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OREGON REVISED STATUTES

 

Chapter 656 - Workers’ Compensation

 

2011 EDITION

 

 

 

 

COVERAGE

 

 

      656.023 Who are subject employers. Every employer employing one or more subject workers in the state is subject to this chapter. [1965 c.285 §8]

 

 

      656.027 Who are subject workers. All workers are subject to this chapter except those nonsubject workers described in the following subsections:

      (1) A worker employed as a domestic servant in or about a private home. For the purposes of this subsection “domestic servant” means any worker engaged in household domestic service by private employment contract, including, but not limited to, home health workers.

      (2) A worker employed to do gardening, maintenance, repair, remodeling or similar work in or about the private home of the person employing the worker.

      (3)(a) A worker whose employment is casual and either:

      (A) The employment is not in the course of the trade, business or profession of the employer; or

      (B) The employment is in the course of the trade, business or profession of a nonsubject employer.

      (b) For the purpose of this subsection, “casual” refers only to employments where the work in any 30-day period, without regard to the number of workers employed, involves a total labor cost of less than $500.

      (4) A person for whom a rule of liability for injury or death arising out of and in the course of employment is provided by the laws of the United States.

      (5) A worker engaged in the transportation in interstate commerce of goods, persons or property for hire by rail, water, aircraft or motor vehicle, and whose employer has no fixed place of business in this state.

      (6) Firefighter and police employees of any city having a population of more than 200,000 that provides a disability and retirement system by ordinance or charter.

      (7)(a) Sole proprietors, except those described in paragraph (b) of this subsection. When labor or services are performed under contract, the sole proprietor must qualify as an independent contractor.

      (b) Sole proprietors actively licensed under ORS 671.525 or 701.021. When labor or services are performed under contract for remuneration, notwithstanding ORS 656.005 (30), the sole proprietor must qualify as an independent contractor. Any sole proprietor licensed under ORS 671.525 or 701.021 and involved in activities subject thereto is conclusively presumed to be an independent contractor.

      (8) Except as provided in subsection (23) of this section, partners who are not engaged in work performed in direct connection with the construction, alteration, repair, improvement, moving or demolition of an improvement on real property or appurtenances thereto. When labor or services are performed under contract, the partnership must qualify as an independent contractor.

      (9) Except as provided in subsection (25) of this section, members, including members who are managers, of limited liability companies, regardless of the nature of the work performed. However, members, including members who are managers, of limited liability companies with more than one member, while engaged in work performed in direct connection with the construction, alteration, repair, improvement, moving or demolition of an improvement on real property or appurtenances thereto, are subject workers. When labor or services are performed under contract, the limited liability company must qualify as an independent contractor.

      (10) Except as provided in subsection (24) of this section, corporate officers who are directors of the corporation and who have a substantial ownership interest in the corporation, regardless of the nature of the work performed by such officers, subject to the following limitations:

      (a) If the activities of the corporation are conducted on land that receives farm use tax assessment pursuant to ORS chapter 308A, corporate officer includes all individuals identified as directors in the corporate bylaws, regardless of ownership interest, and who are members of the same family, whether related by blood, marriage or adoption.

      (b) If the activities of the corporation involve the commercial harvest of timber and all officers of the corporation are members of the same family and are parents, daughters or sons, daughters-in-law or sons-in-law or grandchildren, then all such officers may elect to be nonsubject workers. For all other corporations involving the commercial harvest of timber, the maximum number of exempt corporate officers for the corporation shall be whichever is the greater of the following:

      (A) Two corporate officers; or

      (B) One corporate officer for each 10 corporate employees.

      (c) When labor or services are performed under contract, the corporation must qualify as an independent contractor.

      (11) A person performing services primarily for board and lodging received from any religious, charitable or relief organization.

      (12) A newspaper carrier utilized in compliance with the provisions of ORS 656.070 and 656.075.

      (13) A person who has been declared an amateur athlete under the rules of the United States Olympic Committee or the Canadian Olympic Committee and who receives no remuneration for performance of services as an athlete other than board, room, rent, housing, lodging or other reasonable incidental subsistence allowance, or any amateur sports official who is certified by a recognized Oregon or national certifying authority, which requires or provides liability and accident insurance for such officials. A roster of recognized Oregon and national certifying authorities will be maintained by the Department of Consumer and Business Services, from lists of certifying organizations submitted by the Oregon School Activities Association and the Oregon Park and Recreation Society.

      (14) Volunteer personnel participating in the ACTION programs, organized under the Domestic Volunteer Service Act of 1973, P.L. 93-113, known as the Foster Grandparent Program and the Senior Companion Program, whether or not the volunteers receive a stipend or nominal reimbursement for time and travel expenses.

