Although Tel-Law information is periodically reviewed, it is important for you to realize that changes may occur in this area of law. This information is not intended to be legal advice regarding your particular problem, and it is not intended to replace the work of an attorney.

If you do not have an attorney, the Oregon State Bar Lawyer Referral Service can help you. Online Lawyer Referral Service information and a fill-in form is available. Or you may contact the service by phone: The number to call from the Portland area is 503-684-3763 or toll-free from anywhere else in Oregon, 1-800-452-7636.

The following information regarding workers' compensation is brought to you as a public service by the lawyers of the State of Oregon. The material presented is general legal information intended to alert you to possible legal problems and solutions.

If you are an employer employing one or more subject workers in the state of Oregon, you must provide workers' compensation coverage for your employees.

Almost all employees must be provided with insurance coverage. There are some exceptions, such as domestic servants, persons doing gardening, maintenance and repair work on private homes, some casual workers, sole proprietors, partners and officers of corporations, newspaper carriers, amateur athletes, and persons who own or have a leasehold interest in and operate motor vehicles carrying logs, rocks, gravel, sand or asphalt. But these exceptions are narrow and have been qualified by court decisions. You should consult a workers' compensation lawyer before assuming that your employees or even subcontractors are exempt. Do not assume that a written independent contractor's agreement insulates you. If the independent contractor fails to obtain coverage for its employees, you could be held ultimately liable for any injuries to its employees. What's more, the legal test for independent contractor status is very strict.

To obtain coverage, you may purchase workers' compensation insurance from any qualified commercial insurance company, the State Accident Insurance Fund Corporation known as SAIF, or, if you meet certain rigid requirements, you may provide your own coverage as a self-insured employer. Generally, a small business will have insufficient assets to qualify as a self-insured employer. If you are unable to obtain coverage from an insurance company or SAIF, you may obtain coverage through the Oregon Assigned Risk Pool, managed by the National Council on Compensation Insurance.

If you have workers' compensation, in most cases your employees injured on the job cannot sue you in a civil court for injuries resulting from your negligence as an employer. The workers' sole rights are to obtain benefits provided by workers' compensation insurance.

If you neglect to obtain workers' compensation insurance for your employees, you will be what is called a "subject and non-complying employer." Notwithstanding your failure to obtain insurance, your employees injured on the job will still receive workers' compensation insurance benefits. The Workers' Compensation Division, an agency of the state of Oregon, will provide workers' compensation insurance benefits to your employees, but you will be obligated to reimburse the department for all claim costs and a penalty. Since an injured worker is entitled to the following benefits, claims costs may be substantial:

1. payment of a portion of his or her wages while unable to work,
2. payment of medical bills,
3. vocational assistance and retraining costs, and
4. payment of permanent disability and death benefits that may arise out of the injury.

All benefits will be processed by SAIF or another private insurer for the Workers' Compensation Division and charged against you along with a percentage processing fee (of around 20%) and a penalty. The charge against your business cannot be blocked by any corporate structure. The charge will be reduced to a lien and collected as a tax that pierces corporate structure and passes through to individual officers and directors as personal liability. Moreover, such liens are not dischargeable in bankruptcy.

Additionally, if you are a subject and non-complying employer, the injured worker may be able to sue you in a civil suit for his or her injuries. In such a suit, you will be prohibited from asserting certain key defenses. A successful suit may result in a substantial monetary judgment entered against you.

If a worker makes a claim against you for workers' compensation benefits, you must file that claim with your insurance company within five days. You must accept the claim form, even though you may feel the claim is not justified. If you object to a claim, share that information with your insurer when you file the claim. If you fail to file the claim, you may be required to pay a penalty and the claimant's attorneys' fees.

If you have workers' compensation insurance, and an injured worker files a request for a hearing to obtain additional benefits or some other relief, you will be defended by an attorney hired by your insurance carrier.

If you are dissatisfied with any action taken against you, you may request a hearing by writing a timely letter to the Workers' Compensation Board, Hearings Division, 2601 25th Street SE, Suite 150, Salem, OR 97302-1282.
Naturally, you must pay for the insurance you purchase. Your premiums will depend on the type of employees you have (how hazardous is the job), your payroll, and your own experience in providing a safe (or dangerous) work environment. Additionally, different insurance companies may offer different plans for payment of premiums.

For example, carpenters are subject to a higher rate of classification than librarians because carpentry is a more hazardous occupation. If two new employers hire carpenters for the same salary, they probably will pay the same premium in the first year. Thereafter, if one employer can demonstrate through actual experience that his carpenters have fewer injuries on the job, his or her net premiums in the future periods probably will be lower.

When selecting an insurance company, you should examine such factors as:

- What type of payment plans are available?
- How efficiently does the company manage its claims?
- What type of legal services does the company provide its insured?
- What assistance will the company provide to help you improve the safety of your work environment?

This information is from the Oregon State Bar's Tel-law service, a collection of recorded legal information messages prepared by the lawyers of Oregon. In addition to being online, the Tel-law service is accessible by telephone at 503-620-3000 or toll-free in Oregon only, 1-800-452-4776. A touch tone phone allows direct access 24 hours a day, 7 days a week. To receive a free Tel-law brochure listing the subjects available call 503-620-0222, ext. 0.