ORS 656.850: License; compliance with workers’ compensation and safety laws.

(1) As used in this section and ORS 656.018, 656.403, 656.855 and 737.270: (a) “Worker leasing company” means a person who provides workers, by contract and for a fee, to work for a client but does not include a person who provides workers to a client on a temporary basis. (b) “Temporary basis” means providing workers to a client for special situations such as to cover employee absences, employee leaves, professional skill shortages, seasonal workloads and special assignments and projects with the expectation that the position or positions will be terminated upon completion of the special situation. Workers also are provided on a temporary basis if they are provided as probationary new hires with a reasonable expectation of transitioning to permanent employment with the client and the client uses a preestablished probationary period in its overall employment selection program. (c) “Temporary service provider” means a person who provides workers, by contract and for a fee, to a client on a temporary basis. (2) No person shall perform services as a worker leasing company in this state without first having obtained a license therefor from the Director of the Department of Consumer and Business Services. No person required by this section to obtain a license shall fail to comply with this section or ORS 656.855, or any rule adopted pursuant thereto. (3) When a worker leasing company provides workers to a client, the worker leasing company shall satisfy the requirements of ORS 656.017 and 656.407 and provide workers’ compensation coverage for those workers and any subject workers employed by the client unless during the term of the lease arrangement the client has proof of coverage on file with the director that extends coverage to subject workers employed by the client and any workers leased by the client. If the client allows the coverage to expire and continues to employ subject workers or has leased workers, the client shall be considered a noncomplying employer unless the worker leasing company has complied with subsection (5) of this section. (4) When a worker leasing company provides workers for a client, the worker leasing company shall assure that the client provides adequate training, supervision and instruction for those workers to meet the requirements of ORS chapter 654. (5) When a worker leasing company provides subject workers to work for a client and also provides workers’ compensation coverage for those workers, the worker leasing company shall notify the director in writing. The notification shall be given in such manner as the director may prescribe. A worker leasing company may terminate its obligation to provide workers’ compensation coverage for workers provided to a client by giving to the client and the director written notice of the termination. A notice of termination shall state the effective date and hour of the termination, but the termination shall be effective not less than 30 days after the notice is received by the director. Notice to the client under this section shall be given by mail, addressed to the client at the client’s last-known address. If the client is a partnership, notice may be given to any of the partners. If the client is a corporation, notice may be given to any agent or officer of the corporation upon whom legal process may be served. [1993 c.628 §2; 1997 c.491 §4; 2007 c.241 §20] 656.850. (1)(a) A person may not provide services as a professional employer organization (PEO) in this state without first having obtained a license from the Director of the Department of Consumer and Business Services. (b) No person required to obtain a license under this section shall fail to comply with this section or ORS 656.855 or any rule adopted pursuant to such sections. (2)(a) When a PEO enters into a PEO relationship, the PEO shall satisfy the requirements of ORS 656.017 and 656.407 and provide workers’ compensation coverage for all of the client’s covered employees and direct hire employees unless, during the term of the PEO’s agreement with the client, the client has proof of coverage on file with the director. (b) If the client has proof of coverage on file with the director, the client’s coverage shall extend to all of the client’s covered employees and direct hire employees. (c) If the client allows the coverage to expire and continues to employ covered employees or direct hire employees, the client shall be considered a noncomplying employer unless the PEO has complied with subsection (4) of this section. (3) When a PEO enters into a PEO relationship, the PEO shall ensure that the client provides adequate training, supervision and instruction for the client’s covered employees to meet the requirements of ORS chapter 654. (4) If a PEO enters into a PEO relationship and the PEO is responsible for providing workers’ compensation coverage to the client under subsection (2) of this section, the PEO shall: (a) If the PEO is a carrier-insured employer, notify the insurer in writing. The insurer shall file proof of coverage with the director within 30 days after workers’ compensation coverage of the client becomes effective. (b) If the PEO is a self-insured employer, notify the director in writing. (5)(a) A PEO’s responsibility to provide workers’ compensation coverage under subsection (2) of this section shall continue until the earlier of the date on which: (A) The client obtains alternate coverage; or (B) The PEO terminates its responsibility to provide coverage. (b) For purposes of paragraph (a)(A) of this subsection, if a client obtains alternate workers’ compensation coverage, the PEO’s responsibility to provide coverage ends on: (A) The effective date of a policy for which an insurer makes a proof of coverage filing on behalf of the employer; (B) The date on which another PEO becomes responsible for providing coverage to the client; or (C) The date on which the client becomes a self-insured employer. (c) For purposes of paragraph (a)(B) of this subsection: (A) A PEO may terminate its responsibility to provide coverage by giving written notice of the termination to: (i) If the PEO is a carrier-insured employer, the client, the director and the insurer. The insurer shall file notice of termination with the director within 10 calendar days after the effective date of the termination or the date on which the insurer receives notice from the PEO, whichever is later. (ii) If the PEO is a self-insured employer, the client and the director. (B) Unless a later date is specified, the termination shall become effective at 12 midnight on the 30th day after the date on which the notice is received by: (i) An authorized representative of the insurer; or (ii) If the PEO is a self-insured employer, the director. (6) When a PEO satisfies its responsibility to provide workers’ compensation coverage to a client under subsection (2) of this section by obtaining a workers’ compensation insurance policy, coverage of the client under the policy shall continue until: (a) The PEO’s coverage under the policy ends under ORS 656.419 (4); or (b) The PEO’s responsibility to provide workers’ compensation coverage ends under subsection (5) of this section. (7)(a) A PEO shall submit reports to the director that list: (A) All clients with which the PEO has entered into a PEO relationship; (B) Each client to which the PEO provides workers’ compensation coverage; and (C) The date on which the coverage begins. (b) The director shall prescribe the interval and form of these reports by rule. (8) The director may adopt any rules necessary for the implementation of this section, including but not limited to: (a) Prescribing the form and content of notices required under this section, including requiring electronic transmission and filing; and (b) Requiring insurers that provide coverage to PEOs to do so on a multiple coordinated policy or other basis. (9)(a) Notice to the client under this section shall be given by mail, addressed to the client at the client’s last-known address. (b) If the client is a partnership, notice may be given to any of the partners. (c) If the client is a corporation, notice may be given to any agent or officer of the corporation upon whom legal process may be served. (d) If the client is a limited liability company, notice may be given to any manager. (e) If the client is a member-managed limited liability company, notice may be given to any member.