Critical Business Exemption | Minnesota Shelter-In-Place Order
On March 25 , 2020, the Honorable Tim Walz, Governor of the State of Minnesota, issued a “Shelter-In-Place” Emergency Executive Order 20-20. The Executive Order mandates all persons in Minnesota to stay at home or in their place residence, unless they go out to engage in certain activities or do work for a business which is designated as a critical business (in some states, critical business is called “essential business”). I will first discuss the definition of the critical business exemption and its importance; then, I will provide a list of industries that fall under the critical business exemption based on NAICS codes.
Critical Business Exemption: Importance
The critical business exemption is very important for many business and tax reasons. Let’s briefly discuss the two most important of them.
First, from a business perspective, it is very important for business to continue to operate; a shutdown of two weeks may deal a critical blow to a business’ ability to remain profitable and meet all of its clients’ demands. Hence, the very existence of a business may depend on its eligibility for a critical business exemption.
Second, a non-exempt business will have to make a tough choice between laying off all of its employees and paying forced leave of absence. Prior to April 1, 2020, the forced leave of absence will not be compensated by the federal government. Starting April 1, 2020, however, pursuant to the Families First Coronavirus Response Act (“FFCRA”), employees are entitled to certain paid leave as well as potentially expanded family and medical leave for COVID-19 related reasons. In return, eligible employers will receive a compensation from the federal government in the form of a Paid Sick Leave Tax Credit.
These are just two of numerous examples of the importance of the critical business exemption.
Critical Business Exemption: Definition Sources
In order for a business to exempt its workers from the requirements of the Governor’s Executive Order 20-20, two conditions must be satisfied: (1) a business must fall within the definition of a critical business, and (2) a worker cannot perform work duties from home.
There are three resources that provide guidance to help you determine if your business is in a critical industry:
- The U.S. Department of Homeland Security’s Memorandum on Identification of Essential Critical Infrastructure Workers During COVID-19 Response (“CISA”). This is the federal government’s definition of critical industries.
- The aforementioned is Governor’s Executive Order 20-20. The order sets forth all sources of the critical business exemption definition as well as certain general categories of exempt businesses.
- The designation of critical industries based on NAICS Codes. This the most detailed and most comprehensive list of critical industries for many businesses. I provided the list below as it existed as of March 26, 2020.
The analysis should start from CISA categories. If your business does not fall within any of the CISA categories, then you proceed with the examination of the categories listed in the Executive Order 20-20. Finally, if neither of the first two sources provides an answer (for example, if you are a tax accountant, this would be the case), then you need to look at the NAICS Codes. If your business falls within any of the critical industry categories described in either of these documents, then, you will satisfy the first condition for exempting your workers from Minnesota Shelter-in-Place order.
Critical Business Exemption: Inability to Perform Work Duties from Home
If a business belongs to one of the critical industries, an employee can leave home to work only if he cannot perform his duties from home. It is important to understand that Executive Order 20-20 requires all employees who can work from home to do so, even if they are eligible for a critical business exemption.
Critical Business Exemption: NAICS Codes
For the convenience of the readers, I provided this list of companies eligible (and ineligible) for Minnesota critical business exemption based on NAICS Codes. This list was originally published by MN DEED (Minnesota Department of Employment and Economic Development); it is up-to-date through March 26, 2020.
As a Minnesota-based US international tax law firm which deals with highly-confidential information, Sherayzen Law Office falls within an exemption under NAICS code 5412.
