Workers’ compensation in Oregon can be confusing, mainly because our state differs from most others. Under ORS 656.027, certain types of workers, including many independent contractors, are exempt from needing workers’ compensation coverage.

So why do so many Oregon employers still face surprise charges during their audits?

Often, it comes down to missing documentation.
Suppose you can’t show proof that a contractor was classified correctly and either carried their own workers’ compensation insurance or was legally exempt. In that case, the auditor may add their payroll to yours, even if you don’t actually owe it.

How to Avoid Overcharges at Audit Time

Here are simple steps Oregon employers can take:

1. Require proof of workers’ compensation insurance from all outside contractors.

2.  For sole proprietors or independent contractors with no employees:

• Some individuals qualify as non-subject workers under Oregon law and therefore are not required to purchase workers’ compensation insurance.
• These individuals — the sole proprietors/contractors themselves — can request a written confirmation of non-subject status from the Oregon Workers’ Compensation Division (WCD).
• To request this confirmation, the contractor must email wcd.employerinfo@dcbs.oregon.gov.

After receiving the request, the Workers’ Compensation Division will ask the contractor several basic questions and will issue a letter confirming whether that individual is exempt under ORS 656.027.

Employers should keep a copy of that letter in their records for their next audit.

Why This Matters

Unlike many states, Oregon does not issue Certificates of Exemption for independent contractors.
This written confirmation from WCD is the closest equivalent and is often the key documentation auditors look for.

Being proactive helps prevent unexpected audit charges, and ensures you’re only paying for the coverage you actually owe.

EPB&B Is Here to Help

Across the business insurance industry in Oregon, carriers are anticipating continued activity in Employment Practices Liability (EPL) and personal injury claims as workplace dynamics evolve. In 2026, wrongful termination claims are expected to increase, alongside disputes related to diversity and inclusion policies, employee privacy, and workplace conduct.

Additional areas of focus include workplace safety, crisis response, and regulatory compliance. Many organizations are revisiting their Human Resources policies and procedures to ensure consistency, transparency, and legal compliance in how they manage sensitive situations.

Preparedness Steps

To reduce exposure and support employee well-being, Human Resources leaders and business owners should consider the following best practices:

• Visitor Management: Establish a Clear sign-in procedure for all visitors.
  
• Law Enforcement Interaction: If law enforcement representatives arrive on-site, remain calm, courteous, and refer them to your designated company representatives (e.g., Huan Resources, General Counsel, or Ownership).
  
• Access Control: Politely ask visitors to remain in the reception area until authorized personnel arrive. Do not provide access to records or facilities without proper verification or documentation.
  
• Privacy Protection: Refrain from answering questions about employees or operations unless instructed to do so by company leadership.
  
• Documentation: Record the time, date, and nature of any official visits, and promptly notify leadership and legal counsel.
  
• Legal Review: Collaborate with your legal advisors to determine whether any presented documentation requires immediate compliance and to ensure a proper response and record-keeping.
  
• Employee Communication: Clearly post and communicate employee rights and responsibilities. Offer support resources, such as HR check-ins or counseling, in the event of an incident.
  

Having a well-defined workplace response plan helps reduce the risk of claims related to employment practices, workplace violence, false arrest, or personal injury. It also reinforces compliance with both employee privacy laws and lawful enforcement procedures.

How EPB&B Can Help

Our team at EPB&B Insurance partners with businesses to help identify potential exposures within Employment Practices Liability (EPL), General Liability, and Workplace Safety programs. We can help you:

• Review policy language and coverage limitations
  
• Access carrier-provided risk management resources and hotlines
  
• Understand value-added services such as legal guidance, HR support, and crisis response planning.

Oregon’s manufacturing industry continues to evolve, prompting companies to grow, innovate, and remain competitive in an increasingly complex economic landscape. Between rising material costs, extended payment cycles, and ongoing investments in equipment and technology, maintaining a healthy cash flow is critical for long-term success. One tool that can provide valuable stability and flexibility is trade credit.

As a long-time partner to manufacturers across the Pacific Northwest, EPB&B understands the financial pressures facing production facilities, fabricators, distributors, and specialized manufacturers throughout Oregon.

What Is Trade Credit?

Trade credit is an agreement between a buyer and a supplier that allows materials or services to be purchased today, with payment due in 30, 60, or 90 days. For Oregon manufacturers, this means gaining access to raw materials and components, producing finished goods, and selling them before payment deadlines come due.

This built-in delay helps reduce cash flow stress without requiring additional loans or financing.

Trade credit allows manufacturers to:

• Manage working capital more effectively
  
• Strengthen supplier relationships
  
• Maintain production even when cash is tight
  
• Invest in equipment, staffing, and growth opportunities
  

Here’s how trade credit plays a strategic role in Oregon’s manufacturing landscape.

1. Improving Cash Flow Management

Cash flow is the foundation of any successful manufacturing operation. With trade credit, manufacturers can better match outgoing payments with incoming revenue.

For example, if a supplier offers 60-day terms and customers typically pay within 30 days, that creates a 30-day liquidity buffer that can be used to:

• Cover payroll and utilities
  
• Manage overhead
  
• Invest in new capabilities.
  

Key Benefit: Trade credit helps maintain financial stability by avoiding reliance on short-term loans or costly overdrafts.

2. Supporting Production and Supply Chain Continuity

Access to raw materials must remain consistent to avoid production delays. When revenue timing becomes unpredictable, manufacturers risk bottlenecks that can halt operations.

Trade credit reduces that risk by allowing purchases to continue even during tight cash windows, helping Oregon manufacturers stay on schedule—especially during seasonal fluctuations or supply chain disruptions.

Key Benefit: Manufacturers can maintain smooth production, ensuring reliable delivery timelines for customers.

3. Strengthening Supplier Relationships

When suppliers extend trade credit, they’re demonstrating trust. Oregon manufacturers that consistently pay on time build strong, long-term partnerships that can lead to:

• Better pricing
  
• Priority access during shortages
  
• Extended payment terms
  
• Improved negotiation leverage
  

In today’s competitive manufacturing environment, especially when materials are scarce, these advantages are crucial.

Key Benefit: Being a reliable trade credit partner enhances reputation and manufacturing resilience.

4. Enabling Growth and Expansion

When cash isn’t tied up in immediate payments, manufacturers can reinvest in areas that drive business forward, including:

• Automation and digital tools
  
• Facility expansion
  
• Product development
  
• Workforce training
  

Trade credit also contributes to a favorable financial profile, supporting eligibility for future loans, grants, or investment opportunities aligned with Oregon’s manufacturing incentives.

Key Benefit: Trade credit frees capital for strategic growth and innovation.

5. Reducing Reliance on External Borrowing

Traditional lending typically requires time and often incurs interest; however, it also functions as interest-free short-term financing when payments are made within the agreed-upon terms.

For Oregon manufacturers navigating fluctuating material costs or tight delivery deadlines, this flexibility can make a significant difference.

Key Benefit: Less dependence on bank lending, lower borrowing costs, and fewer administrative hurdles.

In a state where manufacturing plays a central role, encompassing everything from wood products and metals to aerospace and high-tech components, cash flow challenges are a constant concern. Trade credit offers a practical and cost-effective means of managing working capital, sustaining production, fostering stronger supplier relationships, and driving sustainable growth.