State of Oregon: Independent Contractors - Considerations for Specific Industries

Industry Specific Help for Worker Classification

Please note: all classification determinations must conform with specific legal criteria and will need to address:
• whether the worker is free from direction and control, and
• whether the worker has an independently established business.

With that in mind, we have compiled a list of several industry specific considerations (below) which may help to highlight the differences between an employee and an independent contractor.

Of course, it is not possible to address every business situation. For more information on whether considerations specific to your business might impact a classification determination, feel free to contact us.

Industry Specific Considerations:

Adult foster care

Adult foster care homes offer personal and health care services to individuals in a private residence – typically that of the care home’s owner. People often choose adult foster care because it is more affordable than other care facilities and care is provided in such a homelike setting. Care and supervision are provided to maintain a safe and secure setting and may be available around the clock. Owners or operators of adult foster care homes often require additional staff to assist with these duties. This type of care tends to blur the traditional lines between the home and the workplace, casual and formal employment and sometimes even the line between family member and employee. Individuals who provide such services are also incorrectly treated as independent contractors.

It is important to remember that for someone to be an independent contractor, they must meet the criteria of ORS 670.600 including
   (1) that they be free from the right of another to control how services are performed and,
   (2) that the worker operates an independently established business.

Where the criteria for an independent contractor are not met, a caregiver will still be considered an employee, regardless of the intentions of the parties involved.

Characteristics of an Independent Contractor
1.    Caregiver asserts he or she is self-employed and generally serves more than one client
2.    Caregiver provides his or her own transportation between clients
3.    Caregiver maintains his or her own liability insurance and business licenses
4.    Caregiver requires no training or supervision
5.    Caregiver arranges his or her own fees and availability directly with the client
6.    Caregiver is free to accept or decline a client

Characteristics of an Employee
1.    Caregiver operates under the business name of another or in direct hire situations, without a business name
2.    Caregiver is subject to workplace policies and supervision
3.    Caregiver performs services on an ongoing basis
4.    Caregiver is not free to decline work
5.    Expenses (gas & maintenance) for transportation between worksites are the responsibility of another

NOTE: Workers' compensation law allows an exemption for an employee performing adult foster care duties of assistance to the residents of an adult foster home licensed for five or fewer adults where room, board, and 24-hour care is provided.

Agricultural employment

Agricultural employers often hire agricultural laborers by way of farm labor contractors (FLC) and/or agricultural associations.

To be considered an independent contractor, a FLC must meet the specific legal requirements set out by state regulatory agencies. Additional licensure and reporting requirements apply to Oregon FLCs (contact the Bureau of Labor and Industries’ Farm Forest Labor Unit for details).

Licensure alone, however, does not mean a FLC is an independent contractor. Under the federal Migrant and Seasonal Agricultural Worker Protection Act (MSPA), if the FLC is an employee of the person utilizing his or her services, then the workers in his or her crew will also be employees of that person. The US Department of Labor maintains a fact sheet online as well as a page on MSPA with further details.

Finally, agricultural employers should note that hiring agricultural laborers by way of a FLC does not preclude the possibility of responsibility for those agricultural laborers as a joint employer.

Characteristics of an Independent Contractor
1.    FLC asserts he or she is self-employed and generally maintains his or her own client list or customer base
2.    FLC hires agricultural laborers and pays them directly
3.    FLC maintains his or her own liability insurance and business licenses
4.    FLC may perform services the alleged employer is not qualified or able to supply
5.    Agricultural employer is interested only in the outcome of the work, not in the details of how the work is done by FLC and FLC’s employees
6.    Necessary tools and equipment (including mechanized equipment) are furnished by FLC
7.    FLC requires no training or supervision
8.    FLC has some voice in determining the hours of performing the work
9.    Work is not performed on a continuous basis, but rather on a job to job basis
10. Pay is generally by the job and is negotiated with the FLC
11. FLC invoices the agricultural employer for work performed
12. FLC is not reimbursed by the alleged employer for expenses
13. Payment from the agricultural employer is made to the company or DBA of the FLC

Characteristics of an Employee
1.    Worker is not free from the right of the agricultural employer to direct and control how services are provided
2.    Worker has no DBA, does not own his or her own company, has no client base, and/or has no business cards or independent advertising
3.    Worker performs services on an ongoing basis for the agricultural employer
4.    Worker's services are directly integrated in the primary service supplied by the employer
5.    Agricultural employer supervises the worker in the details of the projects or assignments
6.    Agricultural employer provides the facilities, tools, equipment, and/or supplies for the work
7.    Agricultural employer provides office space and clerical help to the worker at no cost
8.    Worker requires training and/or supervision
9.    Worker does not determine the hours or the details of the work
10. Worker is subject to routine quality control checks
11. Worker is required to furnish regular reports to the agricultural employer
12. Worker has no right to engage assistants to help him or her perform the contract services, or if the worker hires assistants, the agricultural employer pays their wages
13. Pay rate is unilaterally set by the alleged employer
14. Pay is by hourly wage, piece rate or salary, rather than by the job
15. Agricultural employer reimburses the worker for expenses associated with the job
16. Worker is covered by all or part of the agricultural employer's benefits plan and liability insurance

Auto repair/detailing

Auto mechanics and detail workers often use their own tools and equipment, have specialized licenses and are sometimes treated as independent contractors by the businesses within which they work.