| Industry Description | Industry Code | Critical Industry |
| Oilseed and Grain Farming | 1111 | YES |
| Vegetable and Melon Farming | 1112 | YES |
| Fruit and Tree Nut Farming | 1113 | YES |
| Greenhouse, Nursery, and Floriculture Production | 1114 | YES |
| Other Crop Farming | 1119 | YES |
| Cattle Ranching and Farming | 1121 | YES |
| Hog and Pig Farming | 1122 | YES |
| Poultry and Egg Production | 1123 | YES |
| Other Animal Production | 1129 | YES |
| Timber Tract Operations | 1131 | YES |
| Forest Nurseries and Gathering of Forest Products | 1132 | YES |
| Logging | 1133 | YES |
| Fishing | 1141 | YES |
| Hunting and Trapping | 1142 | YES |
| Support Activities for Crop Production | 1151 | YES |
| Support Activities for Animal Production | 1152 | YES |
| Support Activities for Forestry | 1153 | YES |
| Oil and Gas Extraction | 2111 | YES |
| Metal Ore Mining | 2122 | YES |
| Nonmetallic Mineral Mining and Quarrying | 2123 | NO |
| Support Activities for Mining | 2131 | YES |
| Residential Building Construction | 2361 | YES |
| Nonresidential Building Construction | 2362 | YES |
| Utility System Construction | 2371 | YES |
| Land Subdivision | 2372 | YES |
| Highway, Street and Bridge Construction | 2373 | YES |
| Other Heavy and Civil Engineering Construction | 2379 | YES |
| Foundation, Structure and Building Exterior Contractors | 2381 | YES |
| Building Equipment Contractors | 2382 | YES |
| Building Finishing Contractors | 2383 | YES |
| Other Specialty Trade Contractors | 2389 | YES |
| Grain and Oilseed Milling | 3112 | YES |
| Sugar and Confectionery Product Manufacturing | 3113 | YES |
| Fruit and Vegetable Preserving and Specialty Food Manufacturing | 3114 | YES |
| Dairy Product Manufacturing | 3115 | YES |
| Animal Slaughtering and Processing | 3116 | YES |
| Bakeries and Tortilla Manufacturing | 3118 | YES |
| Other Food Manufacturing | 3119 | YES |
| Beverage Manufacturing | 3121 | YES |
| Fabric Mills | 3132 | NO |
| Textile Furnishings Mills | 3141 | NO |
| Other Textile Product Mills | 3149 | NO |
| Cut and Sew Apparel Manufacturing | 3152 | NO |
| Leather and Hide Tanning and Finishing | 3161 | NO |
| Sawmills and Wood Preservation | 3211 | NO |
| Veneer, Plywood and Engineered Wood Product Manufacturing | 3212 | NO |
| Other Wood Product Manufacturing | 3219 | YES |
| Pulp, Paper and Paperboard Mills | 3221 | YES |
| Converted Paper Product Manufacturing | 3222 | YES |
| Printing and Related Support Activities | 3231 | NO |
| Petroleum and Coal Products Manufacturing | 3241 | YES |
| Basic Chemical Manufacturing | 3251 | YES |
| Resin, Synthetic Rubber and Artificial Synthetic Fibers and Filaments Manufacturing | 3252 | NO |
| Pesticide, Fertilizer and Other Agricultural Chemical Manufacturing | 3253 | YES |
| Pharmaceutical and Medicine Manufacturing | 3254 | YES |
| Paint, Coating and Adhesive Manufacturing | 3255 | NO |
| Soap, Cleaning Compound and Toilet Preparation Manufacturing | 3256 | YES |
| Other Chemical Product and Preparation Manufacturing | 3259 | YES |
| Plastics Product Manufacturing | 3261 | YES |
| Rubber Product Manufacturing | 3262 | YES |
| Glass and Glass Product Manufacturing | 3272 | NO |
| Cement and Concrete Product Manufacturing | 3273 | NO |
| Other Nonmetallic Mineral Product Manufacturing | 3279 | NO |
| Steel Product Manufacturing from Purchased Steel | 3312 | YES |
| Alumina and Aluminum Production and Processing | 3313 | YES |
| Foundries | 3315 | YES |
| Forging and Stamping | 3321 | YES |
| Cutlery and Handtool Manufacturing | 3322 | NO |
| Industry Description | Industry Code | Critical Industry |
| Architectural and Structural Metals Manufacturing | 3323 | NO |
| Boiler, Tank and Shipping Container Manufacturing | 3324 | YES |
| Hardware Manufacturing | 3325 | NO |
| Spring and Wire Product Manufacturing | 3326 | NO |
| Machine Shops, Turned Product and Screw, Nut and Bolt Manufacturing | 3327 | YES |
| Coating, Engraving, Heat Treating and Allied Activities | 3328 | NO |
