Consideration 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 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

That they be free from the right of another to control how services are performed and,
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

Caregiver asserts he or she is self-employed and generally serves more than one client
Caregiver provides his or her own transportation between clients
Caregiver maintains his or her own liability insurance and business licenses
Caregiver requires no training or supervision
Caregiver arranges his or her own fees and availability directly with the client
Caregiver is free to accept or decline a client

Characteristics of an Employee

Caregiver operates under the business name of another or in direct hire situations, without a business name
Caregiver is subject to workplace policies and supervision
Caregiver performs services on an ongoing basis
Caregiver is not free to decline work
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 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

FLC asserts he or she is self-employed and generally maintains his or her own client list or customer base FLC hires agricultural laborers and pays them directly
FLC hires agricultural laborers and pays them directly
FLC maintains his or her own liability insurance and business licenses
FLC may perform services the alleged employer is not qualified or able to supply
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
Necessary tools and equipment (including mechanized equipment) are furnished by FLC
FLC requires no training or supervision
8FLC has some voice in determining the hours of performing the work
Work is not performed on a continuous basis, but rather on a job to job basis
Pay is generally by the job and is negotiated with the FLC
FLC invoices the agricultural employer for work performed
FLC is not reimbursed by the alleged employer for expenses
Payment from the agricultural employer is made to the company or DBA of the FLC

Characteristics of an Employee

Worker is not free from the right of the agricultural employer to direct and control how services are provided
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
Worker performs services on an ongoing basis for the agricultural employer
Worker's services are directly integrated in the primary service supplied by the employer
Agricultural employer supervises the worker in the details of the projects or assignments
Agricultural employer provides the facilities, tools, equipment, and/or supplies for the work
Agricultural employer provides office space and clerical help to the worker at no cost
Worker requires training and/or supervision
Worker does not determine the hours or the details of the work
Worker is subject to routine quality control checks
Worker is required to furnish regular reports to the agricultural employer
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
Pay rate is unilaterally set by the alleged employer
Pay is by hourly wage, piece rate or salary, rather than by the job
Agricultural employer reimburses the worker for expenses associated with the job
Worker is covered by all or part of the agricultural employer's benefits plan and liability insurance

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

Worker asserts he or she is self-employed and generally maintains his or her own client list or customer base and advertising
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
Worker is free to hire additional laborers and pays them directly
Worker maintains his or her own liability insurance and business licenses
Worker pays a flat rate for business space
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
Worker may perform services which the larger business is not qualified or able to supply
Work may not be performed for the business on a continuous basis, but rather on a job to job or referral basis
Necessary tools equipment and supplies are furnished by the worker
Worker requires no training or supervision
Worker determines the hours of work and schedules when work will be performed
Pay is generally by the job and is negotiated with the worker
Worker invoices the business for work performed
Payments from the business or clients are made to the company or DBA of the worker

Characteristics of an Employee

Worker is not free from the right of the business where he or she is located to direct and control how services are provided
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
Worker does not determine the hours or the details of the work
Worker does not provide the facilities, tools, equipment, and/or supplies for the work; Worker receives reimbursement for expenses associated with the job
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
Worker does not choose which clients he or she will engage
Worker performs services on an ongoing basis for the business where he or she is located
Worker's services are directly integrated in the primary service supplied by the employer
Worker may require training and/or supervision; Worker is subject to routine quality control checks
Pay may be by hourly wage, piece rate or salary, rather than by the job
Pay rate is unilaterally set by the business; worker does not set client’s price for services performed
Worker is covered by all or part of the benefits plan and liability insurance of the business where he or she is located

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

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
Worker is free to hire assistants and pay them directly
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
Worker sets his or her own hours and schedule
Worker maintains his or her own liability insurance and/or business licenses
Worker pays a flat rate for business space
Business does not assert the right to control how the worker performs service to clients
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
Worker requires no training or supervision
Worker sets the price for services performed
Worker may invoice the business for work performed
Payments from the business or clients are made to the company or DBA of the worker

Characteristics of an Employee

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
Worker performs services on an ongoing basis for the business where he or she is located
Worker's services are directly integrated in the primary service supplied by the employer
Worker is not free from the right of the business where he or she is located to direct and control how services are provided
Worker does not choose which clients he or she will engage
Worker does not determine the hours or the details of the work
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
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
Pay rate is unilaterally set by the business; worker does not set client’s price for services performed
Pay may be by hourly wage, piece rate or salary, rather than by the job
Worker receives reimbursement for expenses associated with the job
Worker is covered by all or part of the benefits plan and liability insurance of the business where he or she is located

