Either the worker leasing company (professional employer organization/PEO) or the client may provide the workers’ compensation coverage for the client. In either case, the policy must cover all of the client’s subject workers (leased and non-leased).
When the PEO provides the coverage for the client
The PEO arranges coverage with its insurer for the client’s leased and non-leased workers. Bulletin 273 describes reporting requirements for worker leasing companies. The PEO is responsible to establish proof of coverage for all leased and non-leased workers of the client, following the steps below.
- Step 1: File a Worker Leasing Notice (Form 2465) with the Workers’ Compensation Division and the PEO’s insurer within 30 days of the effective date of the lease arrangement or contract.
- Step 2: File an Worker Leasing Update Notice (Form 3270) with the division when there are changes to any information on the Worker Leasing Notice.
- Step 3: File a Worker Leasing Termination Notice (Form 3271) with the division to terminate the obligation to provide the client’s workers’ compensation coverage. This notice must also be sent to the client and the PEO’s insurer. IMPORTANT: Claims liability continues for 30 days from the date the division receives the Termination Notice.
If a PEO submits a Termination Notice in error, a Worker Leasing Reinstatement Notice (Form 5361) must be filed to rescind the Termination Notice, and reinstate proof of coverage under the prior Worker Leasing Notice.
When the client provides the coverage
The client buys the coverage directly from an insurer, and the insurer electronically files the client’s proof of coverage. The client must be the primary named insured, and the policy must cover all of the client’s subject workers (leased and non-leased). A Worker Leasing Notice is not required.
Tracking client experience rating
Under Oregon law, the experience rating for the PEO’s direct, non-leased workers and each Oregon client employer’s workers (leased and non-leased) must be separately tracked. If the PEO provides the workers’ compensation coverage for the client, the premium charged to the PEO for each client’s exposure must be based on each client’s own experience rating modification. The PEO will develop a separate experience rating for its direct, non-leased personnel.
Data reporting flowchart