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    Linda Repp   
503-947-7665   

Independent contractor vs employee:
The cost of getting it wrong!

Workers' Compensation - If you employ an individual that is determined to be a worker instead of an independent contractor, you are the employer and responsible for providing workers' compensation coverage. Employers that are not in compliance with workers' compensation coverage laws are liable for penalties two times the amount they should have paid in premiums or $1,000, whichever is greater. The penalty for every additional incident of noncompliance is $250 per day for each day of noncompliance with no limit on the total fine. After a third offense, the employer is referred to the Department of Justice to pursue a court ordered injunction. Further violations will result in a contempt of court judgment with possible jail time.

If a subject worker is injured while employed by someone that does not have workers' compensation insurance, the worker may still be eligible for benefits. The claim is referred to an agent for processing. In addition to penalties assessed for noncompliance, the employer must reimburse all claim costs and a claims processing administration fee. There is no protection under a corporation or limited liability company because officers, members, or partners are separately and individually liable for the costs. Furthermore, a noncomplying employer is subject to civil action in addition to workers' compensation benefits if the injured worker files a civil suit. There is no exclusive remedy protection if the employer does not have coverage at the time of injury.

Carrying required workers' compensation insurance is vital to an employer's business. The cost of not doing so can be very high. e for providing workers' compensation coverage. Employers that are out of compliance with workers' compensation law are liable for penalties of two times what they would have paid in premiums or $1,000, whichever is greater. Upon additional occurrences of non-compliance, the penalty is $250 per day for each day out of compliance with no maximum amount which can be assessed. After a third offence, the employer is referred to the Department of Justice to pursue a court ordered injunction. Further violation will result in a contempt of court judgment with possible jail time.

 
 
Additional Resources

What is an independent contractor?

For workers: Common questions and answers

For employers: Common questions and answers

Guidelines for specific industries

 
Oregon Independent Contractors

If you have questions about this webpage, please contact Linda Repp, 503-947-7665.