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

Worker asserts he or she is self-employed and generally maintains his or her own client list and advertising
Worker is free to choose which customers to serve and when; worker is free to pursue additional clients
Worker is free to hire assistants and pay them directly
Worker sets his or her own hours and schedule
Worker often performs a service the alleged employer is not qualified or able to supply
Work is performed on a job by job basis
Business does not assert the right to control how the worker performs service
Worker is highly skilled/requires no training or supervision
Necessary tools equipment and supplies are furnished by the worker
Worker sets the price for services performed
Worker invoices the business for work performed
Payments from the business are made to the company or DBA of the worker
Worker is not reimbursed by the alleged employer for expenses
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

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
Worker performs services on an ongoing basis for the business where he or she is located
Worker's services are often directly integrated in the primary service supplied by the employer
Worker is not free from the right of the business where he or she is located to direct and control how services are provided
Worker does not choose which clients he or she will engage on behalf of business
Worker does not determine the hours or the details of the work assigned
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
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
Pay rate is unilaterally set by the business
Pay may be by hourly wage, piece rate or salary, rather than by the job
Worker receives reimbursement for expenses associated with the job
Worker is covered by all or part of the benefits plan and liability insurance of the business where he or she is located

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

Consultant asserts he or she is self-employed and generally maintains his or her own client list or customer base
Consultant has the right to hire assistants and to pay them out of his or her own pocket
Consultant maintains his or her own errors and omissions liability insurance
Consultant is often hired locally where the alleged employer performs the overall project
Alleged employer is interested only in the outcome of the work, not in the details of how the work is done
Consultant performs a service the alleged employer is not qualified or able to supply
Work is not performed on a continuous basis, but rather on a job to job basis
Work is generally performed at contractor's office/home (or the alleged employer’s project site)
Necessary tools and equipment are furnished by consultant
Supplies/materials are furnished by consultant without reimbursement from alleged employer
Consultant is highly skilled/requires no training or supervision
Consultant has some voice in determining the hours of performing the work
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
Pay is generally by the job and is negotiated with the consultant
Consultant invoices the alleged employer for work performed
Payment is made to the company or DBA of the consultant
Consultant is not reimbursed by the alleged employer for expenses
Consultant is not covered by the alleged employer's benefit plan

Characteristics of an Employee

Worker considers himself or herself to be an employee
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
Worker performs services on an ongoing basis for the alleged employer
Worker's services are directly integrated in the primary service supplied by the employer
Alleged employer supervises the worker in the details of the projects or assignments
Worker does not determine the hours or the details of how the work is performed
Alleged employer provides the facilities, tools, equipment, and/or supplies for the work
Alleged employer provides office space and clerical help to the worker at no cost
Worker may require training and/or periodic supervision
Worker is subject to routine quality control checks
Worker is required to furnish regular reports to the alleged employer
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
Pay is by hourly wage or salary, rather than by the job
Pay rate is unilaterally set by the alleged employer
Alleged employer reimburses the worker for expenses associated with the job
Worker is covered by all or part of the alleged employer's benefits plan and liability insurance

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

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

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

Characteristics of an Employee

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

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

Service Provider sets his or her own schedule and determines where services are performed
Service Provider supplies the necessary tools of the trade such as tools, vehicles, phone, gas, advertising and internet/phone service
Service Provider is free to set the terms of sale or make adjustments to contracts for services or sales
Service Provider is not subject to quality control checks or reviews
Service Provider markets and/or contracts to provide services for multiple businesses
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
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

Service Provider works when and where the employer directs
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)
Service Provider does not incur the cost of all the necessary tools; employer supplies communication connections, leads/customers and/or platform providing work assignments
Service Provider follows employer-prescribed directives on price and terms of sales to customers
Service Provider performs services for platform customer as a fixed part of that employer's business model
Service Provider is paid according to the employer's compensation plan
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 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

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

Characteristics of an Employee

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

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.

