2017 ORS 657.040¹
Employment
  • when service for pay excluded
  • independent contractors

(1) Services performed by an individual for remuneration are deemed to be employment subject to this chapter unless and until it is shown to the satisfaction of the Director of the Employment Department that the individual is an independent contractor, as that term is defined in ORS 670.600 (Independent contractor defined).

(2) A finding that an individual performed services for an employing unit and earned less than the minimum amount necessary to qualify for benefits under ORS 657.150 (Amount of benefits) based on earnings from that employing unit may not be considered in determining whether the service is employment under subsection (1) of this section. [Amended by 1967 c.303 §1; 1981 c.895 §1; 1985 c.225 §1; 1989 c.762 §6; 2005 c.533 §4]

Notes of Decisions

Mere economic control which exists where a per­son has the right to fire an­oth­er at will is not sufficient to create an employer-employee rela­tionship. Michelet v. Morgan, 11 Or App 79, 501 P2d 984 (1972)

If facts are not disputed ques­tion of whether one is employee or contractor of an­oth­er is ques­tion of law. Michelet v. Morgan, 11 Or App 79, 501 P2d 984 (1972)

Double require­ment, that worker’s occupa­tion be “independently es­tab­lished” and that worker be “customarily” engaged in it, clearly calls for enterprise created and existing separate and apart from rela­tionship with particular employer, an enterprise that will survive the termina­tion of rela­tionship. Barger v. Morgan, 13 Or App 111, 507 P2d 821 (1973), Sup Ct review denied

Word “employ­ment” does not incorporate the common law test for determining master-servant rela­tionship, but rather includes per­sons who may be independent contractors at common law but who do not fulfill the strict exemp­tion require­ments set out. Klamath Dental Office, Inc., v. Morgan, 19 Or App 521, 528 P2d 91 (1974)

Require­ments that per­son be free from direc­tion and control and that per­son customarily engage in independent business are conjunctive rather than disjunctive; thus, if peti­tioner fails to sustain its burden re­gard­ing either factor, exemp­tion require­ments are not met. Timberland Sales, Inc. v. Employ­ment Div., 20 Or App 192, 530 P2d 880 (1975), Sup Ct review denied

Where business works with multiple employers over time, business may be independent notwithstanding that business serves single employer at any given time. Europorama, Inc. v. Employ­ment Div., 22 Or App 431, 539 P2d 1157 (1975)

Business is not “independently es­tab­lished” or “customarily” engaged in if continued existence of business is dependent upon continuing rela­tionship with single employer. Europorama, Inc. v. Employ­ment Div., 22 Or App 431, 539 P2d 1157 (1975); Revlon Services, Inc. v. Employ­ment Division, 30 Or App 729, 567 P2d 1072 (1977); Sharp v. Employ­ment Div., 47 Or App 733, 615 P2d 374 (1980)

In determining whether per­son has independently es­tab­lished business, per­son’s invest­ment in business need only be commensurate with quantity and quality of invest­ment necessary for that type of business and need not exceed value of equip­ment used. The Carpet Mill v. Employ­ment Div., 56 Or App 552, 642 P2d 354 (1982); Pam’s Carpet Service v. Employ­ment Div., 61 Or App 96, 656 P2d 340 (1982)

It was error for referee to consider fact that individuals were paid amounts in excess of the min­i­mum unemploy­ment eligibility amount from one employer as sole indicator of economic dependency. The Carpet Mill v. Employ­ment Div., 56 Or App 552, 642 P2d 354 (1982)

Carpet installers’ testimony that they regularly turned down offers to perform services for firms other than peti­tioner and that when they ceased performing services for peti­tioner they were immediately employed with other firms was relevant to whether they were economically dependent on peti­tioner. Pam’s Carpet Service v. Employ­ment Div., 61 Or App 96, 656 P2d 340 (1982)

Whether individual is engaged in independently es­tab­lished business is determined by considera­tion of 12 factors. Combined Transport, Inc. v. Employ­ment Division, 81 Or App 31, 724 P2d 832 (1986), Sup Ct review denied, as modified by 82 Or App 127, 727 P2d 979 (1986)

It was error to presume that service performed for remunera­tion and not falling under exemp­tion was employ­ment without first determining whether service was performed for employer as defined under ORS 657.025 (Employer). Employ­ment Division v. Peddicord, 125 Or App 113, 865 P2d 384 (1993)

Exemp­tion is available either by meeting independent contractor defini­tion of ORS 670.600 (Independent contractor defined) or by meeting both require­ment of freedom from direc­tion and control and require­ment of engage­ment in independent business. Petersen v. Employ­ment Dept., 135 Or App 344, 898 P2d 210 (1995)

Law Review Cita­tions

31 WLR 647 (1995)

Chapter 657

Notes of Decisions

An individual who performs services for remunera­tion is an employee, and per­son or organiza­tion for whom services are performed is an employer under terms of Employ­ment Division Law even if remunera­tion is paid indirectly rather than directly unless employer shows that some statutory exclusion applies. Lectro Lift, Inc. v. Morgan, 14 Or App 316, 513 P2d 526 (1973)

Mere act of incorporating as professional corpora­tion does not, by itself, create employer-employee rela­tionship for purposes of this chapter. Peterson v. Employ­ment Division, 82 Or App 371, 728 P2d 95 (1986)

Determina­tion of whether claimant is qualified for benefits is made by reference to ORS 657.150 (Amount of benefits) and 657.155 (Benefit eligibility conditions), which require determina­tion of amount of work that claimant performed in “employ­ment” as defined in ORS chapter 657, which, in turn means that exclusions from “employ­ment” set out in ORS 657.040 (Employment) through 657.094 (Employment) must be considered. May Trucking Co. v. Employ­ment Dept., 251 Or App 555, 284 P3d 553 (2012)

Atty. Gen. Opinions

Determining employer of musicians’ group, (1972) Vol 35, p 1306

1 Legislative Counsel Committee, CHAPTER 657—Unemployment Insurance, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors657.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 657, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano657.­html (2017) (last ac­cessed Mar. 30, 2018).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.