It is not unusual for these workers to be paid a fixed flat or “book” rate for services performed and some may even be charged rent for their work space and / or consumables. As with all other workers, however, they too must meet all the legal requirements set out by state regulatory agencies to be considered independent contractors (and not merely employees). Where auto repair/detailing workers are not free from direction and control in the operation of an independently established business of their own, they will not meet the definition of an independent contractor.

Characteristics of an Independent Contractor
1.    Worker asserts he or she is self-employed and generally maintains his or her own client list or customer base and advertising
2.    Worker is free to choose which customers to serve, e.g., worker is free to pursue additional clients and may refuse to take referrals from the business within which he or she provides services
3.    Worker is free to hire additional laborers and pays them directly
4.    Worker maintains his or her own liability insurance and business licenses
5.    Worker pays a flat rate for business space
6.    Business is interested only in the outcome of the work, not in the details of how the work is done by the worker or the worker’s employees
7.    Worker may perform services which the larger business is not qualified or able to supply
8.    Work may not be performed for the business on a continuous basis, but rather on a job to job or referral basis
9.    Necessary tools equipment and supplies are furnished by the worker
10. Worker requires no training or supervision
11. Worker determines the hours of work and schedules when work will be performed
12. Pay is generally by the job and is negotiated with the worker
13. Worker invoices the business for work performed
14. Payments from the business or clients are made to the company or DBA of the worker

Characteristics of an Employee
1.    Worker is not free from the right of the business where he or she is located to direct and control how services are provided
2.    Worker has no DBA, does not own his or her own company, has no client base, and/or has no business cards or independent advertising
3.    Worker does not determine the hours or the details of the work
4.    Worker does not provide the facilities, tools, equipment, and/or supplies for the work; Worker receives reimbursement for expenses associated with the job
5.    Worker has no right to engage assistants to help him or her perform services, or if the worker hires assistants, the business where he or she is located pays their wages
6.    Worker does not choose which clients he or she will engage
7.    Worker performs services on an ongoing basis for the business where he or she is located
8.    Worker's services are directly integrated in the primary service supplied by the employer
9.    Worker may require training and/or supervision; Worker is subject to routine quality control checks
10. Pay may be by hourly wage, piece rate or salary, rather than by the job
11. Pay rate is unilaterally set by the business; worker does not set client’s price for services performed
12. Worker is covered by all or part of the benefits plan and liability insurance of the business where he or she is located

Barber/beauty/nail salons

Salon workers often use their own tools and equipment, have specialized licenses and are sometimes treated as independent contractors by the businesses within which they work.

It is not unusual for these workers to rent space (a chair) at a shop or salon and many have arrangements regarding the (exclusive) use / promotion of various cosmetic products.

As with all other workers, salon workers must meet all the legal requirements set out by state regulatory agencies to be considered independent contractors (and not merely employees). Where they are not free from direction and control in the operation of an independently established business of their own, they will not meet the definition of an independent contractor.

Characteristics of an Independent Contractor
1.    Worker asserts he or she is self-employed and generally maintains his or her own client list and advertising apart from the business within which services are provided
2.    Worker is free to hire assistants and pay them directly
3.    Worker is free to choose which customers to serve and when, e.g., worker is free to pursue additional clients and may refuse to take referrals from the business within which he or she provides services
4.    Worker sets his or her own hours and schedule
5.    Worker maintains his or her own liability insurance and/or business licenses
6.    Worker pays a flat rate for business space
7.    Business does not assert the right to control how the worker performs service to clients
8.    Necessary tools equipment and supplies are furnished by the worker (apart from fixtures like chairs, basins, etc.); business does not require the use of certain products
9.    Worker requires no training or supervision
10. Worker sets the price for services performed
11. Worker may invoice the business for work performed
12. Payments from the business or clients are made to the company or DBA of the worker

Characteristics of an Employee
1.    Worker has no DBA, does not own his or her own company, has no client base, and/or has no business cards or independent advertising
2.    Worker performs services on an ongoing basis for the business where he or she is located
3.    Worker's services are directly integrated in the primary service supplied by the employer
4.    Worker is not free from the right of the business where he or she is located to direct and control how services are provided
5.    Worker does not choose which clients he or she will engage
6.    Worker does not determine the hours or the details of the work
7.    Worker does not provide the facilities, tools, equipment, and/or supplies for the work;
8.    Worker may require training and/or supervision; worker is subject to routine quality control checks
9.    Worker has no right to engage assistants to help him or her perform services, or if the worker hires assistants, the business where he or she is located pays their wages
10. Pay rate is unilaterally set by the business; worker does not set client’s price for services performed
11. Pay may be by hourly wage, piece rate or salary, rather than by the job
12. Worker receives reimbursement for expenses associated with the job
13. Worker is covered by all or part of the benefits plan and liability insurance of the business where he or she is located

Computer programmers/software designers

The misclassification of contract workers (“freelance workers”) and temporary workers in the technology sector has resulted in extensive litigation and some very expensive settlements.

