If you have a business in Oregon and you have employees you probably need to have workers’ compensation insurance. Workers’ compensation insurance will provide your employees with medical treatment, payment for time lost, and disability if they suffer a work-related injury or illness. And workers’ compensation insurance protects you as the employer from lawsuits filed by employees.
According to the Oregon Workers Compensation Division, if you are in charge of the worker and you have the right to direct and control how the work is done, that worker is generally considered an employee for workers’ compensation purposes. Generally, if you have one or more employees in Oregon, you are required to carry workers’ compensation insurance.
But there are some exceptions and certain people who work for your business do not have to be covered by workers’ compensation insurance. If you are a sole proprietor you are not required to have workers’ compensation for yourself. And partners who have the right to make business decisions do not have to be covered. In the construction industry, the exemption for partners is limited to two partners, unless all the partners are family members.
Corporate officers who are on the board of directors and own at least 10% of the stock do not have to be covered, but in incorporated construction companies only two corporate officers can be exempt. Family-run construction companies can exempt an additional number of officers. And there are some exceptions for family-run farm and timber businesses.
Members of limited liability companies are generally exempt from the workers’ compensation insurance requirement, regardless of their share of ownership. In a limited liability company in the construction business, if all the members are from the same family, they are exempt. Otherwise only two members, or one member for each 10 employees can be exempt.
If your total payroll for any 30-day period is less than $500, your workers are considered casual and do not have to be covered by workers’ compensation insurance. Also, people who work in a private residence, doing cleaning, gardening or maintenance, or providing health care do not have to be covered.
If you have independent contractors who perform services for your business, you are not required to carry worker’s compensation insurance to cover them. But sometimes there is not a clear distinction between employees and independent contractors for workers’ compensation purposes in Oregon.
According to the Oregon Workers’ Compensation Division, the general guidelines that have evolved in the courts for determining whether a worker is an employee or an independent contractor include whether you control or have the right to direct the worker; how the worker is paid, for example by the hour, by the job, by piece, or on a commission basis; who provides the worker’s tools and equipment; and whether you have the right to fire the worker without breach of contract.
If you have employees from out of state who are working temporarily in Oregon, you generally are not required to carry workers’ compensation insurance on them if they are covered by workers’ compensation in their home state.
You can purchase a workers’ compensation insurance policy from any authorized private insurance company in Oregon. If you are unable to obtain coverage through a private insurer, you can use the Oregon Assigned Risk Plan, which is administered by the National Council on Compensation Insurance. This is a risk pool designed to help employers who cannot obtain private insurance due to hazardous occupations or excessive subcontractor exposure, a history of high claim frequency or severity, credit problems, or because the employer is a new business.
Once you have workers’ compensation insurance coverage, you need to be sure that your insurer provides proof of your coverage to the Oregon Workers’ Compensation Division.
Sources:
Assigned Risk Plan, saif Corporation
For employers, Oregon Workers Compensation Division