2015 ORS 670.600¹
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 (Definitions), 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)


1 Legislative Counsel Committee, CHAPTER 670—Occupations and Professions Generally, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors670.­html (2015) (last ac­cessed Jul. 16, 2016).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2015, Chapter 670, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano670.­html (2015) (last ac­cessed Jul. 16, 2016).
 
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.