      (15) A person who has an ownership or leasehold interest in equipment and who furnishes, maintains and operates the equipment. As used in this subsection “equipment” means:

      (a) A motor vehicle used in the transportation of logs, poles or piling.

      (b) A motor vehicle used in the transportation of rocks, gravel, sand, dirt or asphalt concrete.

      (c) A motor vehicle used in the transportation of property by a for-hire motor carrier that is required under ORS 825.100 or 825.104 to possess a certificate or permit or to be registered.

      (16) A person engaged in the transportation of the public for recreational down-river boating activities on the waters of this state pursuant to a federal permit when the person furnishes the equipment necessary for the activity. As used in this subsection, “recreational down-river boating activities” means those boating activities for the purpose of recreational fishing, swimming or sightseeing utilizing a float craft with oars or paddles as the primary source of power.

      (17) A person who receives no wage other than ski passes or other noncash remuneration for performing volunteer:

      (a) Ski patrol activities; or

      (b) Ski area program activities sponsored by a ski area operator, as defined in ORS 30.970, or by a nonprofit corporation or organization.

      (18) A person 19 years of age or older who contracts with a newspaper publishing company or independent newspaper dealer or contractor to distribute newspapers to the general public and perform or undertake any necessary or attendant functions related thereto.

      (19) A person performing foster parent or adult foster care duties pursuant to ORS 412.001 to 412.161 and 412.991 or ORS chapter 411, 418, 430 or 443.

      (20) A person performing services on a volunteer basis for a nonprofit, religious, charitable or relief organization, whether or not such person receives meals or lodging or nominal reimbursements or vouchers for meals, lodging or expenses.

      (21) A person performing services under a property tax work-off program established under ORS 310.800.

      (22) A person who performs service as a caddy at a golf course in an established program for the training and supervision of caddies under the direction of a person who is an employee of the golf course.

      (23)(a) Partners who are actively licensed under ORS 671.525 or 701.021 and who have a substantial ownership interest in a partnership. If all partners are members of the same family and are parents, spouses, sisters, brothers, daughters or sons, daughters-in-law or sons-in-law or grandchildren, all such partners may elect to be nonsubject workers. For all other partnerships licensed under ORS 671.510 to 671.760 or 701.021, the maximum number of exempt partners shall be whichever is the greater of the following:

      (A) Two partners; or

      (B) One partner for each 10 partnership employees.

      (b) When labor or services are performed under contract for remuneration, notwithstanding ORS 656.005 (30), the partnership qualifies as an independent contractor. Any partnership licensed under ORS 671.525 or 701.021 and involved in activities subject thereto is conclusively presumed to be an independent contractor.

      (24)(a) Corporate officers who are directors of a corporation actively licensed under ORS 671.525 or 701.021 and who have a substantial ownership interest in the corporation, regardless of the nature of the work performed. If all officers of the corporation are members of the same family and are parents, spouses, sisters, brothers, daughters or sons, daughters-in-law or sons-in-law or grandchildren, all such officers may elect to be nonsubject workers. For all other corporations licensed under ORS 671.510 to 671.760 or 701.021, the maximum number of exempt corporate officers shall be whichever is the greater of the following:

      (A) Two corporate officers; or

      (B) One corporate officer for each 10 corporate employees.

      (b) When labor or services are performed under contract for remuneration, notwithstanding ORS 656.005 (30), the corporation qualifies as an independent contractor. Any corporation licensed under ORS 671.525 or 701.021 and involved in activities subject thereto is conclusively presumed to be an independent contractor.

      (25)(a) Limited liability company members who are members of a company actively licensed under ORS 671.525 or 701.021 and who have a substantial ownership interest in the company, regardless of the nature of the work performed. If all members of the company are members of the same family and are parents, spouses, sisters, brothers, daughters or sons, daughters-in-law or sons-in-law or grandchildren, all such members may elect to be nonsubject workers. For all other companies licensed under ORS 671.510 to 671.760 or 701.021, the maximum number of exempt company members shall be whichever is the greater of the following:

      (A) Two company members; or

      (B) One company member for each 10 company employees.

      (b) When labor or services are performed under contract for remuneration, notwithstanding ORS 656.005 (30), the company qualifies as an independent contractor. Any company licensed under ORS 671.525 or 701.021 and involved in activities subject thereto is conclusively presumed to be an independent contractor.

      (26) A person serving as a referee or assistant referee in a youth or adult recreational soccer match whose services are retained on a match-by-match basis.

      (27) A person performing language translator or interpreter services that are provided for others through an agent or broker.

      (28) A person who operates, and who has an ownership or leasehold interest in, a passenger motor vehicle that is operated as a taxicab or for nonemergency medical transportation. As used in this subsection:

      (a) “Lease” means a contract under which the lessor provides a vehicle to a lessee for consideration.

      (b) “Leasehold” includes, but is not limited to, a lease for a shift or a longer period.