As with all other workers, computer programmers/software designers must meet all the legal requirements set out by state regulatory agencies to be considered independent contractors (and not merely employees). Where they are not free from direction and control in the operation of an independently established business of their own, they will not meet the definition of an independent contractor.

Characteristics of an Independent Contractor
1.    Worker asserts he or she is self-employed and generally maintains his or her own client list and advertising
2.    Worker is free to choose which customers to serve and when; worker is free to pursue additional clients
3.    Worker is free to hire assistants and pay them directly
4.    Worker sets his or her own hours and schedule
5.    Worker often performs a service the alleged employer is not qualified or able to supply
6.    Work is performed on a job by job basis
7.    Business does not assert the right to control how the worker performs service
8.    Worker is highly skilled/requires no training or supervision
9.    Necessary tools equipment and supplies are furnished by the worker
10. Worker sets the price for services performed
11. Worker invoices the business for work performed
12. Payments from the business are made to the company or DBA of the worker
13. Worker is not reimbursed by the alleged employer for expenses
14. Worker is not covered by the alleged employer's benefit plan Worker maintains his or her own liability insurance and/or business licenses

Characteristics of an Employee
1.    Worker has no DBA, does not own his or her own company, has no client base, and/or has no business cards or independent advertising
2.    Worker performs services on an ongoing basis for the business where he or she is located
3.    Worker's services are often directly integrated in the primary service supplied by the employer
4.    Worker is not free from the right of the business where he or she is located to direct and control how services are provided
5.    Worker does not choose which clients he or she will engage on behalf of business
6.    Worker does not determine the hours or the details of the work assigned
7.    Worker does not provide the facilities, tools, equipment, and/or supplies for the work; Worker may require training and/or supervision; worker is subject to routine quality control checks
8.    Worker has no right to engage assistants to help him or her perform services, or if the worker hires assistants, the business where he or she is located pays their wages
9.    Pay rate is unilaterally set by the business
10. Pay may be by hourly wage, piece rate or salary, rather than by the job
11. Worker receives reimbursement for expenses associated with the job
12. Worker is covered by all or part of the benefits plan and liability insurance of the business where he or she is located

Consultants

Ordinarily, consultants are engaged for work of a temporary and specialized nature. Businesses may seek out consultants to provide services and expertise which are not available in house or which fall outside their primary business.

Consultants are often considered independent contractors, however, the mere designation of a worker as a “consultant” does not, on its own, confer the status of an independent contractor.

As with all other workers, consultants must meet all the legal requirements set out by state regulatory agencies to be considered independent contractors (as opposed to employees). Where consultants are not free from direction and control in the operation of an independently established business of their own, they will not meet the definition of an independent contractor.

Characteristics of an Independent Contractor
1.    Consultant asserts he or she is self-employed and generally maintains his or her own client list or customer base
2.    Consultant has the right to hire assistants and to pay them out of his or her own pocket
3.    Consultant maintains his or her own errors and omissions liability insurance
4.    Consultant is often hired locally where the alleged employer performs the overall project
5.    Alleged employer is interested only in the outcome of the work, not in the details of how the work is done
6.    Consultant performs a service the alleged employer is not qualified or able to supply
7.    Work is not performed on a continuous basis, but rather on a job to job basis
8.    Work is generally performed at contractor's office/home (or the alleged employer’s project site)
9.    Necessary tools and equipment are furnished by consultant
10. Supplies/materials are furnished by consultant without reimbursement from alleged employer
11. Consultant is highly skilled/requires no training or supervision
12. Consultant has some voice in determining the hours of performing the work
13. Consultant is generally not required by the alleged employer to submit performance, cost, or progress reports other than invoices or perhaps work or progress reports verified and signed by the alleged employer's clients
14. Pay is generally by the job and is negotiated with the consultant
15. Consultant invoices the alleged employer for work performed
16. Payment is made to the company or DBA of the consultant
17. Consultant is not reimbursed by the alleged employer for expenses
18. Consultant is not covered by the alleged employer's benefit plan

