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Employee or Independent Contractor
Sorting out the confusion: What you need to know about worker classification!
Oregon's Independent Contractor Laws
 
A worker providing services for pay will generally be considered an employee - unless that worker also meets the criteria established for an independent contractor. 
 
Oregon Revised Statutes (ORS) 670.600 provides a standardized definition of independent contractor for the following four agencies:
 
Department of Revenue,
Employment Department,
Construction Contractors Board, and
Landscape Contractors Board
 
To be considered an independent contractor under ORS 670.600 (summarized below) a worker must be:
 
Free from direction and control, AND
Customarily engaged in an “independently established business,” AND
Licensed under ORS 671 or 701 (State Board of Architect Examiners, Landscape Architect Board, Landscape Contractors Board or Construction Contractors Board) if licensure is required for the service, AND
Responsible for any other licenses or certificates necessary to provide the service.
 
The Bureau of Labor and Industries and the Workers’ Compensation Division use other, specific legal tests to determine proper classification.  Visit the ICN website for more on each of these.
 
More information is available at: www.OregonIndependentContractors.com

A classification determination must conform with specific legal criteria
However, the comparison chart below highlights some common differences between an employee and an independent contractor.

EMPLOYEE
        INDEPENDENT                CONTRACTOR        
Means and manner of work are controlled by employer
Free from direction and control
Does tasks the employer's way
Does tasks in own way
Trained by employer to perform job
Has necessary skills and training to
complete job
Works under the employer's assumed
business name
Has an assumed business name
Works at employer's business location
Has a business location
Works for one employer, may serve that
employer's customers
Performs services for multiple customers
Works hours set by employer
Sets own hours
Accepts wage, salary, or commission
determined by the employer
Determines own price for contracted
services
May be covered by minimum wage, overtime, safety, unemployment, and workers' compensation
Not eligible for employee benefits
Not directly affected by employer's profit or loss
Directly affected by business profit or loss
Employer provides and controls equipment and tools
Owns equipment and tools used to complete job
Employer purchases materials and supplies
Purchases materials and supplies needed to do job
Employer liable for employee errors and/or accidents
Personally liable for errors and/or accidents
Does not file self-employment taxes;
receives a Form W-2 from employer
Files self-employment taxes; receives a Form 1099-MISC
Is hired and/or fired by employer
Has right to hire and fire workers
May quit working for an employer at any time
Must legally complete each contract
 

Worker Misclassification: What's at stake?
Misclassifying a worker can be costly to an employer. Depending on the situation, Oregon law allows, and often requires, state agencies to impose back taxes, penalties, and interest on employers that are misclassifying their workers.
 
Misclassified employees run the risk of losing out on lawful benefits and protections like unemployment insurance, income tax withholding, workers’ compensation coverage for on-the-job injuries, minimum wage and overtime protections, as well as other workplace protections under civil rights and wage and hour law. Misclassified employees will almost certainly forfeit benefits offered to properly classified employees such as sick leave, vacation pay and retirement benefits.

Where do I go from here?
Oregon’s enforcement agencies want to help you make the right decision.  The ICN website has information about all of the legal tests to consider, as well as how to file a complaint on suspected unlawful activity.
 
Still not sure?  Consider contacting our sponsor agencies directly:
 
Oregon Employment Department
taxinfo@emp.state.or.us
503-947-1520
Oregon Department of Revenue
ic.info.dor@state.or.us
503-378-4988
800-356-4222
Workers' Compensation Division,
Department of Consumer &
Business Services
wcd.employerinfo@state.or.us
503-947-7815 
In Oregon 888-877-5670
Oregon Bureau of Labor and Industries
BOLI.MAIL@state.or.us
971-673-0761
Construction Contractors Board
ccb.info@state.or.us
503-378-4621
Landscape Contractors Board
lcb.info@state.or.us           
503-378-5909
Internal Revenue Service
www.irs.gov
800-829-1040
 
TTY users, dial 711 to be connected to the Oregon Relay TTY System, which can then connect you to whichever agency you wish to contact.