Contractor VS Employee

Individuals who are hired and compensated for services are employees. Their compensation earned for services are taxable unless specifically excluded by law.
           Generally, Oregon law requires employers to withhold and pay income taxes from employee wages along with unemployment and workers' compensation. Also, employers may be subject to TriMet or Lane Transit District payroll taxes. Transit payroll taxes are employer paid and based on the gross payroll paid employees within the TriMet or Lane Transit districts.
 

Individuals who meet the statutory definition of an independent contractor are not employees and their compensation earned for services are not subject to withholding or transit payroll taxes. The Oregon Revised Statute (ORS) defining an independent contractor lists specific criteria that an individual must meet to be considered an independent contractor. Individuals who do not meet ALL of the standards are employees and their compensation earned for services are subject to withholding and transit payroll taxes.

Per the State of Oregon Website

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Employee v.s. Contractor