Characteristics of an Employee
1.    Worker considers himself or herself to be an employee
2.    Worker has no DBA, does not own his or her own company, has no client base, and/or has no business cards or independent advertising
3.    Worker performs services on an ongoing basis for the alleged employer
4.    Worker's services are directly integrated in the primary service supplied by the employer
5.    Alleged employer supervises the worker in the details of the projects or assignments
6.    Worker does not determine the hours or the details of how the work is performed
7.    Alleged employer provides the facilities, tools, equipment, and/or supplies for the work
8.    Alleged employer provides office space and clerical help to the worker at no cost
9.    Worker may require training and/or periodic supervision
10. Worker is subject to routine quality control checks
11. Worker is required to furnish regular reports to the alleged employer
12. Worker has no right to engage assistants to help him or her perform the contract services, or if the worker hires assistants, the alleged employer pays their wages
13. Pay is by hourly wage or salary, rather than by the job
14. Pay rate is unilaterally set by the alleged employer
15. Alleged employer reimburses the worker for expenses associated with the job
16. Worker is covered by all or part of the alleged employer's benefits plan and liability insurance

[1] Considerations adapted from a list developed by Texas Workforce Commission (http://www.twc.state.tx.us/news/efte/appx_a_consultants_comparison.html).

Cottage industries (making and selling homemade products)

Individuals who build, assemble products at home and or sell home-made products are often considered independent contractors. When they produce products for other businesses, they are often compensated on a piece rate basis. In any case, each worker providing such services must meet the requirements of ORS 670.600 – principally that he or she be (1) free from direction and control and (2) that he or she provide services by way of an independently established business in order to be considered an independent contractor.

Characteristics of an Independent Contractor
1.    Individual is free from direction and control over all aspects of his or her own business.
2.    Individual has his or her own customer base and/or produces goods for more than one business
3.    Individual has the right to hire assistants and to pay them out of his or her own pocket
4.    Individual purchases his or her own materials and supplies to perform the work
5.    Individual uses his or her own equipment and tools
6.    Individual determines when services will be performed
7.    Individual is not a part or component of anyone else's business

Characteristics of an Employee
1.    A part or component of someone else's business
2.    Individual produces goods for a single client – essentially an off-site manufacturing employee
3.    Individual is not free to control the manufacturing process or materials to be used
4.    Individual cannot control materials costs by choosing which supplier to use
5.    Individual cannot hire additional labor without client approval
6.    Individual performs services on an ongoing basis for the alleged employer
7.    Individual does not determine the hours or the details of how the work is performed
8.    Client may provide the tools, equipment, and/or supplies for the work
9.    Client may require training and/or periodic supervision
10. Individual may be subject to routine quality control checks
11. Pay rate is unilaterally set by the client business

Gig Employment

People who perform services that interact with a virtual platform (also known as Gig Employment) may work from their home or a vehicle. Many Gig Employers use a business model that asserts that individuals contracting to provide services are independent contractors. The determination as to whether service providers are employees or independent contractors still turns on whether they meet the requirements of ORS 670.600 - principally that they are (1) free from direction and control over the manner and means AND (2) that they are providing services by way of an independently established business. You cannot contractually "waive" your right to be an employee or opt to be an independent contractor.

Characteristics of an Independent Contractor

1. Service Provider sets his or her own schedule and determines where services are performed

2. Service Provider supplies the necessary tools of the trade such as tools, vehicles, phone, gas, advertising and internet/phone service

3. Service Provider is free to set the terms of sale or make adjustments to contracts for services or sales

4. Service Provider is not subject to quality control checks or reviews

5. Service Provider markets and/or contracts to provide services for multiple businesses

6. Service Provider services are not a fixed part of another's business; contracts are for delimited deliverables or time-spans and are not automatically renewed

7. Service Provider negotiates the terms of his or her compensation. Provider has the right to discount or waive fees (example - buy one get one)

Characteristics of an Employee

1. Service Provider works when and where the employer directs

2. Service Provider must manage customer interactions according to employer's policy/direction and is subject to quality control checks (example - dictates route or gives instructions on how to provide the service)

3. Service Provider does not incur the cost of all the necessary tools; employer supplies communication connections, leads/customers and/or platform providing work assignments

4. Service Provider follows employer-prescribed directives on price and terms of sales to customers

5. Service Provider performs services for platform customer as a fixed part of that employer's business model

6. Service Provider is paid according to the employer's compensation plan

7. Service Provider is not allowed to solicit further business from the customer but must refer them back to the platform for future business

In-home caregivers

In-home caregiving can often blur the traditional lines between the home and the workplace, casual and formal employment and sometimes even the line between family member and employee. Individuals who provide in-home care are also treated as independent contractors, in some cases, to avoid the additional burden of employment tax reporting on the aged or infirm.

It is important to remember that for someone to be an independent contractor, they must meet the criteria of ORS 670.600 including (1) that they be free from the right of another to control how services are performed and, (2) that the worker operates an independently established business.

Where the criteria for an independent contractor are not met, an in-home caregiver will still be considered an employee, regardless of the intentions of the parties involved.

