Oregon Construction Contractors (CCB) Practice Test

BOLI applies the "economic realities" test to determine what?

1. If an individual is an employee or a business

2. If a contractor has insurance

3. If a project complies with building codes

4. If a business is profitable

The correct answer is: If an individual is an employee or a business

The "economic realities" test is a legal standard used to determine whether an individual should be classified as an employee or an independent contractor. This test focuses on the actual economic relationship between the parties involved, examining various factors such as the level of control over the work performed, how the worker is paid, whether the work is integral to the business, and the opportunity for profit or loss. In the context of Oregon construction regulations, this classification is crucial because it dictates not only tax obligations but also rights to benefits such as workers' compensation and unemployment insurance. Understanding this distinction helps protect workers and ensure compliance with labor laws. The other options do not relate to the application of the "economic realities" test. Determining a contractor's insurance status, assessing compliance with building codes, or evaluating a business's profitability involves different legal or financial criteria and processes that are separate from the question of employment classification.