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 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

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

Characteristics of an Employee

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

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

Operator asserts he or she is self-employed and generally operates under his or her own business name
Operator usually owns the necessary equipment to do the work.
perator may hire operators or drivers as he or she deems necessary
Operator maintains his or her own liability insurance and business licenses
Operator requires no training or supervision
Operator determines which hours / days he or she will perform work
Operator is responsible for expenses (gas & maintenance)
Operator bids / invoices each job individually
Operator is free to accept or decline a contract
1Operator 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

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

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

Maintenance / Janitorial Contractor may advertise for customers using his or her own name or business name
Maintenance / Janitorial Contractor makes independent decisions about which contracts he or she will take on
Maintenance / Janitorial Contractor sets / negotiates prices for services performed for customers
Maintenance / Janitorial Contractor stands to receive the benefit of goodwill and to make a profit by the performance of services
Maintenance / Janitorial Contractor determines work hours
Maintenance / Janitorial Contractor warrants work; has own liability insurance
Maintenance / Janitorial Contractor is free to hire and fire other workers at his or her own expense
Maintenance / Janitorial Contractor determines which suppliers to use and may negotiate prices for cleaning supplies
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

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

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.

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

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

Characteristics of an Employee

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

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

Salesperson sets his or her own schedule and determines where services are performed
Salesperson purchases inventory or takes inventory on consignment at sales worker’s discretion
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.
Salesperson seeks out and cultivates his or her own client base
Salesperson is free to determine marketing strategies and implementation
Salesperson is free to set the terms of sale or make adjustments to contracts for services or sales
Salesperson markets and/or contracts to provide services for multiple businesses
Salesperson services are not a fixed part of another’s business; contracts are for delimited deliverables or time-spans and are not automatically renewed
Salesperson negotiates the terms of his or her compensation
Salesperson is not subject to quality control checks

Characteristics of an Employee

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

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 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

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

Characteristics of an Employee

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

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

Telemarketer sets his or her own schedule and determines where services are performed
2Telemarketer supplies necessary tools of the trade such as telephony, fax, and internet connections as well as his or her own call lists / leads lists.
Telemarketer is free to set the terms of sale or make adjustments to contracts for services or sales
Telemarketer is not subject to quality control checks
Telemarketer markets and/or contracts to provide services for multiple businesses
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
Telemarketer negotiates the terms of his or her compensation
Telemarketer may purchase inventory and market as independent reseller of products/services

Characteristics of an Employee

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

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

Agent sets his or her own schedule and determines when and where services are performed
Agent determines which travel services providers (e.g., airways, rail lines, cruise ships, rentals) he or she will offer to clients
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.
Agent seeks out and cultivates his or her own client base
Agent is free to determine marketing strategies and implementation
Agent is free as a reseller of travel services to set the terms of sale or make adjustments to contracts for services or sales
Agent services are not a fixed part of another’s business
Agent negotiates the terms of his or her compensation
Agent is not subject to quality control checks

Characteristics of an Employee

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

“Direction and Control” is one of the key criteria used by all state agencies to determine whether a worker is an independent contractor or an employee (for a complete list, check out our state agency criteria chart).

To be considered an independent contractor, any worker performing services for you must be free from your right to direct or control how those services are performed. If the worker is not free from direction and control, he or she will be considered an employee by state enforcement agencies.

Evidence of “direction and control” can include practices like:

Telling the worker how to dress or act on the job.
Telling the worker he or she can only work on the job at specific times.
Requiring the worker obtain approval for decisions to hire or fire other workers.
Requiring the worker to complete a training program you administer.

Be sure to check out the full text of the legal definition of “direction and control” used by the agencies which apply ORS 670.600 (Oregon Department of Revenue, Employment Department, Department of Consumer & Business Services’ Workers’ Compensation Division, Construction Contractors Board, and Landscape Contractors Board).

Note: To be considered an independent contractor under ORS 670.600, a worker must meet all the criteria of that law (not just the requirement concerning direction and control).

Keep in mind that certain agencies must follow different worker classification criteria. Additional agency-specific information on worker classification is available from Bureau of Labor and Industries.

An “independently established business” is one of the criteria used by state agencies to determine whether a worker is an independent contractor or an employee (for a complete list, check out our state agency criteria chart).

To be considered an independent contractor under ORS 670.600, a worker must (among other things) maintain an “independently established business.”

An “independently established business” is defined as meeting any three of the following five requirements:

(1) The person maintains a business location:

That is separate from the business or work location of the person for whom the services are provided; or
That is in a portion of the person’s residence and that portion is used primarily for the business.

(2) The person bears the risk of loss related to the business or the provision of services as shown by factors such as:

The person enters into fixed-price contracts;
The person is required to correct defective work;
The person warrants the services provided; or
The person negotiates indemnification agreements or purchases liability insurance, performance bonds or errors and omissions insurance.

