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All Contractors: Help Staying Legal
Independent Contractor Law
Oregon law requires all licensed contractors to qualify as independent contractors in order to be licensed with the CCB. An independent contractor is an individual (sole proprietor) or an entity (corporation, partnership, LLC, LLP, LP, trust, joint venture) that demonstrates it is in business for itself and is not an employee. This means the individual or entity is free from direction or control over the means and manner of providing service and has the right to determine how the work will be done to deliver satisfactory results. (In contrast, an employee works under the direction and control of a supervisor or owner, often for an hourly wage.)
An independent contractor qualifies as an independently established business by meeting at least three of the following five criteria:
1. The business must maintain a physical location different from the client jobsites.
2. The business must bear the risk of loss.
3. The business contracts with two or more clients.
4. The business has the authority to hire others.
5. The business has a significant investment in its operations.
Class of Independent Contractors - Non-exempt and Exempt
There are two classes of independent contractors- Non-exempt and Exempt.
Non-exempt means that the entity has employees or is allowed to have employees. The business must carry workers' compensation insurance at all times.
Exempt means that business will not have employees and does not need workers' compensation coverage. The business could perform work by itself, work with workers leased from an worker leasing agency, or subcontract to other independent contractors that are licensed businesses.
Making the determination whether to classify a person as an employee or an independent contractor may be confusing. But misclassification can be costly. For example, Oregon law requires a business that misclassifies its workers as independent contractors to pay taxes, penalties and interest on what the law considers wages and not contract payments.
Workers' Compensation
Every business that employs one or more workers must provide workers' compensation insurance coverage.*
Workers' compensation insurance protects employees if they are accidentally injured on the job and protects employers from lawsuits resulting from injuries on the job. Workers' compensation insurance is "no-fault" insurance that covers an employee's medical costs and loss of wage expenses for on-the-job injuries and diseases. Workers' compensation insurance also provides death benefits to dependents if an employee dies as a result of an occupational injury or disease.
For more information, contact Oregon's Workers' Compensation Division (WCD) at www.cbs.state.or.us//wcd/.
For information on leased workers Click Here

*Beginning July 1, 2010, all contractors with a commercial endorsement will be required to carry workers' compensation insurance.
Notification Requirements for Court Judgements
Contractors are required to send to the Construction Contractors Board (CCB) a copy of a final judgment that is issued in a court action or confirms an arbitration award arising from breach of contract or from negligent or improper work relating to the construction of a residential structure.
This must be delivered to the CCB within 45 days from the date the final judgment is recorded.
A contractor is not required to send a copy of the final judgment if the contractor has paid the judgment and any other amount payable under the judgment within 30 days from the date in which the judgment was recorded, or the contractor is appealing the judgment and has filed any undertaking for the appeal process.
Reporting Court Judgments Form 109
Contractors must send the complete the above form and provide a copy of the final judgment to:
     Construction Contractors Board
     Attention:  Licensing
     PO Box 14140
     Salem OR 97132
CCB will be providing the ability to report Court Judgments online through a contractor's CCB "My License" account.
CCB may sanction contractors for failing to comply with the law as required.