Payments to corporate directors are subject to unemployment tax, Court of Appeals holds

By Lori Irish Bauman
August 1, 2007

The Oregon Court of Appeals ruled today that a corporation's payments to members of its board of directors constitute "wages" for "employment" under ORS Chapter 657, and thus are subject to state unemployment taxes.  In that chapter, the legislature chose to define the term "employment" as any service for an employer that is performed for remuneration.  This broad definition brings corporate directors within the scope of the unemployment insurance system.  The court cautioned that its holding Necanicum Investment Co. v. Employment Department does not mean that directors are deemed "employees" for any other purpose.


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