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Employee or Independent Contractor?
This page and the links below will help you understand how to properly classify a worker.
 
An Overview
 
Independent contractors are common in many industries. Within the industries where they are common, there is a high likelihood that businesses may believe some of their workers are independent contractors when they are not. Also, employees who are performing services on a part-time, temporary, or probationary basis are sometimes thought to be independent contractors.
 
If you’re an employer and you treat someone as an employee or an independent contractor, the answer affects your bottom line. Generally, an employer will pay 30 to 40 percent of an employee's gross earnings toward taxes and entitlements such as Workers' Compensation, Social Security, Unemployment Insurance, and varied retirement and health plans. Some businesses seek to eliminate these obligations and taxes to reduce business expenses.
 
Unfortunately, it can become much more costly to the business owner when a government auditor converts workers from independent contractors to employee status.
 
The pages linked below will provide information about employees and independent contractors based upon Employment Department Law in Oregon. Workers are presumed to be employees unless they meet the exceptions in ORS 657.040 and ORS 670.600.
 
-Important information for workers
 
 What is an independent contractor?– a general discussion
 
Frequently Asked Questions – Common questions and answers
 
Considerations for specific industries– The independent contractor issue in various types of work
 
The costs of misclassifying an employee– What will it cost if I get it wrong?

 
It is not possible to present all issues to be considered in all situations. For more information than presented here, contact your  local tax auditor.
 
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 Laws, please contact the Workers' Compensation Division and Bureau of Labor and Industries.
 
Return to Oregon Independent Contractors Home Page