      (c) “Passenger motor vehicle that is operated as a taxicab” means a vehicle that:

      (A) Has a passenger seating capacity that does not exceed seven persons;

      (B) Is transporting persons, property or both on a route that begins or ends in Oregon; and

      (C)(i) Carries passengers for hire when the destination and route traveled may be controlled by a passenger and the fare is calculated on the basis of any combination of an initial fee, distance traveled or waiting time; or

      (ii) Is in use under a contract to provide specific service to a third party to transport designated passengers or to provide errand services to locations selected by the third party.

      (d) “Passenger motor vehicle that is operated for nonemergency medical transportation” means a vehicle that:

      (A) Has a passenger seating capacity that does not exceed seven persons;

      (B) Is transporting persons, property or both on a route that begins or ends in Oregon; and

      (C) Provides medical transportation services under contract with or on behalf of a mass transit or transportation district. [1965 c.285 §9; 1971 c.386 §1; 1977 c.683 §1; 1977 c.817 §2; 1977 c.835 §7; 1979 c.821 §1; 1981 c.225 §1; 1981 c.444 §1; 1981 c.535 §3; 1981 c.839 §1; 1983 c.341 §1; 1983 c.541 §1; 1983 c.579 §3; 1985 c.431 §1; 1985 c.706 §2; 1987 c.94 §168; 1987 c.414 §161; 1987 c.800 §2; 1989 c.762 §4; 1990 c.2 §4; 1991 c.469 §1; 1991 c.707 §1; 1993 c.18 §138a; 1993 c.494 §2; 1993 c.777 §10; 1995 c.93 §32; 1995 c.216 §§3,3a; 1995 c.332 §6; 1997 c.337 §1; 1999 c.314 §91; 1999 c.402 §8; 2001 c.363 §1; 2001 c.765 §4; 2003 c.677 §1; 2005 c.167 §1; 2007 c.465 §6; 2007 c.541 §9; 2007 c.721 §1; 2007 c.836 §49; 2008 c.32 §§2,3]

 

 

SELF-INSURED AND CARRIER-INSURED EMPLOYERS; INSURERS

 

 

      656.403 Obligations of self-insured employer. (1) A self-insured employer directly assumes the responsibility for providing compensation due subject workers and their beneficiaries under this chapter.

      (2) The claims of subject workers and their beneficiaries resulting from injuries while employed by a self-insured employer shall be handled in the manner provided by this chapter. A self-insured employer is subject to the rules of the Director of the Department of Consumer and Business Services with respect to such claims.

      (3) Security deposited by a self-insured employer shall not relieve any such employer from full and primary responsibility for claims administration and payment of compensation under this chapter. This subsection applies to a self-insured employer even though the self-insured employer insures or reinsures all or any portion of risks under this chapter with an insurance company authorized to do business in this state or with any other insurer with whom insurance can be placed or secured pursuant to ORS 744.305 to 744.405 (1985 Replacement Part).

      (4) When a self-insured employer is a worker leasing company required to be licensed pursuant to ORS 656.850 and 656.855, the company also shall comply with the worker leasing company regulatory provisions of ORS chapters 656 and 737 and with such rules as may be adopted pursuant to ORS 656.726 and 731.244 for the supervision and regulation of worker leasing companies. [1975 c.556 §26 (enacted in lieu of 656.401); 1981 c.854 §26; 1993 c.628 §7]

 

 

      656.404 [Repealed by 1959 c.449 §5]

 

 

      656.405 [1965 c.285 §75(1); 1967 c.359 §700; repealed by 1975 c.556 §54]

 

 

      656.406 [Renumbered 656.714]

 

 

      656.407 Qualifications of insured employers; rules. (1) An employer shall establish proof with the Director of the Department of Consumer and Business Services that the employer is qualified either:

      (a) As a carrier-insured employer by causing proof of coverage provided by an insurer to be filed with the director; or

      (b) As a self-insured employer by establishing proof that the employer has an adequate staff qualified to process claims promptly and has the financial ability to make certain the prompt payment of all compensation and other payments that may become due to the director under this chapter.

      (2) Except as provided in subsection (3) of this section, a self-insured employer shall establish proof of financial ability by providing security that the director determines acceptable by rule. The security must be in an amount reasonably sufficient to insure payment of compensation and other payments that may become due to the director but not less than the employer’s normal expected annual claim liabilities and in no event less than $100,000. In arriving at the amount of security required under this subsection, the director may take into consideration the financial ability of the employer to pay compensation and other payments and probable continuity of operation. The security shall be held by the director to secure the payment of compensation for injuries to subject workers of the employer and to secure other payments that may become due from the employer to the director under this chapter. Moneys received as security under this subsection shall be deposited with the State Treasurer in an account separate and distinct from the General Fund. Interest earned by the account shall be credited to the account. The amount of security may be increased or decreased from time to time by the director.

