regular corporation that has elected, for federal or state income tax purposes, or for both, to be taxed somewhat like a partnership, with its income, losses and tax credits flowing through to its owners, who report such income, losses, or credits on their individual tax returns. Minnesota recognizes S corporations for income tax purposes, and treats them in a manner similar to the federal tax treatment. No separate state election of S corporation status is required. However, S corporations may be subject to the annual fee described in Section IV(a). (f) Limited Liability Companies. Minnesota, like every other state in the U.S., has adopted a limited liability company (LLC) law. Thus, in addition to the traditional choices of a sole proprietorship, partnership, or corporation, a business that operates in Minnesota may also choose to operate in the form of an LLC. In most states, LLCs are very attractive entities for many small businesses, in that they offer the same protection as a corporation from creditors for debts of the business, while offering much of the flexibility plus the flow-through tax treatment of a partnership for federal tax purposes. However, LLCs are subject to the annual fee described in Section IV(a). See Section IV(c) for a discussion of the income tax treatment of LLCs under Minnesota tax laws. To form an LLC under the laws of Minnesota, one or more persons must file articles of organization with the Minnesota Secretary of State, which must be accompanied by filing fees of $135. Minnesota state law also allows formation of one-owner LLCs, which now qualify for treatment as sole proprietorships for federal tax purposes. Foreign LLCs, those formed under the laws of another state, must obtain a certificate of authority to do business in Minnesota, by filing an application for a certificate of authority with the secretary of state and paying a filing fee of $185. In addition to initial filing fees, all LLCs operating in Minnesota must subsequently file biennial reports every other year. The secretary of state will send out a preprinted form to the LLC before it becomes due. No fee is required, unless it is filed late or it is necessary to change any of the preprinted information on the form, in which case a $35 filing fee applies. Effective in 2001, annual, rather than biennial, reports are required. Professional LLCs must file annual reports, with a $25 fee. For more information on filing articles of organization for an LLC, see the contact information for the offices of the Minnesota Secretary of State, listed in Section VI(a). III. BUSINESS ACQUISITIONS (a) In General. When acquiring an existing business, there are a number of state legal and tax issues you or, preferably, your business attorney, should attend to before closing the purchase. These include matters such as doing a title search for any real property that is being acquired, checking for any recorded security interests on personal property items, and thoroughly researching county, state, and federal records for any judgment liens, tax liens, or other liens, before property is acquired. You will also benefit from consulting a tax advisor before the agreement of sale is negotiated, in order to seek a structuring of the agreement so that the purchase price is allocated among the assets in a way that favors you. You may be able to obtain considerable tax savings if the purchase price is allocated in a way that gives you the best possible tax results under federal and state income tax laws, and other state tax laws, such as sales/use tax or property tax laws. Depending upon the state (or states) in which the seller's assets are located, you may also have to comply with state bulk sale or bulk transfer laws. You should also obtain tax releases from various state taxing agencies, as discussed below. (b) Bulk Sale Laws. Typical bulk sale laws require either publication of legal notices to all creditors in advance of the sale and recording of such notices in some cases, or maintenance of detailed lists of the property to be transferred, for inspection by the public. Minnesota is one of the states that has repealed its bulk sale laws, so you no longer have to be concerned with this requirement when buying a business in Minnesota. (c) Tax Releases. When you acquire an existing business, you will want to make sure that you do not unwittingly become liable for any unpaid taxes owed by the seller. Typically, to protect yourself, you will need to receive a tax release or releases from various state taxing agencies, for such taxes as sales and use tax, income tax withholding, and state unemployment taxes, in each state in which the seller does business. If you fail to obtain such a release or written statement from the tax agency that the seller is not delinquent on any tax payments, you will be held responsible for such tax if it is not withheld from the purchase price proceeds and paid to the state at the time the sale of the business transpires. In Minnesota, you need to be aware of the Business Successor Liability law, and check for tax liens against the business you are buying. After