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RELEVANT LINKS: <br />League of Minnesota Cities Handbook for Minnesota Cities 10/15/2018 <br />Expenditures, Purchasing, and Contracts Chapter 22 | Page 39 <br /> C. Indemnification clauses <br />Minn. Stat. § 337.02. <br />LMC information memo, <br />Making and Managing City <br />Contracts, Section IV-A, <br />Defense and indemnification. <br /> <br /> <br />Minn. Stat. § 337.05, subd. <br />1. Engineering & Const. v. <br />LH Bolduc Co., 825 N.W.2d <br />695 (Minn. 2013). <br />Indemnification agreements generally provide that the contractor promises <br />to defend, indemnify, and hold the city harmless from any and all damages <br />arising out of the contract. State law limits the enforceability of indemnity <br />clauses in building and construction contracts to only defending, <br />indemnifying, and holding the city harmless for damages arising out of the <br />contractor’s own wrongful conduct (or from conduct of contractor’s <br />agents, employees, or delegates). However, indemnifying a party to a <br />construction contract for damages resulting from something other than the <br />promisor’s own wrongful conduct generally is not enforceable. An <br />exception to this exists, however, allowing enforcement of indemnity <br />clauses when the contractor fails to comply with a contract provision to <br />furnish a bond or insurance policy that would protect the city from any <br />liability arising out of the project. <br /> D. Non-discrimination clauses <br />Minn. Stat. § 181.59. <br />Borom v. City of St. Paul, <br />289 Minn. 371, 184 N.W.2d <br />595 (1971). <br />All public contracts must contain a statement where the contractor <br />promises not to discriminate against prospective employees because of <br />race, creed, or color. <br /> E. Workers’ compensation <br />Minn. Stat. § 176.182. A city may not enter into a contract for any public works project until it <br />has received, from all contracting parties, proof of compliance with the <br />workers’ compensation insurance requirements. The contractor must show <br />they either are self-insured, carry workers’ compensation insurance for <br />their employees, or are exempt from having to provide such insurance. <br /> The city should maintain proof of the contractor’s compliance with the <br />workers’ compensation laws, but the city does not need to file or report <br />this information to any state agency. <br /> F. Income tax withholding <br />Minn. Stat. § 290.92. <br />Minn. Stat. § 270C.66. <br />Fact Sheet 13 Construction <br />Contracts with State or Local <br />Government Agencies, <br />Minnesota Department of <br />Revenue, December 2017. <br />Form IC-134. <br />Cities cannot make final payment to a contractor until the contractor has <br />shown proof of compliance with state income tax-withholding <br />requirements. The Department of Revenue requires all contractors and <br />subcontractors to file a Form IC-134 to show compliance with the <br />withholding requirements. Cities should obtain a copy of this document <br />from the contractor before making final payment on a contract.