| Other Fabricated Metal Product Manufacturing | 3329 | NO |
| Agriculture, Construction and Mining Machinery Manufacturing | 3331 | YES |
| Industrial Machinery Manufacturing | 3332 | YES |
| Commercial and Service Industry Machinery Manufacturing | 3333 | YES |
| Ventilation, Heating, Air-Conditioning and Commercial Refrigeration Equipment Manufacturing | 3334 | YES |
| Metalworking Machinery Manufacturing | 3335 | NO |
| Engine, Turbine and Power Transmission Equipment Manufacturing | 3336 | NO |
| Other General Purpose Machinery Manufacturing | 3339 | NO |
| Computer and Peripheral Equipment Manufacturing | 3341 | YES |
| Communications Equipment Manufacturing | 3342 | YES |
| Audio and Video Equipment Manufacturing | 3343 | YES |
| Semiconductor and Other Electronic Component Manufacturing | 3344 | YES |
| Navigational, Measuring, Electromedical and Control Instruments Manufacturing | 3345 | YES |
| Manufacturing and Reproducing Magnetic and Optical Media | 3346 | NO |
| Electrical Equipment Manufacturing | 3353 | YES |
| Other Electrical Equipment and Component Manufacturing | 3359 | YES |
| Motor Vehicle Manufacturing | 3361 | NO |
| Motor Vehicle Body and Trailer Manufacturing | 3362 | NO |
| Motor Vehicle Parts Manufacturing | 3363 | NO |
| Aerospace Product and Parts Manufacturing | 3364 | NO |
| Railroad Rolling Stock Manufacturing | 3365 | NO |
| Ship and Boat Building | 3366 | NO |
| Other Transportation Equipment Manufacturing | 3369 | NO |
| Household and Institutional Furniture and Kitchen Cabinet Manufacturing | 3371 | NO |
| Office Furniture (including Fixtures) Manufacturing | 3372 | NO |
| Other Furniture Related Product Manufacturing | 3379 | NO |
| Medical Equipment and Supplies Manufacturing | 3391 | YES |
| Other Miscellaneous Manufacturing | 3399 | NO |
| Electric Power Generation, Transmission and Distribution | 2211 | YES |
| Natural Gas Distribution | 2212 | YES |
| Water, Sewage and Other Systems | 2213 | YES |
| Motor Vehicle and Motor Vehicle Parts and Supplies Merchant Wholesalers | 4231 | YES |
| Furniture and Home Furnishing Merchant Wholesalers | 4232 | NO |
| Lumber and Other Construction Materials Merchant Wholesalers | 4233 | YES |
| Professional and Commercial Equipment and Supplies Merchant Wholesalers | 4234 | YES |
| Metal and Mineral (except Petroleum) Merchant Wholesalers | 4235 | YES |
| Electrical and Electronic Goods Merchant Wholesalers | 4236 | YES |
| Hardware, Plumbing, Heating Equipment and Supplies Merchant Wholesalers | 4237 | YES |
| Machinery, Equipment and Supplies Merchant Wholesalers | 4238 | YES |
| Miscellaneous Durable Goods Merchant Wholesalers | 4239 | NO |
| Paper and Paper Product Merchant Wholesalers | 4241 | YES |
| Drugs and Druggists’ Sundries Merchant Wholesalers | 4242 | YES |
| Apparel, Piece Goods and Notions Merchant Wholesalers | 4243 | NO |
| Grocery and Related Product Merchant Wholesalers | 4244 | YES |
| Farm Product Raw Material Merchant Wholesalers | 4245 | YES |
| Chemical and Allied Products Merchant Wholesalers | 4246 | YES |
| Petroleum and Petroleum Products Merchant Wholesalers | 4247 | YES |
| Beer, Wine and Distilled Alcoholic Beverage Merchant Wholesalers | 4248 | YES |
| Miscellaneous Nondurable Goods Merchant Wholesalers | 4249 | YES |
| Wholesale Electronic Markets, Agents and Brokers | 4251 | YES |
| Automobile Dealers | 4411 | NO |
| Other Motor Vehicle Dealers | 4412 | NO |
| Automotive Parts, Accessories and Tire Stores | 4413 | YES |
| Furniture Stores | 4421 | NO |
| Home Furnishings Stores | 4422 | NO |
| Electronics and Appliance Stores | 4431 | NO |
| Building Material and Supplies Dealers | 4441 | YES |
| Lawn and Garden Equipment and Supplies Stores | 4442 | NO |
| Grocery Stores | 4451 | YES |
| Specialty Food Stores | 4452 | YES |
| Beer, Wine and Liquor Stores | 4453 | YES |
| Health and Personal Care Stores | 4461 | YES |
| Industry Description | Industry Code | Critical Industry |
| Gasoline Stations | 4471 | YES |
| Clothing Stores | 4481 | NO |
| Shoe Stores | 4482 | NO |