(3) The person provides contracted services for two or more different persons within a 12-month period, or the person routinely engages in business advertising, solicitation or other marketing efforts reasonably calculated to obtain new contracts to provide similar services.

(4) The person makes a significant investment in the business, through means such as:

Purchasing tools or equipment necessary to provide the services;
Paying for the premises or facilities where the services are provided; or
Paying for licenses, certificates or specialized training required to provide the services.

(5) The person has the authority to hire other persons to provide or to assist in providing the services and has the authority to fire those persons.

The requirement to maintain an independently established business does not apply if the person files a Schedule F as part of an income tax return and the person provides farm labor or farm services that are reportable on Schedule C of an income tax return.

Note: To be considered an independent contractor under ORS 670.600, a worker must meet all the criteria of that law (not just the requirement concerning an “independently established business”).

According to the Internal Revenue Service, both of these forms are called information returns. The Form W-2 is used by employers to:

Report wages, tips and other compensation paid to an employee.
To report the employee's income tax and Social Security taxes withheld and any advanced earned income credit payments.
To report wage information to the employee, and the Social Security Administration. The Social Security Administration shares the information with the Internal Revenue Service.

A Form 1099-MISC is:

Generally, used to report payments made in the course of a trade or business to a person who is not an employee or to an unincorporated business.
Required among other things, when payments of $10 or more in gross royalties or $600 or more in rents or compensation are paid.
Provided by the payer to the IRS and the person or business that received the payment.”

The common misconception is that a given worker’s classification as either an employee or as an independent contractor is somehow determined by which information return form you provide to the worker at the end of the year.

A classification determination is always made on the basis of whether the worker meets the specific legal criteria for an independent contractor under Oregon law.

For more information on how the IRS handles its classifications determinations, check out their website. If you think someone is an independent contractor and you want the IRS to decide, you can request a determination by way of Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.

Not necessarily. The deciding factor in determining whether someone is an independent contractor is whether that person meets the requirements set out for an independent contractor in state law. (You can check out our summary of those requirements in chart form or read through a more complete discussion here.)

With that said, the way you pay a worker can be an indicator of whether that person meets those requirements. For example, ORS 670.600 requires (among other things) that independent contractors maintain an “independently established business,” and one of the potential indicators of such a business is that the worker enters into “fixed price contracts.” If you are paying a worker by way of fixed price contracts (as opposed to, say, an hourly rate of wage) that worker is meeting at least one of the requirements to be considered an independent contractor under the law.

Note: To be considered an independent contractor under ORS 670.600, a worker must meet all the criteria of that law (not just one, such as the requirement concerning an “independently established business”).

State enforcement agencies (and the courts) apply specific legal criteria to determine whether a worker meets the requirements to be considered an independent contractor. If those requirements are not met, that worker is classified as an employee, regardless of how the relationship is characterized on paper. You can check out a summary of the state agencies’ criteria in chart form or click here for a more complete discussion.

Although it can be tempting to reclassify an employee as an independent contractor, you should be aware that doing so will require several trade-offs in your current relationship with the employee and there is certainly a risk of liability if your reclassification fails to reflect the worker’s actual status under state law.

State enforcement agencies (and the courts) apply specific legal criteria to determine whether a worker meets the requirements to be considered an independent contractor. If those requirements are not met, that worker is classified as an employee, regardless of how the relationship is characterized on paper. (A summary of the state agencies’ criteria is available in chart form by clicking here.)

In general, a bona fide independent contractor must be free from "direction and control" as to how the work is performed and is almost always required to maintain an "independently established business." If you reclassify an employee as an independent contractor, but you do not give up control over how he or she does the work (or the worker does not run a business independent of your own) that worker is still an employee.

A state boundary in itself does not establish an independent contractor relationship. If you hire a person from another state to work for you in Oregon, Oregon law would decide if they are an independent contractor. Likewise, if you send an Oregon resident to work in another state on a temporary basis for an Oregon employer, Oregon law would decide if the worker is an independent contractor.

If an employer from another state hires an Oregon worker to perform services in Oregon, Oregon law would decide the worker’s status.

To find out where workers are reported for unemployment insurance, see Employment Department informational flyer regarding Multi-State Employment.

No. A professional or trade license represents the legal right to perform services in a given trade or profession. It does not indicate, however, that the licensee has also met the requirements set out for an independent contractor in state law.