deciding to acquire a business, check for possible tax liens filed against it by the Minnesota Department of Revenue. First check the county recorder's office in which the business is located, unless it is a sole proprietorship. In that case, check the county in which the owner resides. If the business is a corporation or partnership, also check with the Secretary of State's office. If you find such a lien, you must send a Notice of Business Transfer form to the Department of Revenue, specifying the liens you found and other information about the pending transaction and parties, at least 20 days before the proposed sale. The Commissioner of Revenue will either notify you within 20 days as to how much tax the seller owes (and which must be withheld) or, if you do not hear from the Department of Revenue, you can proceed with the transaction and are not responsible for any more taxes than the amount shown on the tax lien. (d) Unemployment Tax Rating of Seller. In addition to obtaining tax releases, you may find it advantageous to succeed to the seller's unemployment tax experience rating, if the seller has a tax rate lower than you would otherwise obtain as a new business. Perhaps even more importantly, if you are treated as a successor employer, you can count any wages paid during the year already to the acquired employees by the selling company against the annual amount of wages per employee that are subject to tax. For instance, if an employee had already been paid at least the amount of the taxable "wage base" at the time you acquire the business, any wages you subsequently pay to that employee for the rest of the year would not be subject to any further unemployment taxes. To determine if you can obtain the seller's favorable experience rating as a successor employer, contact the Department of Economic Security and, if advantageous to do so, request that you be treated as a successor employer with regard to the acquired employees. IV. MINNESOTA TAXES AND OTHER GENERAL REQUIREMENTS. (a) In General.
Minnesota imposes
relatively high tax rates on individuals and particularly
on businesses, with its high corporate income tax rate. It
also imposes an annual minimum fee, in addition, upon any
corporation, S corporation, partnership, or LLC that does
business in the state, as follows:
(b) State and Local Licensing. Nearly any business, operated anywhere in the United States, will have to have at least one government license of some kind. In most cases, this will be a local license, issued by your city or county. Before you open your business, contact your local city or county hall and find out if your particular business needs one or more local licenses. Most kinds of local business licenses are granted upon payment of a fee, with no further requirements, except possibly for annual or other periodic renewal fees. However, if you are engaging in any kind of food business, you will usually need to also obtain a health department permit and show that you are in compliance with health department food-handling requirements. In addition, be sure to check with an attorney or local government zoning or planning department officials to determine if your business will be in compliance with all local zoning and planning restrictions. If you own or rent any type of facility, you will generally need fire department permits, showing that you meet fire safety codes and any construction or improvements to an existing structure will usually require a building permit. If you intend to simply operate your business from your home, you may be in violation of local zoning requirements, but this is less likely to be a concern if you don't have clients, customers, suppliers, or employees coming to your house on business, on a regular basis. State governments have also traditionally required special licenses for many kinds of professionals, such as physicians, dentists, lawyers, and accountants. To further protect consumers, Minnesota has expanded the list of occupations that must be licensed by the state to include many other occupations. Most state licenses not only require payment of fees, but are only issued for a given profession or occupation upon showing that you have completed certain educational or experience requirements, or passed certain tests, or some combination of the foregoing. For information on state licensing and business registration requirements in Minnesota, see the contact information for the offices of the Department of Trade and Economic Development, Bureau of Business Licenses, listed in Section VI(a). (c) Income and Franchise Taxes. Minnesota has both an individual income tax and a corporate franchise (income) tax. The Minnesota individual income tax is imposed at a maximum tax rate of 7.85% in 2000 and subsequent years. Individual taxpayers generally pay state income tax on their business earnings from a sole proprietorship, or on their share of the earnings of a pass-through entity, such as a partnership, S corporation, or LLC. The Minnesota personal income tax return is Form M-1, which must be filed with the Minnesota Department of Revenue by April 15th of