      (3)(a) A city or county that wishes to be exempt from subsection (2) of this section may make written application therefor to the director. The application shall include a copy of the city’s or county’s most recent annual audit as filed with the Secretary of State under ORS 297.405 to 297.740, information regarding the establishment of a loss reserve account for the payment of compensation to injured workers and such other information as the director may require. The director shall approve the application and the city or county shall be exempt from subsection (2) of this section if the director finds that:

      (A) The city or county has been a self-insured employer in compliance with subsection (2) of this section for more than three consecutive years prior to making the application referred to in this subsection as an independently self-insured employer and not as part of a self-insured group.

      (B) The city or county has in effect a loss reserve account:

      (i) That is actuarially sound and that is adequately funded as determined by an annual audit under ORS 297.405 to 297.740 to pay all compensation to injured workers and amounts due the director pursuant to this chapter. A copy of the annual audit shall be filed with the director. Upon a finding that there is probable cause to believe that the loss reserve account is not actuarially sound, the director may require a city or county to obtain an independent actuarial audit of the loss reserve account. The requirements of this subsection are in addition to and not in lieu of any other audit or reporting requirement otherwise prescribed by or pursuant to law.

      (ii) That is dedicated to and may be expended only for the payment of compensation and amounts due the director by the city or county under this chapter.

      (b) The director shall have the first lien and priority right to the full amount of the loss reserve account required to pay the present discounted value of all present and future claims under this chapter.

      (c) The city or county shall notify the director no later than 60 days prior to any action to discontinue the loss reserve account. The city or county shall advise the director of the city’s or county’s plans to submit the security deposits required in subsection (2) of this section, or obtain coverage as a carrier-insured employer prior to the date the loss reserve account ceases to exist. If the city or county elects to discontinue self-insurance, it shall submit such security as the director may require to insure payment of all compensation and amounts due the director for the period the city or county was self-insured.

      (d) In order to requalify as a self-insured employer, the city or county must deposit prior to discontinuance of the loss reserve account such security as is required by the director pursuant to subsection (2) of this section.

      (e) Notwithstanding ORS 656.440, if prior to the date of discontinuance of the loss reserve account the director has not received the security deposits required in subsection (2) of this section, the city’s or county’s certificate of self-insurance is automatically revoked as of that date. [1975 c.556 §27; 1979 c.839 §28; 1981 c.854 §27; 1985 c.212 §7; 1989 c.966 §67; 1991 c.648 §1; 1993 c.18 §140; 2003 c.170 §2; 2007 c.241 §13]

 

 

      656.408 [Renumbered 656.716]

 

 

      656.409 [1965 c.285 §75(2),(3); repealed by 1975 c.556 §54]

 

 

      656.410 [Amended by 1965 c.285 §54; renumbered 656.726]

 

 

      656.411 [1975 c.556 §28; 1979 c.348 §1; repealed by 1981 c.854 §1]

 

 

      656.412 [Amended by 1965 c.285 §52; renumbered 656.732]

 

 

      656.413 [1965 c.285 §76(1),(2); repealed by 1975 c.556 §54]

 

 

      656.414 [Renumbered 656.718]

 

 

      656.415 [1975 c.556 §30; repealed by 1981 c.854 §1]

 

 

      656.416 [Amended by 1965 c.285 §53; renumbered 656.722]

 

 

      656.417 [1965 c.285 §76 (3),(8); 1967 c.341 §6; repealed by 1975 c.556 §54]

 

 

      656.418 [Repealed by 1965 c.285 §95]

 

 

      656.419 Workers’ compensation insurance contracts. (1) A workers’ compensation insurance policy issued by an insurer under this section shall provide that the insurer agrees to assume, without monetary limit, the liability of the employer, arising during the period the policy is in effect, for prompt payment of all compensation for compensable injuries that may become due under this chapter to subject workers and their beneficiaries.

      (2)(a) The insurer issuing the workers’ compensation insurance policy shall file proof of coverage with the Director of the Department of Consumer and Business Services within 30 days after workers’ compensation coverage of the employer is effective. The filing shall be in the form and manner and shall include any information that the director may prescribe by rule.

      (b) An insurer shall file the proof of coverage required under this section for each new or renewed policy issued by the insurer.

      (3) Workers’ compensation coverage is effective when the application of the subject employer for coverage together with any required fees or premium are received and accepted by an authorized representative of an insurer or on the date specified in writing by the employer and the insurer.