As an example, ORS 670.600 requires that independent contractors be responsible for obtaining any necessary licenses or certificates to provide services, however, under that law a bona fide independent contractor must also maintain an "independently established business" and perform his or her work free from the "direction and control" of another. So if a cosmetologist, for example, is not free from the direction and control of the establishment where he or she provides cosmetology services, that cosmetologist would not be an independent contractor, despite the fact that he or she is required to obtain a license from the Oregon Health Licensing Agency’s Board of Cosmetology.

No, Oregon does not issue an independent contractor license. Although various trades and professional occupations may have licensure requirements, merely holding such a license does not make anyone into an independent contractor. To be considered an independent contractor, the worker must meet the requirements of Oregon law.

For additional information on Oregon licenses, certifications, permits, and registrations, be sure to check out the Oregon License Directory online.

It is important to remember that for someone to be an independent contractor, they must meet the criteria of ORS 670.600 including

That they be free from the right of another to control how services are performed and,
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

Caregiver asserts he or she is self-employed and generally serves more than one client
Caregiver provides his or her own transportation between clients
Caregiver maintains his or her own liability insurance and business licenses
Caregiver requires no training or supervision
Caregiver arranges his or her own fees and availability directly with the client
Caregiver is free to accept or decline a client

Characteristics of an Employee

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

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

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

FLC asserts he or she is self-employed and generally maintains his or her own client list or customer base FLC hires agricultural laborers and pays them directly
FLC hires agricultural laborers and pays them directly
FLC maintains his or her own liability insurance and business licenses
FLC may perform services the alleged employer is not qualified or able to supply
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
Necessary tools and equipment (including mechanized equipment) are furnished by FLC
FLC requires no training or supervision
8FLC has some voice in determining the hours of performing the work
Work is not performed on a continuous basis, but rather on a job to job basis
Pay is generally by the job and is negotiated with the FLC
FLC invoices the agricultural employer for work performed
FLC is not reimbursed by the alleged employer for expenses
Payment from the agricultural employer is made to the company or DBA of the FLC

Characteristics of an Employee

Worker is not free from the right of the agricultural employer to direct and control how services are provided
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
Worker performs services on an ongoing basis for the agricultural employer
Worker's services are directly integrated in the primary service supplied by the employer
Agricultural employer supervises the worker in the details of the projects or assignments
Agricultural employer provides the facilities, tools, equipment, and/or supplies for the work
Agricultural employer provides office space and clerical help to the worker at no cost
Worker requires training and/or supervision
Worker does not determine the hours or the details of the work
Worker is subject to routine quality control checks
Worker is required to furnish regular reports to the agricultural employer
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
Pay rate is unilaterally set by the alleged employer
Pay is by hourly wage, piece rate or salary, rather than by the job
Agricultural employer reimburses the worker for expenses associated with the job
Worker is covered by all or part of the agricultural employer's benefits plan and liability insurance

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.

Characteristics of an Independent Contractor

Worker asserts he or she is self-employed and generally maintains his or her own client list or customer base and advertising
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
Worker is free to hire additional laborers and pays them directly
Worker maintains his or her own liability insurance and business licenses
Worker pays a flat rate for business space
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
Worker may perform services which the larger business is not qualified or able to supply
Work may not be performed for the business on a continuous basis, but rather on a job to job or referral basis
Necessary tools equipment and supplies are furnished by the worker
Worker requires no training or supervision
Worker determines the hours of work and schedules when work will be performed
Pay is generally by the job and is negotiated with the worker
Worker invoices the business for work performed
Payments from the business or clients are made to the company or DBA of the worker

Characteristics of an Employee

Worker is not free from the right of the business where he or she is located to direct and control how services are provided
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
Worker does not determine the hours or the details of the work
Worker does not provide the facilities, tools, equipment, and/or supplies for the work; Worker receives reimbursement for expenses associated with the job
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
Worker does not choose which clients he or she will engage
Worker performs services on an ongoing basis for the business where he or she is located
Worker's services are directly integrated in the primary service supplied by the employer
Worker may require training and/or supervision; Worker is subject to routine quality control checks
Pay may be by hourly wage, piece rate or salary, rather than by the job
Pay rate is unilaterally set by the business; worker does not set client’s price for services performed
Worker is covered by all or part of the benefits plan and liability insurance of the business where he or she is located

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.

