This bill proposes amendments to Minnesota Statutes, section 181.725, to address worker misclassification. It mandates that beginning March 1, 2026, and annually thereafter, partnership entities of the Intergovernmental Misclassification Enforcement and Education Partnership submit reports to legislative committees overseeing labor. These reports must include estimates on:

1. The number of workers misclassified.
   
2. The financial impact of misclassification on workers.
   
3. The effects on legitimate businesses competing against those misclassifying workers.
   
4. The distribution of misclassification by industry to guide enforcement priorities.
   

Additionally, agencies must provide estimates regarding the impact of misclassification on various state programs, including unemployment insurance, family and medical benefit insurance, income tax collection, and workers’ compensation. The Departments of Employment and Economic Development, Revenue, and Labor and Industry must contribute to these reports.

The bill also includes appropriations for fiscal years 2026 and 2027, allocating funds from the general fund to multiple agencies—including the Department of Labor and Industry, Department of Revenue, Department of Employment and Economic Development, Department of Commerce, and the Attorney General’s Office—for misclassification fraud analysis. These funds will support efforts to estimate misclassification rates and assess impacts on state programs and funds.