Knowing whether your workers are employees or independent contractors will help ensure you comply with workers’ compensation and other employment laws. When workers are employees, the employer is responsible to provide workers’ compensation coverage. Oregon does not require coverage for independent contractors.
People often believe workers to be independent contractors when they are not, particularly in certain industries where they are common. However, errors in classifying workers can be costly for a business.
Oregon state agencies enforce the independent contractor law differently, so it is important to understand how the Workers’ Compensation Division defines independent contractor.
Independent contractors under the workers’ compensation law meet the following criteria:
- Provide a service under a contract without direction and control, or without others having the right to direct and control the provision of those servicers.
- Control how the service is provided, who provides it, and the means of accomplishing it.
- Are free from actual direction and control and free from another’s right to direct and control.
The creation or use of a business entity, such as a corporation or partnership, does not by itself establish that the entity is an independent contractors.
List of common characteristics of independent contractors