      (4) Coverage of an employer under a workers’ compensation insurance policy continues until:

      (a) The expiration of the term of the policy;

      (b) The coverage is canceled prior to the expiration date of the policy as provided by ORS 656.423 or 656.427;

      (c) Another insurer files proof of coverage on behalf of the employer; or

      (d) The employer becomes self-insured under ORS 656.430. [1975 c.556 §29; 1977 c.405 §7; 1981 c.854 §28; 1987 c.237 §1; 1995 c.93 §35; 1995 c.332 §46; 2003 c.170 §3; 2007 c.241 §1]

 

 

      656.420 [Renumbered 656.758]

 

 

      656.421 [1965 c.285 §76(4),(5),(6),(7); repealed by 1975 c.556 §54]

 

 

      656.422 [Amended by 1959 c.450 §5; repealed by 1965 c.285 §95]

 

 

      656.423 Cancellation of coverage by employer; notice required. (1) An insured employer may cancel coverage with the insurer by giving the insurer at least 30 days’ written notice, unless a shorter period is permitted by subsection (3) of this section.

      (2) Cancellation of coverage is effective at 12 midnight 30 days after the date the cancellation notice is received by an authorized representative of the insurer, unless a later date is specified.

      (3) An employer may cancel coverage effective less than 30 days after written notice is received by an authorized representative of the insurer by providing other coverage, by becoming a self-insured employer or by agreement of the employer and the insurer. A cancellation under this subsection is effective immediately upon the effective date of the other coverage, on the effective date of certification as a self-insured employer or on a date agreed upon in writing by the employer and insurer.

      (4) The insurer shall file a notice of cancellation with the Director of the Department of Consumer and Business Services within 10 calendar days after the effective date of the cancellation or the date on which the insurer receives the notice required under subsection (1) of this section, whichever is later. The notice required under this subsection shall be in the form and manner and shall contain any information that the director may prescribe by rule. [1975 c.556 §31; 1981 c.854 §29; 2003 c.170 §4; 2007 c.241 §2]

 

 

      656.424 [Renumbered 656.734]

 

 

      656.425 [1965 c.285 §76a; repealed by 1975 c.556 §54]

 

 

      656.426 [Amended by 1965 c.285 §68b; renumbered 656.702]

 

 

      656.427 Termination of workers’ compensation insurance contract or surety bond liability by insurer; rules. (1) An insurer that issues a workers’ compensation insurance policy or surety bond to an employer under this chapter may cancel the policy or surety bond prior to the expiration date of the policy or surety bond by giving the employer and the Director of the Department of Consumer and Business Services notice of cancellation in accordance with rules adopted by the director. Notice required under this section must be provided to the director within 10 calendar days after the effective date of the cancellation provided in the notice given to the employer.

      (2) An insurer may cancel a workers’ compensation insurance policy or surety bond under this section as follows:

      (a) If the cancellation of a workers’ compensation insurance policy is for reasons other than those set forth in paragraphs (b) and (c) of this subsection, it is effective at 12 midnight not less than 45 days after the date the notice is mailed to the employer.

      (b) If the cancellation of a workers’ compensation insurance policy is based on the insurer’s decision not to offer insurance to employers within a specific premium category, it is effective not sooner than 90 days after the date the notice is mailed to the employer.

      (c) If the cancellation of a workers’ compensation insurance policy is based on nonpayment of premium, the cancellation is effective not sooner than 10 days after the date the notice is mailed to the employer.

      (d) The cancellation of a surety bond is effective at 12 midnight not less than 30 days after the date the notice is received by the director.

      (3) An insurer may nonrenew a workers’ compensation insurance policy by providing notice in the manner provided for in subsection (2) of this section.

      (4) Notice to the employer under this section shall be given by mail, addressed to the employer at the last-known address of the employer. If the employer is a partnership, notice may be given to any of the partners. If the employer is a limited liability company, notice may be given to any manager, or in a member managed limited liability company, to any of the members. If the employer is a corporation, notice may be given to any agent or officer of the corporation under whom legal process may be served.

      (5) Cancellation of a workers’ compensation insurance policy or surety bond shall in no way limit liability that was incurred under the policy or surety bond prior to the effective date of the cancellation.

      (6) If, before the effective date of a cancellation under this section, the employer gives notice to the insurer that it has not obtained coverage from another insurer and intends to become insured under the assigned risk plan established under ORS 656.730, the insurer shall ensure that continuing coverage is provided to the employer under the plan without further application by the employer, transferring the risk to the plan as of the effective date of cancellation. If the insurer is a servicing carrier under the plan, it shall continue to provide coverage for the employer as a servicing carrier, at least until another servicing carrier is provided for the employer in the normal course of administering the plan. If the insurer is not a servicing carrier, it shall apply to the plan for coverage on the employer’s behalf. Nothing in this section is intended to limit the authority of administrators of the plan to require the employer to provide deposits or to make payments consistent with plan requirements. However, the rules of the plan shall allow any deposit requirements imposed by the plan to be deferred for as long as one year.

