Oregon Supreme Court: Corporate Directors Not Employees
The Oregon Supreme Court recently ruled that a corporation's board of directors are not employees, and therefore not subject to Oregon's unemployment tax. In Necanicum Investment Co. v. Oregon Employment Department, the Supreme Court reversed a 2007 Oregon Court of Appeals decision that had held unemployment tax should be assessed on the fees paid to the directors. The Supreme Court instead reasoned that because the directors were not acting in the capacity of employees, no employer-employee relationship was formed and therefore there was no basis for the Employment Department to apply the tax.
This decision is good news for corporations who pay fees to their directors; however, many corporate directors act both as directors and also as employees. In those cases, the corporation will still be liable for unemployment taxes on any wages paid to the directors in their roles as employees.
http://www.worldofworklawblog.com/admin/trackback/82231
