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1.  Individuals who provide service for pay are employees unless they meet the definition of independent contractor set forth in Oregon Revised Statute 670.600.  The text of the law can be located at: ORS 670.600.
2.  Businesses do not withhold state or federal taxes from wages paid to independent contractors.  Independent contractors receive a Form 1099 at the end of the year and are solely responsible for reporting and paying taxes, including state and federal income taxes, self-employment taxes and, if applicable, transit taxes. 
3.  Independent contractors are not subject to wage and hour laws, such as those governing minimum wage, overtime pay, and rest periods.  However, any persons employed by an independent contractor are subject to such laws.
4.  Independent contractors are not covered by workers’ compensation insurance.   They are not entitled to receive benefits in the event of an on-the-job injury.
5.  Wages earned as an independent contractor cannot be used to qualify an independent contractor to receive unemployment insurance benefits during a period of unemployment.  
6.  Independent contractors are generally not eligible for other employment benefits, such as health insurance and pension plans.
If you have any questions about whether or not you are properly classified as an employee or independent contractor, contact the Employment Department Tax Section or the Oregon Department of Revenue.
The 2005 legislature modified the Independent Contractor statutes. The new statutes took effect January 1, 2006.
This page reflects the position of the Employment Department.
If you have any questions about whether you are properly classified as an employee or independent contractor, contact
  • Employment Department Tax Section (503-947-1488) or,
  • contact your local tax auditor
ORS 670.600 applies only to the Oregon Department of Revenue, Employment Department, Construction Contractors Board, and Landscape Contractors Board. These agencies require that the person performing the work must meet all the criteria of that law.
For information about workers' compensation and Oregon labor law, please contact the Workers' Compensation Division and Bureau of Labor and Industries.
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