the following year. Partnerships, or entities taxable as partnerships, such as LLCs, are not subject to state income taxation in Minnesota, but must file an information return with the Department of Revenue each year, showing each partner's share of taxable income, losses, and credits, on Form M-3. The partnership information return is due by April 15th of the following year, in the case of a calendar year partnership. Note, however, that like regular corporations or S corporations, partnerships and LLCs may be subject to the "minimum fee" tax described in Section IV(a). Individual taxpayers doing business as sole proprietors, or who are partners in partnerships, or members of LLCs, are required to make payments of estimated Minnesota individual income taxes, on Form M-14, if their net tax liability (not covered by withholding) exceeds $500. Estimated tax payments are due in four installments, on the 15th day of the 4th, 6th, and 9th months of the taxable year, and the 15th day of the first month of the following year. To avoid penalties for underpayment of estimated tax, you must either pay in 90% of the current year's tax, or 100% of the previous year's tax (110% of the previous year's tax, if the previous year's adjusted gross income was over $150,000). The Minnesota corporate income tax rate, on corporations other than S corporations, is 9.8%. The state corporation income tax return is Form M-4, which must be filed with the Department of Revenue by the 15th day of the third month following the end of the taxable year, or by March 15th in the case of a corporation whose taxable year is the calendar year. Corporations are required to make estimated tax payments of their state corporate income tax in advance, if their tax liability for the year equals or exceeds $500. Estimated tax payments are due in advance, in four equal installments, on the 15th day of the 3rd, 6th, 9th, and 12th months of the taxable year. The total estimated tax that must be paid in is usually equal to 90% of the actual tax liability for the year. However, if the preceding year was a full year of 12 months, the current year payments need only be equal to 100% of the prior year's tax liability, if less. The latter exception is not allowed for certain "large corporations," however, which had at least $1 million of taxable income in one of the three preceding tax periods. Penalties will be imposed for failure to make the required estimated tax payments on a timely basis. In Minnesota, a limited liability company (LLC) is taxed in the same manner as a partnership, thus avoiding the possible double taxation of income that can occur with a corporation. Note that under IRS regulations, effective since 1997, an LLC may elect to be treated as a partnership if it has more than one owner, or as a sole proprietorship if it does not, for federal tax purposes. Minnesota law recognizes the validity of a one-owner LLC. However, an LLC that is owned by a corporate parent may not be disregarded for Minnesota tax purposes, as state law does not permit the net income or apportionment factors of separate legal entities to be combined when apportioning the Minnesota taxable income of entities doing business in the state. (d) Sales and Use Tax. Minnesota imposes a general sales tax on retail sales of tangible personal property and certain types of services at the statewide rate of 6.5%. In addition, several local governments have adopted local sales taxes, generally at rates of 0.5% or 1.0%. Sellers are required to obtain a seller's permit and to collect and pay over the state and local sales and use taxes to the Minnesota Department of Revenue. There are numerous exemptions from the sales tax, the most important of which is the resale exemption. If you are a wholesaler or retailer who purchases goods that you will resell, your purchase of such goods may qualify as an exempt sale for resale. Similarly, if you sell goods to wholesalers or retailers for resale by them, your sale may also qualify as an exempt sale for resale. In any such transaction, the exemption is ordinarily available only if the purchaser gives the seller a valid resale certificate, certifying that the items are being purchased for resale, and not for use or consumption by the buyer. A shadow tax, the use tax, is also imposed at the same rate as the sales tax. It is primarily intended to tax property that is acquired from sources outside of the state, in transactions not subject to sales tax, when such property is used or consumed within Minnesota. Use tax may also apply to items purchased on an exempt basis, such as for resale, if such items end up being used or consumed, instead of being resold. Before making any taxable sales, you will need to register with the Department of Revenue on Form ABR, Application for Business Registration. For more information on Minnesota sales and use tax registration and compliance, see contact information for the offices of the Department of Revenue in Section VI(a). (e) Real and Personal Property Taxes. In Minnesota, as in every other state, any business real estate you own will be subject to real property taxes. In general, there is little that you must do, unless you wish to challenge your assessed valuation, since the assessor will bill you for each year's property taxes as they come due. Minnesota, unlike most other states, does not generally impose any property taxes on personal property of any kind, either tangible or intangible, either at the state or local government level. However, there are a few exceptions, such as for lessors who lease personal property, billboards and advertising devices, mobile homes, certain motor vehicles and watercraft, and other items such as equipment of utility companies. (f) Other Business Taxes. Minnesota imposes a number of other taxes on businesses, some of which may affect you. These include:
