As with most no-fault insurance, workers’ compensation is fair only if it applies to all workers and employers. The State of Oregon requires almost all employers to carry workers’ compensation insurance on their employees. If you employ workers in Oregon, you probably need workers’ compensation coverage. A worker is anyone you pay to do work for you who is not an independent contractor. You do not have to provide workers’ compensation coverage to independent contractors, though you may choose to do so.
To qualify as an independent contractor, a person must meet three criteria:
- The person must be free from direction and control. In other words, if you have the right to tell someone when, where, and how to do their job, that person is probably a worker.
- The person must be engaged in an independently established business.
ORS 670.600 provides a five factor test used to determine whether a person is engaged in an independently established business.
- The person must satisfy certain licensing requirements, including having a construction or landscape contractor’s license if they are doing work that requires that license.
Workers’ compensation law, unemployment insurance law, and state tax law all use the same test to determine whether a person is an independent contractor. You can find out more about this test at
If you have questions, contact the Workers’ Compensation Division at 888-877-5670 (toll free) or 503-947-7815, or by email at