      (7) The cancellation of a workers’ compensation insurance policy under this section is effective on the earliest of:

      (a) The expiration of the term of the policy;

      (b) The effective date of a cancellation under subsection (2) of this section; or

      (c) The effective date of a policy for which another insurer makes a proof of coverage filing on behalf of the employer. [1975 c.556 §32; 1981 c.854 §30; 1981 c.874 §5; 1981 c.876 §6; 1985 c.212 §8; 1990 c.1 §1; 1995 c.93 §36; 1995 c.332 §46a; 2003 c.170 §5; 2007 c.241 §3; 2007 c.656 §§1,2,3]

 

 

      656.428 [Amended by 1957 c.440 §3; repealed by 1965 c.285 §95]

 

 

      656.429 [1965 c.285 §77; repealed by 1975 c.556 §54]

 

 

      656.430 Certification of self-insured employer; employer groups; insurance policy requirements; revocation of certification; rules. (1) Upon determining that an employer has qualified as a self-insured employer under ORS 656.407, the Director of the Department of Consumer and Business Services shall issue a certificate to that effect to the employer.

      (2) Coverage of a self-insured employer is effective on the date of certification unless a later date is specified in the certificate.

      (3) Two or more entities shall not be included in the certification of one employer unless in each entity the same person, or group of persons, or corporation owns a majority interest. If an entity owns a majority interest in another entity which in turn owns the majority interest in another entity, all entities so related may be combined regardless of the number of entities in succession. If more than one entity is included in the certification of one employer, each entity included is jointly and severally liable for any compensation and other amounts due the Department of Consumer and Business Services under this chapter by any entity included in the certification.

      (4) In the term “majority interest,” as used in this section, “majority” means more than 50 percent.

      (5) If an entity other than a partnership:

      (a) Has issued voting stock, “majority interest” means a majority of the issued voting stock;

      (b) Has not issued voting stock, “majority interest” means a majority of the members; or

      (c) Has not issued voting stock and has no members, “majority interest” means a majority of the board of directors or comparable governing body.

      (6) If the entity is a partnership, majority interest shall be determined in accordance with the participation of each general partner in the profits of the partnership.

      (7) Notwithstanding any other provision of this section, the director may certify five or more subject employers as a self-insured employer group, which shall be considered an employer for purposes of this chapter, if:

      (a) The director finds that the employers as a group meet the requirements of ORS 656.407 (1)(b) and (2);

      (b) The director determines that:

      (A) If the employers as a group have insurance coverage with a retention of $100,000 or more, the employers have a combined net worth of $1 million or more; or

      (B) If the employers as a group have insurance coverage with a retention of less than $100,000, the employers have a combined net worth at least equal to the proportion of $1 million that the retention bears to $100,000;

      (c) The director finds that the grouping is likely to improve accident prevention and claims handling for the employer;

      (d) Each employer executes and files with the designated entity a written agreement, in such form as the director may prescribe, in which:

      (A) The employer agrees to be jointly and severally liable for the payment of any compensation and other amounts due to the Department of Consumer and Business Services under this chapter incurred by a member of the group; or

      (B) The employer, if a city, county, special district described and listed in ORS 198.010 or 198.180, translator district formed under ORS 354.605 to 354.715, weed control district organized under ORS 569.350 to 569.450, intergovernmental agency created under ORS 225.050, school district as defined in ORS 255.005 (9), public housing authority created under ORS chapter 456 or regional council of governments created under ORS chapter 190, agrees to be individually liable for the payment of any compensation and other amounts due to the department under this chapter incurred by the employer during the period of group self-insurance;

      (e) The director finds that the employer group is organized as a corporation or cooperative pursuant to ORS chapter 60, 62 or 65, is an intergovernmental entity created under ORS 190.003 to 190.130 and the bylaws require the governing group to obtain fidelity bonds;

      (f) The director finds that the employer group has designated an entity within or for the group responsible for centralized claims processing, payroll records, safety requirements, recording and submitting assessments and contributions and making such other reports as the director may require; and

      (g) The employer has presented a method approved by the director to notify the department of:

      (A) The commencement or termination of membership by employers in the group, and the effect thereof on the net worth of the employers in the group; and

      (B) Whether an employer who terminates membership in the group continues to be a subject employer.

      (8) A self-insured employer must have excess insurance coverage appropriate for the employer’s potential liability under this chapter with an insurer authorized to do business in this state. A self-insured employer certified prior to November 1, 1981, must have excess insurance coverage appropriate for the employer’s potential liability under this chapter either with an insurer authorized to do business in this state or with any other insurer from whom such insurance can be obtained pursuant to ORS 744.305 to 744.405 (1985 Replacement Part). Evidence of such coverage must be submitted at the time application is made for self-insured certification in the form of an insurance binder providing the appropriate coverage effective the date of certification. The policy providing such coverage must be filed with the director not later than 30 days after the date the coverage is effective. Any changes in the insurer or the coverage must be filed with the department not later than 30 days after the effective date of the change. With respect to such coverage:

      (a) The policy must include a provision, approved by the director, for reimbursement to the department of all expenses paid by the department on behalf of the employer pursuant to ORS 656.614 (1) and 656.443 in the same manner as if the department were the insured employer, subject to the policy limitations on amounts and limits of liability to the insured employer; and

      (b) The period of coverage must be continuous and remain in effect until the certification is revoked or canceled.

