Commercial cleaning and janitorial insurance in Minnesota

Minnesota's rules for cleaning companies: classify, register, collect

Start with who's on your payroll. Minn. Stat. 181.722, amended in 2024, applies in every industry (construction has extra rules in section 181.723) and uses the workers' comp and unemployment tests to decide who's an employee. Damages can include the worker's lost wages, overtime, benefits and the employer's share of payroll taxes. Penalties run up to $10,000 per misclassified person and up to $10,000 per violation, and each misclassifying contract a worker signs is its own violation. Owners and officers who knowingly or repeatedly misclassify can be held individually liable. Talk to an employment attorney before you pay cleaners on a 1099.

Registration and sales tax

File your entity, or an assumed-name certificate (Minn. Stat. 333.01), with the Minnesota Secretary of State, then apply to the Department of Revenue for a sales tax permit. We found no state license for commercial cleaning; the tax permit is the state-level requirement. We found no general city license for cleaning firms in Minneapolis or St. Paul either; their local rules cover labor.

Minn. Stat. 297A.61, subd. 3(g)(6)(iii), makes building cleaning, maintenance and disinfecting services a taxable sale. The state rate is 6.875% (a 6.5% general rate plus a constitutionally required 0.375%), and local taxes can apply on top. The Department of Revenue's Building Cleaning and Maintenance guide adds details a bidder needs:

• Parking ramp cleaning is taxable; maintaining outdoor parking lots isn't.
• Final cleaning after construction is taxable, but separate charges for hauling construction debris aren't.
• Maintenance is taxable and repair isn't. A contract that mixes the two is taxed in full unless the nontaxable work is listed separately.
• When a builder on a nontaxable construction contract hires a sub to clean, the builder still pays tax on that cleaning.
• Supplies used up directly in the cleaning can be bought exempt with Form ST3; equipment such as vacuums is taxable.
• State agencies can't use their direct pay authorization for building cleaning, so they pay the tax to you.

Confirm the current rules with the Minnesota Department of Revenue or your CPA.

Schools

Under Minn. Stat. 123B.03, a school district must check its new hires through the Bureau of Criminal Apprehension (BCA) and may, at its discretion, request a BCA check on anyone who enters a school to work as an independent contractor. If it does, that person must first sign a consent form and pay the cost, unless the district covers it. Expect it in the contract terms.

Minnesota comp from your first W-2 cleaner

Minnesota sets no minimum headcount: once you have an employee, you need comp (Minn. Stat. 176.181). The commissioner can fine you up to $1,000 per employee for every week out of compliance and order you to stop employing anyone until you're insured. Willfully and intentionally going without is a gross misdemeanor.

Minn. Stat. 176.041 leaves some owners off the policy unless they elect coverage by written notice to the insurer:

• sole proprietors and partners, and their spouse, parents and children
• an LLC manager with a 25%-plus stake, when the LLC has no more than 10 members and logged fewer than 22,880 payroll hours in the prior calendar year
• an executive officer with a 25%-plus stake in a closely held corporation under the same 22,880-hour mark

Minnesota rates comp through its own bureau, the Minnesota Workers' Compensation Insurers Association (MWCIA), which publishes advisory pure premiums by class, so confirm your janitorial class with your carrier.

The RFP doesn't list a fidelity bond; when a buyer does, see our janitorial bond guide. Our contract insurance requirements guide explains the endorsements.

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Minnesota risks for cleaning payrolls

Wage floors that change at the city line

Minneapolis's minimum is $16.37 for every employer from January 1, 2026. St. Paul's is $16.37 for employers with 101 or more workers from January 1, 2026 and for those with 6 to 100 from July 1, 2026, and $14.25 for five or fewer. The statewide minimum is $11.41 in 2026 and rises to $11.87 on January 1, 2027. A route that crosses those lines needs hours tracked by location.

Sick and safe time for part-time crews

Employees expected to work at least 80 hours a year for a Minnesota employer earn one hour of earned sick and safe time per 30 hours worked, up to 48 hours a year unless you agree to more, paid at the same base rate they earn while working. Minneapolis and St. Paul have their own ordinances, and employers must follow whichever requirement is most favorable to the employee. New state ESST rules took effect July 6, 2026.

Minnesota cities and their local rules

Minnesota cost factors

Minnesota's comp trend has been friendly. The Commerce Department's February 2026 rate report says MWCIA pure premiums have drifted lower over the past decade, with drops of 12% in 2017, 7% in 2018, 7% in 2022 and 10% in 2024, and that carriers' average loss cost multiplier is 1.67. Your payroll and class still drive your bill.

Your price depends on the payroll in each class code, your annual sales, the kinds of buildings you clean, how much specialty and chemical work you do, the vehicles your crews drive, your claims history and the limits your contracts require. See our cleaning insurance cost guide.

Get a quote for your cleaning business →

Commercial Cleaning Insurance Group is a brand of The Allen Thomas Group, licensed in Minnesota (License #40821720, NPN 7642818).

Janitorial contractors in Bloomington, Mankato, St. Cloud or anywhere else in the state can request quotes through our form.