Text Size:   A+ A- A   •   Text Only
Find     
Site Image
What is an Independent Contractor?

 
An independent contractor is a person or business entity which
  • is free from another’s right to direction and control;
  • is responsible to the customer only for the contracted result of the work, not the manner or method used to accomplish the work;
  • controls how the service is provided, who provides it, and the means of accomplishing it;
  • sets their own prices for goods, fees for service; 
  • terminates one contract while not terminating the business;
  • terminates one contract while not creating an unemployment situation;
  • has customers and prospective customers as a result of advertising and being known by the public as a going business;
  • provides goods and/or services to a public of their own choosing.
 
Here is a table comparing employee considerations with those of an independent contractor.
 

EMPLOYEE
INDEPENDENT CONTRACTOR
Directed and controlled by employer
Independent
Does tasks in the manner the employer requests
Does tasks in his or her own way
Does not have a financial investment in the work
Assumes the costs associated with doing the work
Employer provides tools, equipment, and skills training
Comes to the job with all necessary tools, equipment, and skills
The individual works under your business license
The individual obtains his or her own business license
Often receives benefits beyond payment for service (retirement and health plans)
Receives only payment for service
Receives a net check. Employer withholds income tax and FICA taxes.
Receives a gross amount check. Pays his or her own taxes.
Works at employer’s place of business
Works at his or her own office or home
Works the hours set by the employer
Sets his or her own hours
Works for one employer at a time
Provides services to multiple entities
Does not advertise
Has customers as a result of being known by the public as a business
Eligible for workers compensation benefits
Not covered by workers compensation
Has some rights prior to termination
No termination rights unless contracted
Covered by minimum wage and overtime rules
Paid as contracted no overtime
Protected by safety and anti-discrimination rules
No such protection
May join or form a union
No right to union representation
 
 
It is not possible to discuss all issues considered in all situations. If you need 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 law, please contact the Workers' Compensation Division and Bureau of Labor and Industries.
 
Return to Oregon Independent Contractors Home Page