Characteristics of an Independent Contractor

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
Worker is free to hire assistants and pay them directly
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
Worker sets his or her own hours and schedule
Worker maintains his or her own liability insurance and/or business licenses
Worker pays a flat rate for business space
Business does not assert the right to control how the worker performs service to clients
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
Worker requires no training or supervision
Worker sets the price for services performed
Worker may invoice the business for work performed
Payments from the business or clients are made to the company or DBA of the worker

Characteristics of an Employee

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
Worker performs services on an ongoing basis for the business where he or she is located
Worker's services are directly integrated in the primary service supplied by the employer
Worker is not free from the right of the business where he or she is located to direct and control how services are provided
Worker does not choose which clients he or she will engage
Worker does not determine the hours or the details of the work
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
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
Pay rate is unilaterally set by the business; worker does not set client’s price for services performed
Pay may be by hourly wage, piece rate or salary, rather than by the job
Worker receives reimbursement for expenses associated with the job
Worker is covered by all or part of the benefits plan and liability insurance of the business where he or she is located

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

Characteristics of an Independent Contractor

Worker asserts he or she is self-employed and generally maintains his or her own client list and advertising
Worker is free to choose which customers to serve and when; worker is free to pursue additional clients
Worker is free to hire assistants and pay them directly
Worker sets his or her own hours and schedule
Worker often performs a service the alleged employer is not qualified or able to supply
Work is performed on a job by job basis
Business does not assert the right to control how the worker performs service
Worker is highly skilled/requires no training or supervision
Necessary tools equipment and supplies are furnished by the worker
Worker sets the price for services performed
Worker invoices the business for work performed
Payments from the business are made to the company or DBA of the worker
Worker is not reimbursed by the alleged employer for expenses
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

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
Worker performs services on an ongoing basis for the business where he or she is located
Worker's services are often directly integrated in the primary service supplied by the employer
Worker is not free from the right of the business where he or she is located to direct and control how services are provided
Worker does not choose which clients he or she will engage on behalf of business
Worker does not determine the hours or the details of the work assigned
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
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
Pay rate is unilaterally set by the business
Pay may be by hourly wage, piece rate or salary, rather than by the job
Worker receives reimbursement for expenses associated with the job
Worker is covered by all or part of the benefits plan and liability insurance of the business where he or she is located

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.

Characteristics of an Independent Contractor

Consultant asserts he or she is self-employed and generally maintains his or her own client list or customer base
Consultant has the right to hire assistants and to pay them out of his or her own pocket
Consultant maintains his or her own errors and omissions liability insurance
Consultant is often hired locally where the alleged employer performs the overall project
Alleged employer is interested only in the outcome of the work, not in the details of how the work is done
Consultant performs a service the alleged employer is not qualified or able to supply
Work is not performed on a continuous basis, but rather on a job to job basis
Work is generally performed at contractor's office/home (or the alleged employer’s project site)
Necessary tools and equipment are furnished by consultant
Supplies/materials are furnished by consultant without reimbursement from alleged employer
Consultant is highly skilled/requires no training or supervision
Consultant has some voice in determining the hours of performing the work
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
Pay is generally by the job and is negotiated with the consultant
Consultant invoices the alleged employer for work performed
Payment is made to the company or DBA of the consultant
Consultant is not reimbursed by the alleged employer for expenses
Consultant is not covered by the alleged employer's benefit plan

Characteristics of an Employee

Worker considers himself or herself to be an employee
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
Worker performs services on an ongoing basis for the alleged employer
Worker's services are directly integrated in the primary service supplied by the employer
Alleged employer supervises the worker in the details of the projects or assignments
Worker does not determine the hours or the details of how the work is performed
Alleged employer provides the facilities, tools, equipment, and/or supplies for the work
Alleged employer provides office space and clerical help to the worker at no cost
Worker may require training and/or periodic supervision
Worker is subject to routine quality control checks
Worker is required to furnish regular reports to the alleged employer
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
Pay is by hourly wage or salary, rather than by the job
Pay rate is unilaterally set by the alleged employer
Alleged employer reimburses the worker for expenses associated with the job
Worker is covered by all or part of the alleged employer's benefits plan and liability insurance

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

Characteristics of an Independent Contractor

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

Characteristics of an Employee

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

Characteristics of an Independent Contractor

Service Provider sets his or her own schedule and determines where services are performed
Service Provider supplies the necessary tools of the trade such as tools, vehicles, phone, gas, advertising and internet/phone service
Service Provider is free to set the terms of sale or make adjustments to contracts for services or sales
Service Provider is not subject to quality control checks or reviews
Service Provider markets and/or contracts to provide services for multiple businesses
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
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

Service Provider works when and where the employer directs
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)
Service Provider does not incur the cost of all the necessary tools; employer supplies communication connections, leads/customers and/or platform providing work assignments
Service Provider follows employer-prescribed directives on price and terms of sales to customers
Service Provider performs services for platform customer as a fixed part of that employer's business model
Service Provider is paid according to the employer's compensation plan
Service Provider is not allowed to solicit further business from the customer but must refer them back to the platform for future 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.

