According to the IRS, if a privately hired / independent caregiver is paid more than $2,100 per year (in 2019), they are considered a household employee, not an independent contractor. In Oregon, there’s no single, all-encompassing business license issued by the state. You’ll instead need to secure a variety of licenses and permits based on multiple factors, including your business’s location and type. That means you won’t need a sales tax permit to sell most goods and services, such as clothing or electronics. However, certain cities may have their own taxes on specific items like lodging or meals. If you plan to run a business in a regulated field like healthcare, law, or accounting, you’ll need a specialized license.
The Oregon Court of Appeals has released an opinion highlighting how restrictively and strictly it interprets the state’s independent contractor statute. While it may seem hiring an employee always costs more, keep in mind contractors pay their own taxes and benefits. If you only need a few projects done, a contractor is still less expensive. It is important to determine whether you will be classified as an employee or contractor to avoid costly misclassification.
In Gresham all businesses operating in the City limits need a business license, including commercial businesses, home-based businesses, and independent contractors. Most states don’t require you to have a business license as a contractor, but laws vary by city and county. The Oregon Construction Contractors Board requires all applicants to pay a $250 registration fee which covers you for two years. You can contact the Oregon Secretary of State’s office for more information about licenses.
Yes, you need an Oregon contractor license to perform contracting work for compensation.
The Oregon Construction Contractors Board (CCB) requires a $250 registration fee which covers you for two years.
Here are the steps to get an Oregon contractor license:
-
Complete 16 hours of pre-license education and training on business practices and law. You need a 70% score to pass.
-
Pass the license exam based on your education and coursework.
-
Get licensed as an independent contractor or employee of a construction company. You must be at least 18 years old.
-
Determine the type of structures you’ll work on, as that affects your endorsement type.
-
Purchase a surety bond and obtain proof of workers’ compensation insurance if you’ll have employees.
-
Fill out the license application form, pay the $325 fee for a two-year license, and provide your tax numbers.
-
If you passed the NASCLA Accredited Exam, provide your transcript instead of pre-license training.
You’ll need both insurance and a surety bond for your contractor license application. The surety bond promises you’ll follow Oregon’s regulations.
A handyman can clean gutters, power wash sidewalks, and clear debris without a license. But they need a license for plumbing, electrical work, roofing, siding, painting, carpentry, concrete work, HVAC work, and more.
An independent contractor is self-employed, provides services to multiple clients, and is responsible for their own taxes and benefits. An employee works solely for one employer, who dictates their work and provides a set salary or hourly wage, taxes, insurance, and other benefits.
Oregon has specific guidelines on what makes someone an independent contractor. The key factors are being free from direction and control over their work, having an independent business location and licenses, and being responsible for their own equipment and helpers. Employees do not meet these criteria.
Misclassifying a worker brings penalties like fines, back taxes, and reimbursements. Use business contracts to establish clear terms for both parties.
Independent contractors enjoy flexibility but lack employee protections and benefits. Employees receive legally required benefits but have less flexibility. They are taxed differently as well.
Key Differences
-
Independent Contractor:
- Self-employed
- Multiple clients
- Flexible schedule
- Owns equipment
- No benefits
-
Employee:
- Works for one employer
- Dictated schedule
- Employer provides equipment
- Gets benefits
So what’s the main difference? Employees have wages, benefits, and protections dictated by the employer. Contractors are self-employed business owners who serve multiple clients.