      (9) Notwithstanding ORS 656.440, the director may revoke the certification of any self-insured employer after giving 30 days’ written notice if the employer:

      (a) Fails to comply with subsection (8) of this section; or

      (b) In the case of an employer described in subsection (7) of this section, fails to comply with that subsection.

      (10) A self-insured employer must have an occupational safety and health loss control program as required by ORS 654.097.

      (11) The director, by rule shall:

      (a) Prescribe methods for determining and approving net worth.

      (b) Prescribe the types and approve the retention and limitation levels of excess insurance policies.

      (c) Establish reporting requirements.

      (d) Prescribe information to be submitted in applications for self-insured employer certifications.

      (e) Prescribe the form and manner of reporting commencement or termination in a self-insured employer group.

      (f) Prescribe the form, amount and manner for establishing and operating a common claims fund.

      (g) Prescribe such other requirements as the director considers necessary so that employers certified as self-insured employers will meet the financial responsibilities under this chapter.

      (12) For the purpose of certification as a self-insured employer group, cities, counties, special districts created under ORS 198.010, intergovernmental agencies created under ORS 225.050, school districts as defined in ORS 255.005 (9), public housing authorities created under ORS chapter 456 and regional councils of governments created under ORS chapter 190 shall be considered by the director to be of the same industry.

      (13) Notwithstanding subsection (8) of this section, a public utility with assets of more than $500 million may obtain excess insurance coverage from an eligible surplus lines insurer. As used in this subsection, “public utility” has the meaning given that term in ORS 757.005. [1975 c.556 §33; 1979 c.845 §1; 1981 c.535 §38; 1983 c.816 §9; 1985 c.739 §6; 1987 c.94 §107; 1987 c.800 §1; 1987 c.884 §58; 1989 c.602 §1; 1993 c.817 §2; 1999 c.280 §1; 2003 c.170 §6; 2005 c.189 §1]

 

 

      656.431 [1965 c.285 §78; 1973 c.620 §6; repealed by 1975 c.556 §54]

 

 

      656.432 [1977 c.659 §2; 1979 c.815 §8; repealed by 1981 c.854 §1]

 

 

      656.434 Certification effective until canceled or revoked; revocation of certificate. (1) A certification issued under ORS 656.430 remains in effect until:

      (a) Revoked by the Director of the Department of Consumer and Business Services as provided by this section and ORS 656.440; or

      (b) Canceled by the employer with the approval of the director.

      (2) The director may revoke the certification of a self-insured employer if:

      (a) The employer fails to comply with ORS 656.407 or 656.430; or

      (b) The employer commits any violation for which a civil penalty could be assessed under ORS 656.745.

      (3) When the certification of a self-insured employer is revoked, or when an employer terminates in a self-insured employer group, that employer must immediately comply with ORS 656.017 (1). If the employer fails to so comply, notwithstanding ORS 656.052 (3), the director immediately may file suit in the circuit court of the county in which the employer resides or employs workers. Upon filing of such a suit, the court shall set a date for hearing and shall cause notice thereof to be served on the employer. The hearing shall be not less than five nor more than 15 days from the date of service of the notice. Upon commencement of the suit, the circuit court shall enjoin the employer from further employing workers until the employer complies with ORS 656.017 (1). [1975 c.556 §34; 1979 c.845 §2; 1981 c.535 §39]

 

 

      656.440 Notice of certificate revocation; appeal; effective date. (1) Before revocation of certification under ORS 656.434 becomes effective, the Director of the Department of Consumer and Business Services shall give the employer notice that the certification will be revoked stating the grounds for the revocation. The notice shall be served on the employer in the manner provided by ORS 656.427 (4). The revocation shall become effective within 10 days after receipt of such notice by the employer unless within such period of time the employer corrects the grounds for the revocation or appeals in writing to the director. The director shall refer the request for hearing to the Workers’ Compensation Board for a hearing before an Administrative Law Judge.

      (2) If the employer appeals, the Hearings Division of the Workers’ Compensation Board under ORS 656.283 shall set a date for a hearing, which date shall be within 30 days after receiving the appeal request, and shall give the employer at least five days’ notice of the time and place of the hearing. A record of the hearing shall be kept but it need not be transcribed unless requested by the employer. The cost of transcription shall be charged to the employer. Within 10 days after the hearing, the Administrative Law Judge shall either affirm or disaffirm the revocation and give the employer written notice thereof by registered or certified mail.

