Oregon’s Independent Contractor Laws
A worker providing services for pay is generally considered
an employee by Oregon regulatory agencies - unless that worker meets the
requirements for an independent contractor.
Oregon Revised Statute (ORS) 670.600
(summarized below) defines the term “independent contractor” for the following state agencies:
• Department of Revenue
• Employment Department
• Construction Contractors Board
• Landscape Contractors Boards
A summary of the criteria used by each of these state agencies is available in chart form
Under this law, workers may be properly classified as independent contractors provided they
1. Are free from direction and control, beyond the right of the service recipient to specify the desired result, AND
2. Are licensed under ORS 671 or 701 (State Landscape Architect
Board or Landscape Contractors Board and State Board of Architect
Examiners or Construction Contractors Board) if licensure is required
for the service, AND
3. Are responsible for other licenses or certificates necessary to provide the service AND
4. Are customarily engaged in an “independently established business.”
To qualify under the law, an “independently established business” must meet 3 out of the following 5 criteria):
1. Maintain a business location that is:
a. Separate from the business or work location of the service recipient; or
b. that is in a portion of their own residence that is used primarily for business.
2. Bear the risk of loss, shown by factors such as:
a. Entering into fixed price contracts;
b. Being required to correct defective work;
c. Warranting the services provided; or
Negotiating indemnification agreements or purchasing liability
insurance, performance bonds, or errors and omissions insurance.
contracted services for two or more different persons within a 12-month
period, or routinely engage in business advertising, solicitation or
other marketing efforts reasonably calculated to obtain new contracts to
provide similar services.
4. Make a significant investment in the business through means such as:
a. Purchasing tools or equipment necessary to provide the services;
b. Paying for the premises or facilities where the services are provided; or
c. Paying for licenses, certificates or specialized training required to provide the services.
5. Have the authority to hire and fire other persons to provide assistance in performing the services.
1. A person who files tax returns with a Schedule F and also
performs agricultural services reportable on a Schedule C is not
required to meet the independently established business requirements
2. Establishing a business entity such as a corporation or
limited liability company, does not, by itself, establish that the
individual providing services will be considered an independent
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 meet all the criteria of that law to be considered an independent
For information about this topic under workers' compensation and Oregon labor laws, please contact the Workers' Compensation Division
and Bureau of Labor and Industries
These agencies, along with the IRS, use a different method for
determining whether a worker is subject to employment laws. A summary of
the tests used by BOLI and Workers’ Compensation can be found on this
Exception to Employment:
There are many exceptions to
what is considered “employment” in the law when it comes to
Unemployment Insurance. Details of these statutory exceptions can be
found in ORS 657.030, 657.040, and 657.043 through 094.
Please note that if you are unsure whether someone performing a service
is subject to employment law, contact us with your questions.
The above information is provided as a summary and teaching guide.
Nothing on this website is intended as legal advice. If you need legal
advice, please consult an attorney. We attempt to update the
information on this website as soon as practicable following changes or
developments in the laws and rules affecting Oregon employers, but we
make no warranties or representations, express or implied, about whether
the information provided is current. We urge you to check the
applicable statutes and administrative rules yourself and to consult
with legal counsel prior to taking action that may invoke employee
rights or employer responsibilities or omitting to act when required by
law to act.