| Jewelry, Luggage and Leather Goods Stores | 4483 | NO |
| Sporting Goods, Hobby and Musical Instrument Stores | 4511 | NO |
| Book, Periodical and Music Stores | 4512 | NO |
| Department Stores | 4522 | YES |
| General Merchandise Stores, including Warehouse Clubs and Supercenters | 4523 | YES |
| Florists | 4531 | NO |
| Office Supplies, Stationery and Gift Stores | 4532 | NO |
| Used Merchandise Stores | 4533 | NO |
| Other Miscellaneous Store Retailers | 4539 | NO |
| Electronic Shopping and Mail-Order Houses | 4541 | NO |
| Vending Machine Operators | 4542 | NO |
| Direct Selling Establishments | 4543 | NO |
| Scheduled Air Transportation | 4811 | YES |
| Nonscheduled Air Transportation | 4812 | YES |
| Rail Transportation | 4821 | YES |
| Deep Sea, Coastal and Great Lakes Water Transportation | 4831 | YES |
| Inland Water Transportation | 4832 | YES |
| General Freight Trucking | 4841 | YES |
| Specialized Freight Trucking | 4842 | YES |
| Urban Transit Systems | 4851 | YES |
| Taxi and Limousine Service | 4853 | YES |
| School and Employee Bus Transportation | 4854 | YES |
| Other Transit and Ground Passenger Transportation | 4859 | YES |
| Pipeline Transportation of Crude Oil | 4861 | YES |
| Pipeline Transportation of Natural Gas | 4862 | YES |
| Other Pipeline Transportation | 4869 | YES |
| Scenic and Sightseeing Transportation, Land | 4871 | NO |
| Scenic and Sightseeing Transportation, Water | 4872 | NO |
| Support Activities for Air Transportation | 4881 | YES |
| Support Activities for Rail Transportation | 4882 | YES |
| Support Activities for Water Transportation | 4883 | YES |
| Support Activities for Road Transportation | 4884 | YES |
| Freight Transportation Arrangement | 4885 | YES |
| Other Support Activities for Transportation | 4889 | YES |
| Postal Service | 4911 | YES |
| Couriers | 4921 | YES |
| Local Messengers and Local Delivery | 4922 | YES |
| Warehousing and Storage | 4931 | YES |
| Newspaper, Periodical, Book and Directory Publishers | 5111 | YES |
| Software Publishers | 5112 | YES |
| Motion Picture and Video Industries | 5121 | NO |
| Sound Recording Industries | 5122 | NO |
| Radio and Television Broadcasting | 5151 | YES |
| Cable and Other Subscription Programming | 5152 | YES |
| Telecommunications Resellers | 5173 | YES |
| Data Processing, Hosting and Related Services | 5182 | YES |
| Other Information Services | 5191 | YES |
| Monetary Authorities – Central Bank | 5211 | YES |
| Depository Credit Intermediation | 5221 | YES |
| Nondepository Credit Intermediation | 5222 | YES |
| Activities Related to Credit Intermediation | 5223 | YES |
| Securities and Commodity Contracts Intermediation and Brokerage | 5231 | YES |
| Securities and Commodity Exchanges | 5232 | YES |
| Other Financial Investment Activities | 5239 | YES |
| Insurance Carriers | 5241 | YES |
| Agencies, Brokerages and Other Insurance Related Activities | 5242 | YES |
| Lessors of Real Estate | 5311 | YES |
| Offices of Real Estate Agents and Brokers | 5312 | YES |
| Activities Related to Real Estate | 5313 | YES |
| Automotive Equipment Rental and Leasing | 5321 | NO |
| Consumer Goods Rental | 5322 | NO |
| General Rental Centers | 5323 | NO |
| Commercial and Industrial Machinery and Equipment Rental and Leasing | 5324 | NO |
| Lessors of Nonfinancial Intangible Assets (except Copyrighted Works) | 5331 | NO |
| Legal Services | 5411 | YES |
| Industry Description | Industry Code | Critical Industry |
| Accounting, Tax Preparation, Bookkeeping and Payroll Services | 5412 | YES |
| Architectural, Engineering and Related Services | 5413 | YES |
| Specialized Design Services | 5414 | NO |
| Computer Systems Design and Related Services | 5415 | YES |
| Management, Scientific and Technical Consulting Services | 5416 | YES |
| Scientific Research and Development Services | 5417 | YES |
| Advertising and Related Services | 5418 | NO |
| Other Professional, Scientific and Technical Services | 5419 | YES |
| Management of Companies and Enterprises | 5511 | YES |
