Oregon law requires the worker leasing company (professional employer organization/PEO) and all of the PEO’s Oregon clients to have workers’ compensation insurance. The PEO must maintain coverage even if the PEO has no non-leased administrative staff in the state and all clients carry their own coverage.
A PEO cannot provide workers’ compensation coverage for another PEO doing business in Oregon, whether or not the companies are licensed to lease workers in Oregon.
Coverage for the leased employees may be provided under only one of the following options:
- A client’s workers’ compensation insurance policy
- A self-insured employer
- A PEO’s workers’ compensation insurance policy
Whether the PEO or client provides the coverage, the policy must cover all employees of the client, both leased and non-leased.
If the PEO provides the coverage, a single policy must be written that covers both the PEO and the client. The insurance premium for the client’s exposure must be based on the client’s own experience rating. This is in the same manner as required for employers insuring directly employed workers.
If the client has purchased its own policy or is a certified self-insured employer, coverage for both leased and non-leased employees of the client automatically defaults to the client’s coverage, regardless of any coverage the PEO may provide to the client.
Data reporting requirements
Guidance for policy issuance, premium determination, and reporting requirements for PEOs can be found in the National Council of Compensation Insurance (NCCI) Basic Manual for Workers’ Compensation Employers’ Liability Insurance at www.ncci.com. (See Oregon state exceptions to Rule 3-D.)
To help better understand the requirements, look at this Data Reporting Flowchart or call one of Oregon’s Worker Leasing Program staff members.