Occupations and Professions Generally

ORS 670.600
Independent contractor defined


(1)

As used in this section:

(a)

“Individual” means a natural person.

(b)

“Person” has the meaning given that term in ORS 174.100 (Definitions).

(c)

“Services” means labor or services.

(2)

As used in ORS chapters 316, 656, 657, 671 and 701, “independent contractor” means a person who provides services for remuneration and who, in the provision of the services:

(a)

Is free from direction and control over the means and manner of providing the services, subject only to the right of the person for whom the services are provided to specify the desired results;

(b)

Except as provided in subsection (4) of this section, is customarily engaged in an independently established business;

(c)

Is licensed under ORS chapter 671 or 701 if the person provides services for which a license is required under ORS chapter 671 or 701; and

(d)

Is responsible for obtaining other licenses or certificates necessary to provide the services.

(3)

For purposes of subsection (2)(b) of this section, a person is considered to be customarily engaged in an independently established business if any three of the following requirements are met:

(a)

The person maintains a business location:

(A)

That is separate from the business or work location of the person for whom the services are provided; or

(B)

That is in a portion of the person’s residence and that portion is used primarily for the business.

(b)

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

(A)

The person enters into fixed-price contracts;

(B)

The person is required to correct defective work;

(C)

The person warrants the services provided; or

(D)

The person negotiates indemnification agreements or purchases liability insurance, performance bonds or errors and omissions insurance.

(c)

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.

(d)

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

(A)

Purchasing tools or equipment necessary to provide the services;

(B)

Paying for the premises or facilities where the services are provided; or

(C)

Paying for licenses, certificates or specialized training required to provide the services.

(e)

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.

(4)

Subsection (2)(b) of this section 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.

(5)

For purposes of determining whether an individual provides services as an independent contractor:

(a)

The creation or use of a business entity, such as a corporation or a limited liability company, by an individual for the purpose of providing services does not, by itself, establish that the individual provides services as an independent contractor.

(b)

When the individual provides services through a business entity, such as a corporation or a limited liability company, the provisions in subsection (2), (3) or (4) of this section may be satisfied by the individual or the business entity. [Formerly 701.025; 1997 c.398 §2; 1999 c.402 §9; 2003 c.704 §5; 2005 c.533 §§1,2]

Notes of Decisions

All eight elements must be satisfied before worker is considered independent contractor. Liberty Northwest Ins. Corp. v. Potts, 119 Or App 252, 850 P2d 1135 (1993); HDG Enterprises v. Natl. Council on Comp. Ins., 121 Or App 513, 856 P2d 1037 (1993)

Specification that work meet industry standard, even where only one method exists to achieve industry standard, does not give direction and control over means and manner of providing labor or services. B. King Construction, Inc. v. Natl. Council on Comp. Ins., 120 Or App 420, 852 P2d 927 (1993)

"Direction and control" refers to judicially created "right to control" test applied in conjunction with ORS 656.005, not actual control. S-W Floor Cover Shop v. National Council on Comp. Ins., 318 Or 614, 872 P2d 1 (1994)

Person found not to be worker is not subject to workers' compensation coverage, so determination of person's status as independent contractor is unnecessary. S-W Floor Cover Shop v. National Council on Comp. Ins., 318 Or 614, 872 P2d 1 (1994); Blackledge Furniture Co., Inc. v. National Council on Comp. Ins., 318 Or 632, 872 P2d 10 (1994); Lake Oswego Hunt, Inc. v. National Council on Comp. Ins., 318 Or 636, 872 P2d 12 (1994)

Meeting required number of criteria to qualify as independently established business fulfills requirement that representation of independent business status be made to public. Petersen v. Employment Dept., 135 Or App 344, 898 P2d 210 (1995)

Where determination regarding independent contractor status has been made under one of listed chapters, subsequent action by other agency under different listed chapter must be consistent with initial determination unless agency in subsequent action provides reasoned explanation for inconsistency. Kaib's Roving R.Ph. Agency v. Employment Department, 161 Or App 290, 984 P2d 886 (1999)

Requirement that alleged employer prove by four or more listed factors that individual or business entity is engaged in independently established business applies only where alleged employer satisfies tax return criteria by establishing that individual or entity did not perform labor or services as independent contractor in previous year. Canvasser Services, Inc. v. Employment Dept., 163 Or App 270, 987 P2d 562 (1999), Sup Ct review denied

Principal Factors That Demonstrate Control Over Means and Manner of Providing Services Are

(1) direct evidence of right to or exercise of control; (2) method of payment; (3) furnishing of equipment; and (4) right to fire. Avanti Press v. Employment Department Tax Section, 248 Or App 450, 274 P3d 190 (2012)

Individual does not "maintain a business location" if individual does not pay rent for office space, is not charged for equipment located at office and is not responsible for maintaining office. Compressed Pattern, LLC v. Employment Dept., 253 Or App 254, 293 P3d 1053 (2012)

Person is free from direction and control over means and manner of providing services if oversight primarily relates to desired result, not way in which work is performed. AGAT Transport, Inc. v. Employment Department, 256 Or App 294 (2013)

Taxicab drivers were not independent contractors where drivers used vehicles clearly marked with taxicab company's color and numbers did not conduct business in separate space from company that instead exerted considerable control over all drivers' vehicle, advertised and marketed company's business even when providing drivers' contact information to consumers because transportation services were provided exclusively for company in company-branded cars and were not permitted by company to hire other individuals to provide taxicab services but only to choose company-approved drivers to use drivers' vehicles because company maintained authority to hire and fire service providers. Broadway Cab LLC v. Employment Department, 265 Or App 254, 336 P3d 12 (2014), aff'd 358 Or 431, 364 P3d 338 (2015)

Law Review Citations

31 WLR 647 (1995)


Source

Last accessed
Jun. 26, 2021