| Office Administrative Services | 5611 | NO |
| Facilities Support Services | 5612 | YES |
| Employment Services | 5613 | NO |
| Business Support Services | 5614 | NO |
| Travel Arrangement and Reservation Services | 5615 | NO |
| Investigation and Security Services | 5616 | YES |
| Services to Buildings and Dwellings | 5617 | YES |
| Other Support Services | 5619 | NO |
| Waste Collection | 5621 | YES |
| Waste Treatment and Disposal | 5622 | YES |
| Remediation and Other Waste Management Services | 5629 | YES |
| Elementary and Secondary Schools | 6111 | YES |
| Junior Colleges | 6112 | YES |
| Colleges, Universities and Professional Schools | 6113 | YES |
| Business Schools and Computer and Management Training | 6114 | YES |
| Technical and Trade Schools | 6115 | YES |
| Other Schools and Instruction | 6116 | YES |
| Educational Support Services | 6117 | YES |
| Offices of Physicians | 6211 | YES |
| Offices of Dentists | 6212 | YES |
| Offices of Other Health Practitioners | 6213 | YES |
| Outpatient Care Centers | 6214 | YES |
| Medical and Diagnostic Laboratories | 6215 | YES |
| Home Health Care Services | 6216 | YES |
| Other Ambulatory Health Care Services | 6219 | YES |
| General Medical and Surgical Hospitals | 6221 | YES |
| Psychiatric and Substance Abuse Hospitals | 6222 | YES |
| Specialty (except Psychiatric and Substance Abuse) Hospitals | 6223 | YES |
| Nursing Care Facilities (Skilled Nursing Facilities) | 6231 | YES |
| Residential Intellectual and Developmental Disability, Mental Health and Substance Abuse Facilities | 6232 | YES |
| Continuing Care Retirement Communities and Assisted Living Facilities for the Elderly | 6233 | YES |
| Other Residential Care Facilities | 6239 | YES |
| Individual and Family Services | 6241 | YES |
| Community Food and Housing and Emergency and Other Relief Services | 6242 | YES |
| Vocational Rehabilitation Services | 6243 | YES |
| Child Day Care Services | 6244 | YES |
| Performing Arts Companies | 7111 | NO |
| Spectator Sports | 7112 | NO |
| Promoters of Performing Arts, Sports, and Similar Events | 7113 | NO |
| Agents and Managers for Artists, Athletes, Entertainers and Other Public Figures | 7114 | NO |
| Independent Artists, Writers and Performers | 7115 | NO |
| Museums, Historical Sites and Similar Institution | 7121 | NO |
| Amusement Parks and Arcades | 7131 | NO |
| Gambling Industries | 7132 | NO |
| Other Amusement and Recreation Industries | 7139 | NO |
| Traveler Accommodation | 7211 | NO |
| RV (Recreational Vehicle) Parks and Recreational Camps | 7212 | YES |
| Rooming and Boarding Houses | 7213 | NO |
| Special Food Services | 7223 | YES |
| Drinking Places (Alcoholic Beverages) | 7224 | NO |
| Restaurants | 7225 | YES |
| Automotive Repair and Maintenance | 8111 | YES |
| Electronic and Precision Equipment Repair and Maintenance | 8112 | NO |
| Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance | 8113 | NO |
| Personal and Household Goods Repair and Maintenance | 8114 | NO |
| Personal Care Services | 8121 | NO |
| Death Care Services | 8122 | YES |
| Drycleaning and Laundry Services | 8123 | YES |
| Other Personal Services | 8129 | YES |
| Industry Description | Industry Code | Critical Industry |
| Religious Organizations | 8131 | YES |
| Grantmaking and Giving Services | 8132 | NO |
| Social Advocacy Organizations | 8133 | NO |
| Civic and Social Organizations | 8134 | NO |
| Business, Professional, Labor, Political and Similar Organizations | 8139 | NO |
| Private Households | 8141 | YES |
| Executive, Legislative and Other General Government Support | 9211 | YES |
| Justice, Public Order and Safety Activities | 9221 | YES |
| Administration of Human Resource Programs | 9231 | YES |
| Administration of Environmental Quality Programs | 9241 | YES |
| Administration of Housing Programs, Urban Planning and Community Development | 9251 | YES |
| Administration of Economic Programs | 9261 | YES |
| Space Research and Technology | 9271 | NO |
| National Security and International Affairs | 9281 | YES |