Oregon Workers Compensation Insurance Requirements
Workers in many professions can be viewed as either employees or independent contractors. If a worker is considered an employee, the employer must provide workers’ compensation insurance coverage and the worker’s payroll must be reported to the worker’s compensation insurance carrier. However if the worker is an independent contractor the employer does not need to provide coverage or report the payroll.
Oregon Workers Compensation Insurance Law
The Oregon workers compensation insurance law relies on a “no fault” rule that provides benefits regardless of who is responsible for a workplace injury.
There are some exceptions such as employees who hurt themselves due to reckless behavior or drug or alcohol abuse. Also any employees who cause self-inflicted injuries or injure themselves while off-duty or while engaged in a criminal act usually will not qualify for benefits.
The test below was developed by the Oregon Legislature to determine if the worker is free of your direction and control and would be considered an independent contractor. If the answers to these questions are Yes then that worker can be viewed as an independent contractor.
- Is the worker free from my direction and control?
- Does the worker have appropriate business licenses and registration?
- Does the worker provide and maintain the tools and equipment needed to do the work?
- Does the worker have the freedom to hire or fire assistants?
- Is payment made to the worker upon completion of specific portions of the project or an annual or periodic retainer basis?
- Is the worker currently registered with the Contractors Board?
- Did the worker file a tax return with Schedule C under his or her business name last year?
Does the worker meet four of the following six requirements?
- Does the worker work away from his or her personal residence or work at a portion of that residence is set aside as the location of the business?
- Does the worker commercially advertise his or her business or have business cards?
- Does the worker have a telephone listing that is separate from his or her personal telephone residence?
- Does the worker perform work only pursuant to a written contract?
- Does the worker perform services for two or more different employers during a one-year period?
- Does the worker have financial bonding or liability insurance to cover the work performed?
The questions below can be used to determine direction and control when determining a worker’s status.
- Is the worker dependent on the assistance of your other workers or so intermingled with your other workers at the job site that close coordination by you in necessary?
- If you are a specialty contractor, do your day-to-day activities require the type of work performed by this worker?
- Does this worker work on a number of individual contracts for you within a month’s time for which scheduling must be closely coordinated?
- Can you move the worker from one job site to another to meet your requirements? If the worker refused, would you withhold future work opportunities?
- Is the worker required to work continuously until the work is completed?
- Is the worker required to be at the job site at specific times?
- Is the worker told how to do the work verbally, by work order or some other means?
- Is the workers rate of pay the same as your other workers’ rate of pay during the year?
- Did you choose the worker on the basis of a previously established price list provided by the worker?
- Could the worker walk off or quit the job without you having a right to recover damages?
- Do you provide the primary material or commodity for the worker on a job requiring installation or construction?
- Do you provide the primary equipment for the worker on a job (for example, excavation) that does not involve materials?
- Do you pay the worker on a regular weekly, bimonthly, or monthly draw?
If you answered yes to more than half of these questions the worker is more than likely to be considered under your direction and control. Some of these questions may not clearly fit your industry in which case you need to weigh the balance of the relevant questions. If you answered no to more than half of these questions, ask yourself these remaining questions which are also relevant:
- Does the worker perform work that does not require a high degree of skill?
- Does the worker merely extend your work force, rather than bringing a unique skill to your workforce for a short term purpose?
- Is the rate of pay about or below the standard industry rate?
- If the worker does multiple jobs for you on a continuing basis, does the worker’s rate of pay remain the same from job to job.
- Does the worker depend primarily on you for his or her livelihood? (Consider what percentage of your subcontractor work goes to this worker).
- Does the worker’s work constitute a daily activity regularly needed by you rather than a one-time event or situation?
If you answered no to more than half of these questions the worker is more than likely to be considered free from your direction and control.