(g) Trade Names. A trade name, also known as a fictitious or assumed name, is any name used in the course of business that does not include the actual legal names of all the owners of the business. Thus, if your business goes by any name other than your own real name, it is operating under a trade name. The same is true of a corporation, if it operates under a name other than its legal name. A trade name might also be one that suggests the existence of additional owners, by using such words as "company," "associates," or "group." In most states where you do business, it will be necessary to register a trade, fictitious, or assumed name, so that people who do business with you can find out who the actual owners of your business are. You may also want to register any such trade name, as a means of protecting against other companies usurping that particular trade name. Any person or business organization conducting a commercial business in Minnesota under a name other than their full name is required to file a Certificate of Assumed Name with the secretary of state. After filing with the secretary of state, a notice must be published in a qualified newspaper in the county in which the person has a principal or registered office for two successive issues. Forms for this certificate are available by calling the offices of the Minnesota Secretary of State. The filing fee for original assumed names and amendments is $25. The original filing is good for ten years, after which it may be renewed. Original filings and amendments that show changes in the original information must then be published in a legal newspaper qualified for the county of the business' location for two successive issues. V. EMPLOYER REQUIREMENTS IF YOU HAVE EMPLOYEES (a) Employer Registration and Withholding. If you have any employees, you will already be withholding federal income tax and FICA taxes from their wages. Since Minnesota imposes a state income tax on the income of individuals, you will need to also withhold Minnesota income tax from the wages of your employees. Before you begin to pay wages, you must register as an employer with the Department of Revenue on Form ABR, Application for Business Registration, will you can also use to register for sales and use taxes, corporation franchise tax, and other taxes, if applicable. For more information on Minnesota income tax withholding and registration requirements for employers, see the contact information for the offices of the Department of Revenue, listed in Section VI(a). (b) Unemployment and Other State Payroll Taxes. If your business has one or more employees in Minnesota to whom you have paid wages in the prior or current calendar year, you, as an employer, will be required to pay state unemployment tax based on the amount of such wages paid. Employers subject to the Minnesota unemployment tax are required to register with the Department of Economic Security on Form MDES-13, and to obtain a state tax identification number. New employers are required to pay tax at a rate of 1.3% (or 6.2% for construction businesses) in 2000 on the first $19,000 of wages paid to each employee. After you have had employees for a while, you will develop an unemployment tax experience rating. This rating is based on the number of employees you terminate who then claim unemployment benefits and the amount of such benefits paid to those former employees, under complex formulas. The state will inform you when they have assigned you an individual tax rate based on your firm's experience rating. That rate may be higher or, if you have had relatively few benefit claims charged to your account, lower than the standard new employer tax rate you initially were paying. All state unemployment taxes are imposed upon you as the employer, and, under Minnesota law, cannot be charged to your employees or withheld from their wages. For more information on your Minnesota unemployment tax obligations as an employer, see the contact information for the offices of the Department of Economic Security, listed in Section VI(a). (c) Workers' Compensation. Workers' compensation insurance is a state-mandated insurance requirement for most employers, in almost every state. In Minnesota, virtually all businesses with one or more employees are required by law to have workers' compensation insurance, except those able to self-insure. Note, however, that a