Oregon Businesses: Are You Getting Overcharged on Your Workers’ Compensation Audit? 

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