By Daniel Reynolds, Litigation, & Garrett Urrutia, Employment Law & Litigation
Recent amendments to Oregon’s child support statutes may impact home builders and contractors. Previously, employers were required to report newly hired employees to the Oregon Child Support Program. This information is used by the Department of Justice to monitor and collect child support payments.
Effective January 1, 2024, the reporting requirement was expanded to include independent contractors, in certain situations. Since subcontractors are typically considered independent contractors, it is important for contractors to understand when this new legislation applies to their projects.
Who is an “independent contractor” under this rule?
An independent contractor is “an individual who must file a federal form W-9” and “who is anticipated to be performing services for more than 20 days.”
Based on this definition, an independent contractor is not an entity such as a corporation or limited liability company. In other words, general contractors are not required to provide reports for the employees of a subcontractor entity that is engaged by the contractor. The reporting requirement covers individuals and not entities.
It is unclear, however, whether the reporting obligation extends to sole proprietorships. A sole proprietor may operate without employees and submit a federal form W-9 with their Social Security number, instead of an Employer Identification Number. In that case, the sole proprietor may meet the definition of an independent contractor who is subject to this reporting requirement. Until there is further guidance from the Department of Justice, the conservative approach is for contractors to submit the report for any sole proprietor that does not have employees and is anticipated to personally perform services for more than 20 days.
Contractors should ensure they know the legal structure or status of each subcontractor they engage for the project. A subcontractor may operate under an “assumed business name” and still be an individual independent contractor that is covered by this rule.
Contractors should also be mindful of situations where they engage an individual to serve as an independent contractor for more than one project. Even if the duration of each project is only a few days, the independent contractor is still covered by this rule if the total engagement is anticipated to exceed 20 days.
What must be reported to the Oregon Child Support Program?
The report must contain the independent contractor’s (1) name; (2) address; and (3) Social Security number.
When is the report due?
The report is due no later than 20 days after the date the employer engages or reengages the independent contractor. To “reengage” an independent contractor means to engage an individual who previously performed services as an independent contractor but has not performed services in the past 60 days.
Where is the report made?
The report can be submitted through the Oregon Employer Services Portal, which is available at www.oregonchildsupport.gov/employers. Employers can also submit the completed form by fax or mail to the Oregon Child Support Program.
While this change does not implicate all construction projects, it may impose additional reporting requirements for projects that involve individual tradespersons and subcontractors. Contractors that subcontract work to individual independent contractors must ensure their recordkeeping and reporting procedures comply with the Oregon Child Support Program.
Dan Reynolds is a partner in the Litigation practice group, and Garrett Urrutia is an associate attorney in the Employment Law & Litigation practice group.
The information in this article is not intended to provide legal advice. For professional consultation, please contact Saalfeld Griggs PC at (503) 399-1070 or visit www.sglaw.com. © 2024 Saalfeld Griggs PC