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Committee hears bill to update Oregon law for professional employer organizations
Summary
House Bill 2,800 would replace the term "worker leasing company" with "professional employer organization" (PEO), clarify co-employment definitions, modernize reporting via electronic data interchange and preserve exclusive-remedy protections for PEOs and their client employers.
MADAM CHAIR GRABER — The House Committee on Labor and Workplace Standards heard testimony on House Bill 2,800 on Feb. 23, a measure drafted by the workers' compensation division that updates statutes governing worker leasing companies and moves the state to use the term "professional employer organization," or PEO.
The bill updates definitions in ORS chapter 656 to reflect current industry practice, clarifies the distinction between PEOs and temporary staffing providers, and modernizes reporting so insurers can report client coverage electronically via EDI rather than on a separate form-based process. "Worker leasing companies are more commonly known as professional employer organizations or PEOs," Matt West, interim administrator of the workers' compensation division, told the committee.
Why it matters: Testimony said the 1993 statute's language no longer matches industry practice and can increase the risk of disputes over coverage and licensing. The bill would replace the phrase "worker leasing company" with "professional employer organization" in statute, adopt a model definition used by other states and authorize rulemaking on how insurers write policies to cover PEO clients. Anne Donovan, president of Zenium and leadership council chair of Oregon's NAPEO working group, said the industry serves more than 3,000 Oregon small businesses and more than 31,000 employees and supported the bill as a technical modernization.
Key details: The measure would allow the division to accept client coverage data from insurers via EDI, to explore a multiple coordinated policy model so each client receives its own policy, and to share coverage data with insurers to reduce claims-processing confusion. The bill keeps existing licensing and accountability requirements and preserves exclusive-remedy protections for PEOs and their client employers; the division told the committee the bill does not change those protections but only updates terminology (ORS 656.618 referenced for exclusive-remedy language).
Support and process: Industry witnesses said the division consulted stakeholders during drafting and a dash-1 amendment was filed to address recent drafting questions. The Workers' Compensation Management Labor Advisory Committee (MLAC) is reviewing the bill and the amendment, and the division expected MLAC advice before further committee action.
Ending note: The committee closed the public hearing on HB 2,800 on Feb. 23; members did not vote on the measure during the session. Stakeholders said they expect continued technical adjustments through MLAC and rulemaking if the bill advances.