Characteristics of an Independent Contractor

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

Characteristics of an Employee

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

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

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

Characteristics of an Employee

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

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

Characteristics of an Independent Contractor

Operator asserts he or she is self-employed and generally operates under his or her own business name
Operator usually owns the necessary equipment to do the work.
perator may hire operators or drivers as he or she deems necessary
Operator maintains his or her own liability insurance and business licenses
Operator requires no training or supervision
Operator determines which hours / days he or she will perform work
Operator is responsible for expenses (gas & maintenance)
Operator bids / invoices each job individually
Operator is free to accept or decline a contract
1Operator 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

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

Characteristics of an Independent Contractor

Maintenance / Janitorial Contractor may advertise for customers using his or her own name or business name
Maintenance / Janitorial Contractor makes independent decisions about which contracts he or she will take on
Maintenance / Janitorial Contractor sets / negotiates prices for services performed for customers
Maintenance / Janitorial Contractor stands to receive the benefit of goodwill and to make a profit by the performance of services
Maintenance / Janitorial Contractor determines work hours
Maintenance / Janitorial Contractor warrants work; has own liability insurance
Maintenance / Janitorial Contractor is free to hire and fire other workers at his or her own expense
Maintenance / Janitorial Contractor determines which suppliers to use and may negotiate prices for cleaning supplies
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

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

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)

Characteristics of an Independent Contractor

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

Characteristics of an Employee

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

Characteristics of an Independent Contractor

Salesperson sets his or her own schedule and determines where services are performed
Salesperson purchases inventory or takes inventory on consignment at sales worker’s discretion
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.
Salesperson seeks out and cultivates his or her own client base
Salesperson is free to determine marketing strategies and implementation
Salesperson is free to set the terms of sale or make adjustments to contracts for services or sales
Salesperson markets and/or contracts to provide services for multiple businesses
Salesperson services are not a fixed part of another’s business; contracts are for delimited deliverables or time-spans and are not automatically renewed
Salesperson negotiates the terms of his or her compensation
Salesperson is not subject to quality control checks

Characteristics of an Employee

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

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

Characteristics of an Independent Contractor

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

Characteristics of an Employee

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

Characteristics of an Independent Contractor

Telemarketer sets his or her own schedule and determines where services are performed
2Telemarketer supplies necessary tools of the trade such as telephony, fax, and internet connections as well as his or her own call lists / leads lists.
Telemarketer is free to set the terms of sale or make adjustments to contracts for services or sales
Telemarketer is not subject to quality control checks
Telemarketer markets and/or contracts to provide services for multiple businesses
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
Telemarketer negotiates the terms of his or her compensation
Telemarketer may purchase inventory and market as independent reseller of products/services

Characteristics of an Employee

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

Characteristics of an Independent Contractor

Agent sets his or her own schedule and determines when and where services are performed
Agent determines which travel services providers (e.g., airways, rail lines, cruise ships, rentals) he or she will offer to clients
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.
Agent seeks out and cultivates his or her own client base
Agent is free to determine marketing strategies and implementation
Agent is free as a reseller of travel services to set the terms of sale or make adjustments to contracts for services or sales
Agent services are not a fixed part of another’s business
Agent negotiates the terms of his or her compensation
Agent is not subject to quality control checks

Characteristics of an Employee

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

Evidence of “direction and control” can include practices like:

Telling the worker how to dress or act on the job.
Telling the worker he or she can only work on the job at specific times.
Requiring the worker obtain approval for decisions to hire or fire other workers.
Requiring the worker to complete a training program you administer.

Note: To be considered an independent contractor under ORS 670.600, a worker must meet all the criteria of that law (not just the requirement concerning direction and control).

To be considered an independent contractor under ORS 670.600, a worker must (among other things) maintain an “independently established business.”

An “independently established business” is defined as meeting any three of the following five requirements:

(1) The person maintains a business location:

That is separate from the business or work location of the person for whom the services are provided; or
That is in a portion of the person’s residence and that portion is used primarily for the business.

(2) The person bears the risk of loss related to the business or the provision of services as shown by factors such as:

The person enters into fixed-price contracts;
The person is required to correct defective work;
The person warrants the services provided; or
The person negotiates indemnification agreements or purchases liability insurance, performance bonds or errors and omissions insurance.

