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Employee or Independent Contractor?


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 Comments on this website are informational in nature and are not intended to
be interpreted as specific tax advice.   The comments cannot be used to avoid taxes under the Internal Revenue Code or the regulations of other tax authorities. Furthermore, this website is not intended, and should not be interpreted, to support the promotion or marketing of any tax avoidance schemes.

 

Date last modified:
01/26/17
 

For a worker to be considered an Independent Contractor in the State of Oregon, all of the following provisions must be met. If the person is working for you on a regular basis and if any one the eight points is not met, the worker may be considered an employee. You, as the employer, would then be required to file quarterly payroll tax reports, pay payroll taxes and provide workers' compensation insurance.  Having a worker's status reclassified is an expensive proposition for a business.

    1. The worker is free from your direction and control over the means and manner of providing the labor or services.

    2. The worker has obtained all business registrations or professional licenses required to conduct business, as well as liability and/or professional insurance, bonds, etc.

    3. The worker furnishes his/her own tools or equipment necessary to perform the labor or provide the service.

    4. The worker has the authority to hire and fire his/her own assistants to perform labor or services.

    5. Payment for labor or services is made upon completion of the job or a specific portion of a project, or is made as an annual or periodic retainer.

    6. When required, the worker is currently registered with the Contractors Board.

    7. The worker files federal and state income tax returns in the name of his/her business, using the appropriate forms.

    8. The worker represents to the public that his/her labor or services are provided by an independently established business.

  For more information, go to the State of Oregon, Workers' Compensation Division website. If you are an employer in another state, check the labor laws before you hire new employees or bring on a contractor.