sole proprietor, a partner in a partnership, or a member of an LLC is generally not considered an employee. Similarly, officers of certain closely-held small corporations, or managing members of certain small LLCs, if the officer or member owns at least 25% of the firm, are not required to be covered for workers' compensation purposes, but may elect such coverage. Workers' compensation provides wage loss and medical benefits to employees injured on the job and it protects you, as an employer, from legal action for damages for injuries or job related illnesses suffered by your employees. In effect, it is a "no-fault" insurance system for work-related injuries or illnesses. Thus, if you fail to obtain required workers' compensation insurance, and an employee is injured on the job, you will have opened yourself to unlimited liability and severe legal consequences, so it is very important to obtain workers' compensation insurance for your employees. Be aware that neither general liability nor health and accident insurance can properly substitute for workers' compensation insurance. As an employer, you must notify injured employees of their benefits and post a notice in the workplace informing your employees of their workers' compensation coverage. You can request copies of preprinted notices from the Minnesota Department of Labor and Industry. For more detailed information regarding your obligations as an employer under the Minnesota workers' compensation laws, contact your insurance carrier or see the contact information for the offices of Department of Labor and Industry, listed in Section VI(a). (d) State Wage and Hour Laws. Some employees of certain small firms not engaged in interstate commerce are not covered by the federal minimum wage and overtime laws. However, even if few or none of your employees are covered by the federal wage-hour laws, if, for example, because your firm does less than $500,000 a year in gross sales and the employees in question are not deemed to "...engage in (interstate) commerce...," they will still generally be subject to the Minnesota wage-hour laws, which provide for a state minimum hourly wage that is currently $4.90 an hour for such small employers (or $5.15 an hour for all other employers.) Minnesota law requires overtime premium be paid, at the rate of one-and-one-half times the regular rate of pay, for overtime hours worked in excess of 48 hours per week. Note that, as under federal wage-hour laws, certain classes of executive, administrative, and professional employees are exempted from the Minnesota wage-hour rules. Besides the federal wage-hour posters that you must display in the workplace, you must also display a state wage-hour poster, which you can obtain from the Department of Labor and Industry, Division of Labor Standards. In addition to wage-hour laws, most businesses are subject to federal child labor laws, which put numerous restrictions on the working hours and kinds of work in which minors under the age of 18 may engage. Your business must also be cognizant of similar state child labor laws, in Minnesota. (e) State Occupational Safety and Health Laws. Nearly half of the states have their own OSHA-like agency, charged with administering the state's own occupational safety and health laws. The remaining states have no such enforcement agency, and thus rely instead on the federal Occupational Safety and Health Administration (OSHA) to administer the federal job safety rules within such states. Minnesota is one of the states that has its own OSHA-type agency. To determine if your workplace is in compliance with federal and Minnesota job safety requirements, you may wish to contact the OSHA Consultation Division of the Minnesota Department of Labor and Industry and request a free on-site safety consultation. You will not be cited for any violations detected, provided that you promptly correct the unsafe conditions. This differs from the rules for consultations by federal OSHA inspectors, who are required to cite you for any violations they find. For information on your job safety and health obligations as an employer, required posters, and possible on-site safety consultations, see the contact information for the offices of the OSHA Consultation Division, listed in Section VI(a). (f) Other Miscellaneous State Labor Laws. Other Minnesota labor laws you need to be aware of, as an employer, include the following: (1) Wage payments to employees. Employers of workers engaged in work of a transitory nature, such as construction or repair work, must pay wages at least every 15 days. Otherwise, wages must generally be paid not less frequently than every 30 days, on a designated payday. Workers who quit their jobs must generally be paid no later than the next regular payday, with some exceptions. Workers who are discharged by the employer must generally be paid final wages within 24 hours of discharge, however, unless the employee requests payment by mail. (2) Right-to-work laws. About half the states have enacted "right-to-work" laws, which guarantee that no person may be denied employment for refusing to join a union