Note: Current wage and hour law exempts domestic service employees who provide companionship services in a family home from minimum wage and overtime requirements. Employers should note that the criteria for this exemption was narrowed significantly by federal rule changes in 2015. Contact the US Department of Labor at 503-326-3057 for more information. Worker's compensation law also provides an exemption for individuals employed in domestic service in or about the private home who are under private contract between the homeowner or agent of the homeowner, and the individual performing the work.

Characteristics of an Independent Contractor
1.    Caregiver asserts he or she is self-employed and generally serves more than one client
2.    Caregiver provides owns his or her own transportation between clients
3.    Caregiver maintains his or her own liability insurance and business licenses
4.    Caregiver requires no training or supervision
5.    Caregiver arranges his or her own fees and availability directly with the client
6.    Caregiver is free to accept or decline a client
7.    If required, caregiver provides services under their own license or certificate

Characteristics of an Employee
1.    Caregiver operates under the business name or license/certificate of another or in direct hire situations, without a business name
2.    Caregiver is subject to workplace policies and supervision
3.    Caregiver performs services on an ongoing basis
4.    Caregiver is not free to decline work
5.    Expenses (gas & maintenance) for transportation between worksites are the responsibility of another

Insurance (people performing insurance-related services)

Although they are often referred to as “independent insurance agents” individuals who provide insurance-related services must still meet each of the legal requirements of ORS 670.600 to be considered an independent contractor.

Critical to the determination is that the individual in question remain free from direction and control over both the means and the manner by which services are provided. While some brokers may be able to provide their clients with products from a number of different insurers, many insurance workers are contractually obligated to only offer one provider’s products. Where an insurance worker is not free to set prices or vary his or her product line or negotiate the basis for his or her compensation from the insurer, there is a significant chance that he or she will not be found free from direction and control.

Internet-based service

With the advent of the internet, individuals who provide internet-based services may work on a computer from almost anywhere, providing any number of services for businesses or clients around the globe. Whether these individuals are independent contractors, however, will depend entirely on whether in the performance of these services they meet the requirements of ORS 670.600 - principally that they are (1) free from direction and control and (2) that they are providing services by way of an independently established business, as that term is defined in statute.

Long-haul truck drivers

Long-haul truckers who own or have a leasehold interest in equipment and furnish, maintain, and operate the equipment are often considered independent contractors by the trucking industry. Under ORS 670.600, it is important to remember that the driver must remain free from direction and control and operate an independently established business.

Note: State agencies provide a number of exemptions or partial exemptions to covered long-haul truck drivers. Please visit each agency’s website for specific information.

Characteristics of an Independent Contractor
1.    Driver asserts he or she is self-employed and may register his or her own business name
2.    Driver remains free to accept loads from multiple shippers or clients
3.    Driver usually owns the necessary equipment to do the work
4.    Driver may hire other operators or drivers as he or she deems necessary
5.    Driver maintains his or her own liability insurance and business licenses
6.    Driver requires no training or supervision
7.    Driver determines which hours / days he or she will perform work
8.    Driver is responsible for expenses (gas & maintenance)
9.    Driver bids / invoices each job individually
10. Driver issues his or her own bill of lading
11. Driver is free to accept or decline a run
12. Driver operates under their own ODOT authority

Characteristics of an Employee
1.    Driver performs services under the business name of another
2.    Driver performs services on an ongoing basis and may be restricted to one carrier by contract
3.    Driver is subject to workplace policies of another
4.    Driver is not free to decline a particular job
5.    Driver does not provide his or her own rig
6.    Expenses (gas & maintenance for machinery; insurance and licensure) are the responsibility of another
7.    Driver does not control the price of the run for the client.
8.    Driver does not bid, invoice or issue his or her own bill of lading.
9.    Driver operates under someone else’s ODOT authority

Machine operators (Excavator Operator, Crane Operators and other equipment operators)

Individuals operating machinery must meet the requirements of the law to be considered independent contractors, even if they have specialized licenses or credentials/certificates.

Note: Depending on the type of work performed, independent contractors who operate machines will almost always need to be licensed by the Construction Contractors Board or the Landscape Contractors Board.

Characteristics of an Independent Contractor
1.    Operator asserts he or she is self-employed and generally operates under his or her own business name
2.    Operator usually owns the necessary equipment to do the work.
3.    Operator may hire operators or drivers as he or she deems necessary
4.    Operator maintains his or her own liability insurance and business licenses
5.    Operator requires no training or supervision
6.    Operator determines which hours / days he or she will perform work
7.    Operator is responsible for expenses (gas & maintenance)
8.    Operator bids / invoices each job individually
9.    Operator is free to accept or decline a contract
10. Operator is not required or expected to operate under the policies and procedures of the business for which he or she is working

Characteristics of an Employee
1.    Operator performs services under the business name of another
2.    Operator performs services on an ongoing basis, usually working on an hourly basis
3.    Operator is subject to workplace policies of another
4.    Operator is not free to decline a particular job
5.    Expenses (gas & maintenance for machinery; insurance and licensure) are the responsibility of another
6.    Operator does not control the price of the job for the client.

