Oregon Administrative Rules
Chapter 471 - EMPLOYMENT DEPARTMENT
Division 31 - UNEMPLOYMENT INSURANCE TAXES
Section 471-031-0181 - Independent Contractor
Universal Citation: OR Admin Rules 471-031-0181
Current through Register Vol. 63, No. 9, September 1, 2024
(1) Purpose of Rule. The Landscape Contractors Board, Department of Revenue, Department of Consumer and Business Services, Employment Department, and Construction Contractors Board must adopt rules together to carry out ORS 670.600. ORS 670.600 defines "independent contractor" for purposes of the programs administered by these agencies. This rule is intended to ensure that all five agencies apply and interpret 670.600 in a consistent manner; to clarify the meaning of terms used in 670.600; and, to the extent possible, to enable interested persons to understand how all five agencies will apply 670.600.
(2) Statutory Context.
(a) ORS
670.600 generally establishes
three requirements for "independent contractors." One requirement is that an
"independent contractor" must be engaged in an "independently established
business." Another requirement is related to licenses and certificates that are
required for an "independent contractor" to provide services. A third
requirement is that an "independent contractor" must be "free from direction
and control over the means and manner" of providing services to
others.
(b) The specific focus of
this rule is the "direction and control" requirement. See ORS
670.600 for the requirements of
the "independently established business" test and for licensing and
certification requirements.
(3) Direction and Control Test.
(a) ORS
670.600 states that an
"independent contractor" must be "free from direction and control over the
means and manner" of providing services to others. The agencies that have
adopted this rule will use the following definitions in their interpretation
and application of the "direction and control" test:
(A) "Means" are resources used or needed in
performing services. To be free from direction and control over the means of
providing services an independent contractor must determine which resources to
use in order to perform the work, and how to use those resources. Depending
upon the nature of the business, examples of the "means" used in performing
services include such things as tools or equipment, labor, devices, plans,
materials, licenses, property, work location, and assets, among other
things.
(B) "Manner" is the method
by which services are performed. To be free from direction and control over the
manner of providing services an independent contractor must determine how to
perform the work. Depending upon the nature of the business, examples of the
"manner" by which services are performed include such things as work schedules,
and work processes and procedures, among other things.
(C) "Free from direction and control" means
that the independent contractor is free from the right of another person to
control the means or manner by which the independent contractor provides
services. If the person for whom services are provided has the right to control
the means or manner of providing the services, it does not matter whether that
person actually exercises the right of control.
(b) Right to specify results to be achieved.
Specifying the final desired results of the contractor's services does not
constitute direction and control over the means or manner of providing those
services.
(4) Application of "direction and control" test in construction and landscape industries:
(a) The provisions of this
section apply to:
(A) Architects licensed
under ORS 671.010 to
671.220;
(B) Landscape architects licensed under ORS
671.310 to 671.479;
(C) Landscaping businesses licensed under ORS
671.510 to
671.710;
(D) Engineers licensed under ORS
672.002 to
672.325; and
(E) Construction contractors licensed under
ORS Chapter 701.
(b) A
licensee described in (6)(a), that is paying for the services of a
subcontractor in connection with a construction or landscape project, will not
be considered to be exercising direction or control over the means or manner by
which the subcontractor is performing work when the following circumstances
apply:
(A) The licensee specifies the desired
results of the subcontractor's services by providing plans, drawings, or
specifications that are necessary for the project to be completed.
(B) The licensee specifies the desired
results of the subcontractor's services by specifying the materials, appliances
or plants by type, size, color, quality, manufacturer, grower, or price, which
materials, appliances or plants are necessary for the project to be
completed.
(C) When specified by
the licensee's customer or in a general contract, plans, or drawings and in
order to specify the desired results of the subcontractor's services, the
licensee provides materials, appliances, or plants, including, but not limited
to, roofing materials, framing materials, finishing materials, stoves, ovens,
refrigerators, dishwashers, air conditioning units, heating units, sod and seed
for lawns, shrubs, vines, trees, or nursery stock, which are to be installed by
subcontractors in the performance of their work, and which are necessary for
the project to be completed.
(D)
The licensee provides, but does not require the use of, equipment (such as
scaffolding or fork lifts) at the job site, which equipment is available for
use on that job site only, by all or a significant number of subcontractors
requiring such equipment.
(E) The
licensee has the right to determine, or does determine, in what sequence
subcontractors will perform work on a project, the total amount of time
available for performing the work, or the start or end dates for subcontractors
working on a project.
(F) The
licensee reserves the right to change, or does change, in what sequence
subcontractors will perform work on a project, the total amount of time
available for performing the work, or the start or end dates for subcontractors
working on a project.
Stat. Auth: ORS 657.610
Stats. Implemented: ORS 657.040, 670.600, 670.605, 671.010 - 657.710, 672.002 - 672.325,701
Disclaimer: These regulations may not be the most recent version. Oregon may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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