| Worker
leasing is an alternative for employers to manage the administrative functions of their
work force. A worker leasing company is commonly known as a professional employer organization
(PEO). Employers enter into an arrangement with a worker leasing company that hires workers,
perhaps even the same workers the employer already had, and leases the workers to the
employer under a contract for a fee. Worker leasing companies take on the responsibility
of payroll, employment taxes, and Workers' Benefit Fund assessments. They may also offer
workers' compensation insurance, retirement options, and medical benefits. |
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Worker leasing companies
must be licensed in Oregon before providing worker leasing services. The licensing
process includes, but is not limited to:
- Submitting a
complete application,
- Providing evidence
of workers' compensation coverage,
- Authorization
from Oregon Corporation Division to conduct business in Oregon,
- Having a representative
in Oregon with a principal place of business for records retention,
- Providing a plan
of operation,
- Providing verification
of tax compliance, and
- Paying the required
licensing fee.
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In a worker leasing arrangement,
the worker leasing company's workers' compensation insurance covers both the provided
workers and any subject workers the client may also have. Workers' compensation coverage
can be maintained by either the worker leasing company or the leasing client, but not
both. An employer can have only one workers' compensation insurer at a time responsible
for injury claims. Worker leasing companies cannot provide coverage for only the
workers they supply to clients, nor can leasing clients provide coverage only for non-leased
workers. If the client company has workers' compensation coverage, the client's coverage
covers all the workers.
Reference: ORS 656.850, OAR 436-050-0400 - 0470
Bulletin 273 - Workers' Compensation Insurance Coverage and Reporting Requirements
for Worker Leasing Companies
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