Maintenance/janitorial/custodial

The distinction between an employee and an independent contractor is often obscured in the context of building maintenance and janitorial/custodial settings. Workers are sometimes assigned the contract for specific floors or buildings. Workers are also invited at times to purchase a franchise interest in a particular company. While there are often various types of agreements entered into, the governing criteria as to the workers’ classification as either employee or independent contractor remains the requirements of ORS 670.600.

Characteristics of an Independent Contractor
1.    Maintenance / Janitorial Contractor may advertise for customers using his or her own name or business name
2.    Maintenance / Janitorial Contractor makes independent decisions about which contracts he or she will take on
3.    Maintenance / Janitorial Contractor sets / negotiates prices for services performed for customers
4.    Maintenance / Janitorial Contractor stands to receive the benefit of goodwill and to make a profit by the performance of services
5.    Maintenance / Janitorial Contractor determines work hours
6.    Maintenance / Janitorial Contractor warrants work; has own liability insurance
7.    Maintenance / Janitorial Contractor is free to hire and fire other workers at his or her own expense
8.    Maintenance / Janitorial Contractor determines which suppliers to use and may negotiate prices for cleaning supplies
9.    Maintenance / Janitorial Contractor may have a significant investment in the business through which services are performed in the form of a premises, floor buffers, steamers, rug cleaning machines, vehicles, etc.

Characteristics of an Employee
1.    Maintenance / Janitorial Employee works within the business of another; does not advertise for customers using his or her own name or business name
2.    Maintenance / Janitorial Employee does not determine work hours
3.    Maintenance / Janitorial Employee will not make independent decisions about who will be served and when
4.    Maintenance / Janitorial Employee will use the employer’s cleaning supplies and expendables
5.    Maintenance / Janitorial Employee may perform services on an hourly basis
6.    Maintenance / Janitorial Employee does not control supply contracts or pricing for customers (building owners / managers)
7.    Maintenance / Janitorial Employee work insured by the employing business
8.    Maintenance / Janitorial Employee is not invested in the employing business

Mortgage loan originators

Owing primarily to the level of oversight required by government regulation, mortgage loan originators (also called loan officers, mortgage originators, mortgage sales people, etc.) consistently fail to meet the requirements of ORS 670.600, principally the requirement that they be free from direction and control.

The Division of Finance and Corporate Securities (under Oregon’s Department of Consumer and Business Services) tightly regulates the activities of mortgage loan originators through their employers, the mortgage brokers and mortgage bankers. A mortgage loan originator may apply for a license, but an active license is not issued unless he or she is first hired by a mortgage broker. The mortgage broker is required to notify DFCS within 30 days of hiring a new mortgage loan originator. Business locations must be licensed (from DFCS) to the broker, not the mortgage loan originator. No business names may be used that are not registered with DFCS to the broker. A mortgage loan originator may not be employed by more than one mortgage broker at a time.

In addition, ORS Chapter 86A lists a number of conditions under which the Director of DCBS may deny, suspend, condition, or revoke the license of a mortgage banker or mortgage broker. Among them, the director may find that a mortgage banker or mortgage broker:
•    Has failed to supervise diligently and control the mortgage-related activities of a mortgage loan originator employed by the licensee.
•    Has knowingly misrepresented to the director the training of, examination of or continuing education time earned by a mortgage loan originator employed by the licensee.
•    Has willfully or repeatedly employed persons as mortgage loan originators who do not meet the training, education or continuing education requirements for mortgage loan originators.
•    Has failed to notify the director of the termination of a mortgage loan originator for failure to comply with state or federal laws, regulations or rules.
(These violations are part of a larger listing of possible violations; for a complete listing, see Chapter 86A)

ORS Chapter 86A not only gives mortgage bankers or mortgage brokers the right to direct and control the activities of mortgage loan originators but requires it as a condition of the mortgage banker or mortgage broker's right to continue doing business in Oregon.

A number of administrative hearings decisions have affirmed Oregon Employment Department's determinations along these lines, and an Oregon Court of Appeals decision (Northstar Mortgage, LLC et al. v. Employment Department (A12561O) 1/25/06), also affirmed (without opinion) a determination that loan originators were employees.

Pharmacists

Pharmacies often treat relief pharmacists as independent contractors. This is an area in which the actual reality of the relationship needs to be carefully compared with the requirements for an independent contractor at ORS 670.600, particularly the requirement that the individual operate an independently established business.

