An Oregon lawmaker wants to change the way independent contractors are defined in state law. It may seem like a small tweak, but it could have a big impact.
Rep. Paul Holvey, D-Eugene, wants to add language to the existing statute to change the way the state decides who is classified as an independent contractor instead of an employee. Unlike contractors, employees are entitled to tax withholdings, worker’s compensation and other benefits.
Right now, Oregon law lays out five requirements for independent contractors and a worker is classified as an independent contractor if they meet three of those requirements. The requirements include that the person maintains a business location that is separate from the person who is hiring them, that they provide contracted services for two or more different clients per year, and that they have the authority to hire and fire their own subcontractors.
This bill would add to that list of criteria that a person does not do the same type of work that the business’s employees already do.
“This is one very, very complicated bill,” Associated Oregon Loggers executive vice president Jim Geisinger told OPB’s “Think Out Loud.” “And our concern is if implemented as currently written, it would have unintended consequences throughout many industries and many businesses in Oregon.”
Geisinger explained that while many landowners have their own logging and land management crews, they also depend on independent contractors to take some of that same work.
But Holvey said that the bill would clearly define lines between contractors and employees.
“This bill is about providing some more clarity,” he told OPB’s “Think Out Loud.” “If a company is pretty much following the law now, this provision shouldn’t by itself flip the entire course of their business structure.”
The change is being championed by labor groups, who see it as a way to crack down on misclassification — treating people like contractors when they should get the benefits of employment. But plenty of independent contractors say this could destroy their professional lives.
“We’re going to throw the baby out with the bath water if we keep going down this road. Let’s fine tune this and create some precision in identifying what the problem is and then solve that problem,” Geisinger urged.
The bill has already been amended to clarify that the change would not be a hard-and-fast rule. Instead, it would add to the list of factors considered for classifying workers as either independent contractors or employees. Holvey indicated that further clarification is coming.
“We have another amendment in process largely because this bill is not aimed at real estate brokers, hairdressers, massage therapists, insurance agents … the bill should not impact the current legal status of those entities in terms of their classification of the workforce,” he said.