(4) The person makes a significant investment in the business, through means such as:

Purchasing tools or equipment necessary to provide the services;
Paying for the premises or facilities where the services are provided; or
Paying for licenses, certificates or specialized training required to provide the services.

(5) The person has the authority to hire other persons to provide or to assist in providing the services and has the authority to fire those persons.

According to the Internal Revenue Service, both of these forms are called information returns. The Form W-2 is used by employers to:

Report wages, tips and other compensation paid to an employee.
To report the employee's income tax and Social Security taxes withheld and any advanced earned income credit payments.
To report wage information to the employee, and the Social Security Administration. The Social Security Administration shares the information with the Internal Revenue Service.

A Form 1099-MISC is:

Generally, used to report payments made in the course of a trade or business to a person who is not an employee or to an unincorporated business.
Required among other things, when payments of $10 or more in gross royalties or $600 or more in rents or compensation are paid.
Provided by the payer to the IRS and the person or business that received the payment.”

A classification determination is always made on the basis of whether the worker meets the specific legal criteria for an independent contractor under Oregon law.

State enforcement agencies (and the courts) apply specific legal criteria to determine whether a worker meets the requirements to be considered an independent contractor. If those requirements are not met, that worker is classified as an employee, regardless of how the relationship is characterized on paper. (A summary of the state agencies’ criteria is available in chart form by clicking here.)

If an employer from another state hires an Oregon worker to perform services in Oregon, Oregon law would decide the worker’s status.

To find out where workers are reported for unemployment insurance, see Employment Department informational flyer regarding Multi-State Employment.

For additional information on Oregon licenses, certifications, permits, and registrations, be sure to check out the Oregon License Directory online.

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.

Consideration for Specific Industries

Adult Foster Care

Characteristics of an Independent Contractor

Characteristics of an Employee

Agriculture Employment

Characteristics of an Independent Contractor

Characteristics of an Employee

Auto Repair/Detailing

Characteristics of an Independent Contractor

Characteristics of an Employee

Barber/Beauty/Nail Salon

Characteristics of an Independent Contractor

Characteristics of an Employee

Computer Programmers/Software Designers

Characteristics of an Independent Contractor

Characteristics of an Employee

Consultants

Characteristics of an Independent Contractor

Characteristics of an Employee

Cottage Industries (making and selling homemade products)

Characteristics of an Independent Contractor

Characteristics of an Employee

Gig Employment

Characteristics of an Independent Contractor

Characteristics of an Employee

In-Home Caregivers

Characteristics of an Independent Contractor

Characteristics of an Employee

Insurance (people performing insurance-related services)

Internet-based Service

Long-Haul Truck Drivers

Characteristics of an Independent Contractor

Characteristics of an Employee

Machine Operators (Excavator Operator, Crane Operator, and Other Equipment Operators)

Characteristics of an Independent Contractor

Characteristics of an Employee

Maintenance/Janitorial/Custodial

Characteristics of an Independent Contractor

Characteristics of an Employee

Mortgage Loan Originators

Pharmacists

Characteristics of an Independent Contractor

Characteristics of an Employee

Sales

Characteristics of an Independent Contractor

Characteristics of an Employee

Signature Gatherers

Taxicab Operators

Characteristics of an Independent Contractor

Characteristics of an Employee

Telemarketing

Characteristics of an Independent Contractor

Characteristics of an Employee

Travel Agents

Characteristics of an Independent Contractor

Characteristics of an Employee

What is "direction and control?"

What is an "independently established business?"

What is the difference between a Form W-2 and a Form 1099-MISC - and what doed it mean?

Does the way I pay a person determine whether that person is an independent contractor?

What if I have a signed contract saying the worker is an independent contractor?

Can I lay off an employee and bring him or her back as an independent contractor?

Can I hire a person from another state as an independent contractor?

Does a professional or trade license make someone an independent contractor?

Is there an independent contractor license?

Adult Foster Care

Characteristics of an Independent Contractor

Characteristics of an Employee

Agriculture Employment

Characteristics of an Independent Contractor

Characteristics of an Employee

Auto Repair/Detailing

Characteristics of an Independent Contractor

Characteristics of an Employee

Barber/Beauty/Nail Salon

Characteristics of an Independent Contractor

Characteristics of an Employee

Computer Programmers/Software Designers

Characteristics of an Independent Contractor

Characteristics of an Employee