Characteristics of an Independent Contractor
1.    Pharmacist may advertise for customers using his or her own name or business name
2.    Pharmacist may determine work hours
3.    Pharmacist may make independent decisions about who will be served and when
4.    Pharmacist may determine which wholesalers to use and negotiate prices with suppliers
5.    Pharmacist sets prices for services performed
6.    Pharmacist stands to receive the benefit of goodwill and to make a profit by the performance of services
7.    Pharmacist warrants work; has own liability insurance
8.    Pharmacist is free to hire and fire other workers at own expense
9.    Pharmacist may have a significant investment in the business through which services are performed
10. Pharmacist is not required to follow the policies or procedures of the business to which they are providing services

Characteristics of an Employee
1.    Pharmacist works within the business of another; does not advertise for customers using his or her own name or business name
2.    Pharmacist does not determine work hours
3.    Pharmacist will not make independent decisions about who will be served and when
4.    Pharmacist will not determine which wholesalers to use and negotiate prices with suppliers
5.    Pharmacist may perform services on an hourly basis
6.    Pharmacist does not control supply contracts or pricing for customers
7.    Pharmacist’s work may be insured by the employing business
8.    Pharmacist is not invested in the employing business
9.    Pharmacist is required to wear specific attire (uniform)
10. Pharmacist is required or expected to follow the policies and procedures of the business for which they are working

Sales

People who perform sales work often work on a commission or fee basis rather than on an hourly basis and some work away from the office or a sales floor altogether as outside sales workers. None of these factors necessarily means that a sales worker is an independent contractor.   A sales worker must meet the requirements of ORS 670.600 – principally that they are (1) free from direction and control and (2) that they are providing services by way of an independently established business in order to be considered an independent contractor.

Characteristics of an Independent Contractor
1.    Salesperson sets his or her own schedule and determines where services are performed
2.    Salesperson purchases inventory or takes inventory on consignment at sales worker’s discretion
3.    Salesperson supplies necessary tools of the trade such as telephony, fax, and internet connections as well as his or her own call lists / leads lists.
4.    Salesperson seeks out and cultivates his or her own client base
5.    Salesperson is free to determine marketing strategies and implementation
6.    Salesperson is free to set the terms of sale or make adjustments to contracts for services or sales
7.    Salesperson markets and/or contracts to provide services for multiple businesses
8.    Salesperson services are not a fixed part of another’s business; contracts are for delimited deliverables or time-spans and are not automatically renewed
9.    Salesperson negotiates the terms of his or her compensation
10. Salesperson is not subject to quality control checks

Characteristics of an Employee
1.    Salesperson works when and where the employer directs
2.    Salesperson must manage customer interaction according to employer’s policy / direction and is subject to quality control checks
3.    Salesperson does not incur the cost of necessary tools; employer supplies communications connections, leads, work space
4.    Salesperson follows employer-prescribed directives on price and terms of sales to customers
5.    Salesperson performs marketing services for one employer as a fixed part of that employer’s business model
6.    Salesperson is paid according to employer’s compensation plan

Signature gatherers

Paid signature gatherers, sometimes also referred to as petition circulators, obtain voters’ signatures in support of initiative, referendum or recall campaigns. All paid signature gatherers are employees unless they meet all the requirements for independent contractors at ORS 670.600, including the operation of an independently established business.

Some non-profit campaigns obtain all or part of the signatures they need through the efforts of volunteers. Keep in mind, however, that volunteers are considered employees if they are paid for their services or expect payment for their services.

Though many campaigns require signature gatherers to sign a contract, a contract, by itself, does not convert workers into independent contractors. Individual signature gatherers must meet all of the criteria of ORS 670.600 to be considered independent contractors, including the operation of an independently established business. A campaign may contract with a crew of signature gatherers; however, unless the crew leader meets the requirements of independent contractor law, both that individual and the crew will be considered employees of the campaign.

In all cases, campaigns are responsible to conduct their operations within the bounds of elections law and retain some liability for violations of that law even when committed by contractors or subcontractors of the campaign. Also, whether as an employee or independent contractor, keep in mind that it is unlawful to pay or receive money or any other thing of value based on the number of signatures obtained on an initiative or referendum petition. See Article IV§1b of the Oregon Constitution.

Taxicab Operators

Taxicab drivers who do not own their own vehicles may lease or rent equipment from another provider of taxicab services. Sometimes these agreements state that the person leasing or renting the cab is an independent contractor. It is important to remember that for someone to be an independent contractor, they must meet the criteria of ORS 670.600 including (1) that they be free from the right of another to control how services are performed and, (2) that the worker operates an independently established business.

Where the criteria for an independent contractor are not met, a taxicab operator will be considered an employee, regardless of how the relationship may be characterized on paper or by the parties involved. In a case on point, the Ninth Circuit Court of Appeals recently determined that certain taxicab drivers of the Friendly Cab Company, Inc., who had leased their vehicles and signed agreements specifying they were not employees, were nevertheless employees because the cab company “exercised considerable control over the means and manner of its drivers’ performance and did not provide its drivers the ability to pursue entrepreneurial opportunities.” NLRB v. Friendly Cab Company, Inc.

