All Roll Calls
Yes: 94 • No: 0
OregonHB 28002025 Regular SessionHouse
Relating to professional employer organizations under workers' compensation law; and prescribing an effective date.
Sponsored By: Sponsor information unavailable
Signed by Governor
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Bill Overview
Analyzed Economic Effects
11 provisions identified: 4 benefits, 5 costs, 2 mixed.
Covered workers lose state scheduling protections
Workers defined as covered employees under this law are excluded from Oregon’s specified scheduling protections. The exclusion applies to covered employees, not every worker in retail, hospitality, or food services.
Injured workers face limits on lawsuits
A professional employer organization and its client receive the employer liability shield when both follow workers’ compensation coverage requirements. This can limit an injured worker’s ability to seek damages outside workers’ compensation. Legal exceptions remain for specified cases involving willful aggression, lack of a common enterprise, or failures to post required notices. Exceptions also remain for negligence outside the role protected by the shield.
Construction firms must change license class
Construction sole proprietorships, partnerships, corporations, and limited liability companies with professional employer organization relationships belong in the nonexempt contractor class. Exempt-class licensees entering those relationships must reapply in the correct class and face improper-licensing penalties and sanctions. Entering the relationship while exempt is also grounds for Construction Contractors Board licensing action. Suspension or refusal to renew without a hearing requires a finding of serious danger to public welfare.
Road flagging businesses face licensing requirements
Beginning July 1, 2027, a person using a professional employer organization relationship for construction flaggers counts as a construction flagging contractor. The rule covers paid or expected-to-be-paid traffic control on public roads to prevent or reduce conflicts with construction. These contractors generally need a Construction Contractors Board license before doing, offering, or bidding on flagging work. Exceptions cover valid residential general contractor licenses and level 1 or 2 commercial general or specialty licenses, with required endorsements. Construction flagging license applicants need a $25,000 surety bond and at least $500,000 in general liability insurance.
Equal health plan offers for workers
A professional employer organization (PEO) may offer group health insurance to its clients’ covered employees. If it offers coverage to any, it must offer coverage to all its clients’ covered employees in the same way. The law does not require a PEO to offer a health plan. When the PEO does not offer coverage, the client employer may offer its own plan.
Clearer injury coverage for client workers
A professional employer organization (PEO) must cover its client’s covered employees and direct hires for workers’ compensation. This duty does not apply when the client has proof of coverage for both groups on file with the director. Responsibility continues until alternate coverage begins or the PEO ends its responsibility through written notice. Unless a later date is set, termination takes effect at midnight on day 30 after the required recipient receives notice. That recipient is the insurer’s authorized representative, or the director for a self-insured PEO. Coverage under a PEO policy continues until the policy or the PEO’s responsibility ends. The PEO must notify its insurer, or the director if self-insured, when it takes responsibility for a client’s coverage. Insurers must file proof within 30 days after coverage starts. They must file termination notices within 10 calendar days after termination or receipt of the PEO’s notice, whichever is later. PEOs must also report clients, identify those they cover, and provide coverage start dates on a state-set schedule.
Safety oversight for client employees
A professional employer organization must ensure its client gives covered employees adequate safety training, supervision, and instruction. These steps must meet Oregon workplace safety requirements.
Staffing firms get contractor license exemption
Professional employer organizations and temporary service providers are exempt from contractor licensing when supplying personnel under a licensed contractor’s direction and supervision. The exemption also applies when the provider has a professional employer organization relationship with that contractor. It does not remove the licensed contractor’s responsibility to direct and supervise the work.
Employer service firms need state licenses
Professional employer organizations (PEOs) share agreed employer duties for some or all of a client’s workers. Firms providing only temporary workers or payroll services without employer duties are outside this definition. PEOs must get an Oregon license before providing services, and qualifying self-insured PEOs must follow PEO insurance rules. State licensing rules must cover applications, renewals, license terms, fees, discipline, records, and audits. License fees fund administration; the law does not set their amounts.
Landscape licensing relief requires insurance checks
A landscape business can qualify for the exempt contractor class when a professional employer organization (PEO) covers its covered employees. An exempt business using a PEO or temporary service provider must verify that the provider maintains workers’ compensation insurance. License applicants must give the Oregon State Landscape Contractors Board satisfactory evidence of that check. A PEO client’s covered employee is exempt from the specified landscape licensing requirements when working for a licensed landscape business. The work must be directly supervised by a licensed landscape construction professional.
Client injury records drive insurance premiums
When a licensed professional employer organization (PEO) provides workers’ compensation coverage, each client’s premium uses its own claims record. Premiums can rise or fall based on that record. Insurers must track and report each client’s record separately and may charge the PEO a reasonable fee for doing so. The PEO receives a separate rating for administrative staff it directly employs.
Sponsors & Cosponsors
Sponsors
There is no primary sponsor on record.
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
Senate vote • 5/7/2025
Third reading. Carried by Bonham. Passed.
Yes: 29 • No: 0
Senate vote • 4/29/2025
Labor and Business: Heard and Reported Out
Yes: 5 • No: 0
House vote • 4/10/2025
Third reading. Carried by Boshart Davis. Passed.
Yes: 53 • No: 0
House vote • 3/31/2025
Labor and Workplace Standards: Heard and Reported Out with Amendments
Yes: 7 • No: 0
Actions Timeline
Chapter 78, (2025 Laws): effective on the 91st day following adjournment sine die.
6/6/2025HouseGovernor signed.
5/14/2025HousePresident signed.
5/8/2025SenateSpeaker signed.
5/8/2025HouseThird reading. Carried by Bonham. Passed.
5/7/2025SenateSecond reading.
5/6/2025SenateRecommendation: Do pass the A-Eng. bill.
5/6/2025SenateWork Session held.
4/29/2025SenatePublic Hearing held.
4/24/2025SenateReferred to Labor and Business.
4/10/2025SenateFirst reading. Referred to President's desk.
4/10/2025SenateThird reading. Carried by Boshart Davis. Passed.
4/10/2025HouseRules suspended. Carried over to April 10, 2025 Calendar.
4/9/2025HouseRules suspended. Carried over to April 9, 2025 Calendar.
4/8/2025HouseSecond reading.
4/7/2025HouseRecommendation: Do pass with amendments and be printed A-Engrossed.
4/3/2025HouseWork Session held.
3/31/2025HousePublic Hearing held.
2/3/2025HouseReferred to Labor and Workplace Standards.
1/17/2025HouseFirst reading. Referred to Speaker's desk.
1/13/2025House
Bill Text
HLWS Amendment -3 (Adopted)
3/31/2025
HLWS Amendment -1 (Proposed)
2/3/2025
A-Engrossed
Enrolled
House Amendments to Introduced
Introduced
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