Corporate directors are not employees after all

Almost exactly a year after we reported the Court of Appeals’ decision that payments to corporate directors are "wages" for the purpose of unemployment taxation, the Oregon Supreme Court reversed that decision. The Supreme Court held "that the legislature did not intend to include corporate directors, serving solely as directors, within the statutory definition of an ‘employee’ of a corporation for purposes of the unemployment tax, because directors are not ‘employed by’ the corporation in the same sense as other persons who provide ‘service for an employer*** for remuneration.’" The ruling brings Oregon law in line with federal tax law, under which directors serving in their capacity as directors are not "employees" and payments to directors are not wages for unemployment tax purposes.

You can access the Supreme Court’s Decision in Necanicum Investment Co. v. Employment Department here. To view our earlier report on the Court of Appeals decision, go here.