Additional detail can be found within the text of the Oregon Supreme Court decision on Broadway Cab v. Employment Department (2015)

Note: Although Oregon’s wage and hour law exempts taxicab operators from the requirements of minimum wage and overtime, most employers are subject to federal law which requires that taxicab operators receive at least minimum wage for all hours worked.

Characteristics of an Independent Contractor
1.    Driver asserts he or she is self-employed and generally operates under his or her own business name
2.    Driver usually owns his or her own vehicle
3.    Driver may hire additional taxicab operators to drive his or her vehicle(s).
4.    Driver maintains his or her own liability insurance and business licenses
5.    Driver requires no training or supervision
6.    Driver determines which hours / days he or she will perform work
7.    Driver is responsible for expenses (gas & maintenance)
8.    Driver is free to accept or decline a fare

Characteristics of an Employee
1.    Driver operates under the business name or cab license of another
2.    Driver is subject to workplace policies of another
3.    Driver performs services on an ongoing basis accepting fares / referrals from another
4.    Driver is not free to decline fares
5.    Expenses (gas & maintenance) for vehicle are the responsibility of another
6.    Driver does not control the price of fare
7.    Vehicle and equipment are provided by another

Telemarketing

People who perform telemarketing services may work from their home or a call center. The determination as to whether they are employees or independent contractors still turns on whether they meet the requirements of ORS 670.600 – principally that they are (1) free from direction and control and (2) that they are providing services by way of an independently established business.

Characteristics of an Independent Contractor
1.    Telemarketer sets his or her own schedule and determines where services are performed
2.    Telemarketer supplies necessary tools of the trade such as telephony, fax, and internet connections as well as his or her own call lists / leads lists.
3.    Telemarketer is free to set the terms of sale or make adjustments to contracts for services or sales
4.    Telemarketer is not subject to quality control checks
5.    Telemarketer markets and/or contracts to provide services for multiple businesses
6.    Telemarketer’s services are not a fixed part of another’s business; contracts are for delimited deliverables or time-spans and are not automatically renewed
7.    Telemarketer negotiates the terms of his or her compensation
8.    Telemarketer may purchase inventory and market as independent reseller of products/services

Characteristics of an Employee
1.    Telemarketer works when and where the employer directs
2.    Telemarketer must manage customer interaction according to employer’s policy / direction and is subject to quality control checks
3.    Telemarketer does not incur the cost of necessary tools; employer supplies communications connections, leads, work space
4.    Telemarketer follows employer-prescribed directives on price and terms of sales to customers
5.    Telemarketer performs marketing services for one employer as a fixed part of that employer’s business model
6.    Telemarketer is paid according to employer’s compensation plan

Travel agents

People who perform work providing travel related services often work on a commission or fee basis rather than on an hourly basis and some work within shared office/retail space with other individuals who provide similar or related services. In any case, each worker providing travel related services must meet the requirements of ORS 670.600 – principally that they are (1) free from direction and control and (2) that they are providing services by way of an independently established business in order to be considered an independent contractor.

Characteristics of an Independent Contractor
1.    Agent sets his or her own schedule and determines when and where services are performed
2.    Agent determines which travel services providers (e.g., airways, rail lines, cruise ships, rentals) he or she will offer to clients
3.    Agent arranges for all necessary tools and supplies of the trade such as telephone, fax, and internet connections as well as his or her own call lists / leads lists.
4.    Agent seeks out and cultivates his or her own client base
5.    Agent is free to determine marketing strategies and implementation
6.    Agent is free as a reseller of travel services to set the terms of sale or make adjustments to contracts for services or sales
7.    Agent services are not a fixed part of another’s business
8.    Agent negotiates the terms of his or her compensation
9.    Agent is not subject to quality control checks

Characteristics of an Employee
1.    Agent does not represent him or herself as a separate business entity
2.    Agent works when and where the employer directs
3.    Agent must manage customer interaction according to his or her employer’s policy / direction and is subject to quality control checks
4.    Agent does not incur the cost of necessary tools; employer supplies communications connections, leads, work space
5.    Agent follows employer-prescribed directives on price and terms of sales to customers
6.    Agent performs marketing services for one employer as a fixed part of that employer’s business model
7.    Agent is paid according to employer’s compensation plan

Note: Payments for some services can be excluded from the definition of wages for payroll reporting purposes. This does not mean the worker is an independent contractor. It only means that the amounts paid will not be reported as wages to an employee. Exclusions vary based on Oregon law. To find out more about the definition of "wages" for payroll reporting purposes, please contact:
•    Tax law (Department of Revenue)
•    Employment law (Employment Department)
•    Construction licensing (Construction Contractors Board)
•    Landscape licensing (Landscape Contractors Board)

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.