or for not paying union dues, thus banning either "union shop" or "agency shop" agreements, or both. In a union shop, an employee not belonging to a union may be hired but then must join the union, usually within 30 days. In an agency shop, an employee need not join the union but, to remain employed, must pay union dues. Minnesota does not have such a right-to-work law and allows union shop or agency shop contracts between an employer and a union. (3) State anti-discrimination laws. In addition to complying with federal anti-discrimination laws, employers must also be aware of and comply with state civil rights laws in Minnesota, and display a poster informing employees of their rights. You can obtain this poster from the St. Paul office of the Department of Human Rights, at the address listed in Section VI(a). (4) Reporting new hires. Under federal welfare reform laws, employers in all are now required to report all newly-hired (or rehired) employees to a designated state agency (the Department of Human Services for Minnesota employers) within 20 days after the date of hire. See the contact information for the New Hire Reporting Center in Section VI(a). (5) Family Leave Laws. Minnesota has adopted its own family leave provisions, somewhat similar to the federal Family and Medical Leave Act. However, the parental leave and sick or injured child leave provisions of the Minnesota law apply to any employer with 21 or more employees at one work site. Only employees with at least 12 months of service and who work full-time or at least half of full-time, are counted. Employers are required to grant 6 weeks of unpaid parental leave to a covered employee in connection with the birth or adoption of a child. In addition, a worker may use personal sick leave benefits to care for a sick or injured child, as well as for his or her own illness, to the extent the employer provides sick leave benefits. In addition, any employer of one or more employees in the state of Minnesota must grant up to 16 hours a year of unpaid leave for parents to attend school conferences and school activities of their children. VI. STATE SOURCES OF HELP AND INFORMATION (a) Key State Agencies Contact Information. Minnesota, as many states have done in recent years, has set up a "one-stop" center to help your new or existing businesses to obtain all necessary state licenses and permits from a single office. You can register your business with the state for Minnesota corporation franchise, sales and use tax, and employer withholding of state income tax on a single state application form, Form ABR, Application for Business Registration. To obtain business registration forms or helpful publications such as the free 250-page Guide to Starting a Business in Minnesota, or other information on starting or relocating your business in Minnesota, contact:
Addresses and other contact information for other key Minnesota state government agencies mentioned in this book are listed below for your convenience. SECRETARY OF STATE. Contact the office of the secretary of state for information on:
(b) Small Business Development Centers. A number of Small Business Development Centers (SBDCs) are located throughout Minnesota to assist you. These centers, usually located on college campuses, provide a wealth of start-up information and sponsor frequent business-oriented seminars. Contact the lead office below for information, or for the location of other SBDCs nearer to you.
(c) Internet Sites. If you have access to the Internet, there is a wealth of state and even local business information provided by state and local governments. All states now have a state government Web page, and most major state agencies also have sites on the Internet where you can obtain useful small business information on matters such as state taxes, financing sources, or the addresses and phone numbers (or e-mail addresses) of various state and federal agencies' offices in Minnesota. Since new sites are appearing constantly, you might also want to search for other Minnesota government Web sites by using one of the popular Internet search engines, such as Excite! or Yahoo. To start your Internet search for Minnesota government information, you may want to begin with the following Internet sites: State of Minnesota home page list of government agency links: Minnesota Small Business Assistance Office (publications, assistance to new and small businesses): Minnesota Secretary of State web site (corporate, LLC, and partnership filings, assumed name filings): Minnesota Department of Revenue (downloadable tax forms): Department of Labor and Industry: Minnesota New Hire Reporting Center:(d) Financing Sources. For information and help on locating financing for your small business, contact the nearest U.S. Small Business Administration office in Minnesota, or contact the Minnesota Department of Trade and Economic Development regarding the Capital Access program and other state sources of financial assistance, at the address listed in Section VI(a) for that agency. The address of the main SBA Office in Minnesota is:
|
Copyright © 2000 Michael D. Jenkins
|