      (3) If revocation is affirmed on review by the Administrative Law Judge, the revocation is effective five days after the employer receives notice of the affirmance unless within such period of time the employer corrects the grounds for the revocation or petitions for judicial review of the affirmance pursuant to ORS 183.480 to 183.497.

      (4) If the revocation is affirmed following judicial review, the revocation is effective five days after entry of the final judgment of affirmance, unless within such period the employer corrects the grounds for the revocation. [1975 c.556 §35; 1977 c.804 §15; 2003 c.576 §530; 2005 c.26 §14; 2007 c.241 §30]

 

 

      656.442 [1967 c.341 §7; repealed by 1975 c.556 §54]

 

 

      656.443 Procedure upon default by employer. (1) If an employer defaults in payment of compensation or other payments due to the Director of the Department of Consumer and Business Services under this chapter, the director may, on notice to the employer and any insurer providing workers’ compensation insurance coverage or a surety bond to such employer, use money or interest and dividends on securities, sell securities or institute legal proceedings on any surety bond or insurance policy for which a notice of coverage has been filed with the director to the extent necessary to make such payments.

      (2) Prior to any default by the employer, the employer is entitled to all interest and dividends on securities on deposit and to exercise all voting rights, stock options and other similar incidents of ownership of the securities.

      (3) If for any reason the certification of a self-insured employer is canceled or terminated, the security deposited with the director shall remain on deposit or in effect, as the case may be, for a period of at least 62 months after the employer ceases to be a self-insured employer. The security shall be maintained in an amount necessary to secure the outstanding and contingent liability arising from the accidental injuries secured by the security, and to assure the payment of claims for aggravation and claims arising under ORS 656.278 based on those accidental injuries. At the expiration of the 62-month period, or of another period the director may consider proper, the director may accept in lieu of the security deposited with the director a policy of paid-up insurance in a form approved by the director. [1975 c.556 §36; 1981 c.854 §31; 1987 c.373 §32; 2007 c.241 §14]

 

 

      656.444 [1967 c.341 §9; repealed by 1975 c.556 §54]

 

 

      656.445 Advancement of funds from Workers’ Benefit Fund for compensation due workers insured by insurer in default; limitations; rules. (1) If an insurer defaults in payment of compensation due an injured worker, the Director of the Department of Consumer and Business Services may advance funds from the Workers’ Benefit Fund to injured workers who have not received payment of compensation due from the insurer in default.

      (2) The maximum expenditures that may be made under this section may not exceed the amount of securities on deposit for the insurer pursuant to ORS 731.628.

      (3) The director shall adopt rules to regulate, manage and disburse moneys in the Workers’ Benefit Fund for the purposes of subsection (1) of this section. The rules shall include but not be limited to eligibility criteria, procedures for distributing funds, accounting procedures and a maximum expenditure limitation on payments made under subsection (1) of this section from the fund. [2001 c.974 §6]

 

 

      656.446 [1967 c.341 §10; repealed by 1975 c.556 §54]

 

 

      656.447 Sanctions against insurer for failure to comply with contracts, orders or rules. (1) The Director of the Department of Consumer and Business Services may suspend or revoke the authorization of an insurer to issue workers’ compensation insurance policies if the director, after notice to the company and giving the company an opportunity to be heard and present evidence, finds that:

      (a) The company has failed to comply with its obligations under any such policy; or

      (b) The company has failed to comply with the orders of the director or the provisions of this chapter or any rule promulgated pursuant thereto.

      (2) A suspension or revocation shall not affect the liability of any such company on any workers’ compensation insurance policy in force prior to the suspension or revocation. [1975 c.556 §37; 1977 c.430 §2; 1987 c.373 §33; 2007 c.241 §15]

 

 

      656.451 [1975 c.585 §6; 1981 c.854 §32; 1987 c.373 §34; 1987 c.884 §59; 1989 c.654 §1; 1991 c.640 §1; renumbered 654.097]

 

 

      656.452 [Amended by 1965 c.285 §54a; renumbered 656.632]

 

 

      656.454 [Renumbered 656.634]

 

 

      656.455 Self-insured employers required to keep records of compensation claims; location and inspection; expenses of audits and inspections; rules. (1) Every self-insured employer shall maintain a place of business in this state where the employer shall keep complete records of all claims for compensation made to the employer under this chapter or a self-insured employer may, under the conditions prescribed by ORS 731.475 (3), keep such records in this state at places operated by service companies. The records shall be retained in, and may be removed from, this state or disposed of, in accordance with the rules of the Director of the Department of Consumer and Business Services adopted pursuant to ORS 731.475. Such records shall be available to the director for examination and audit at all reasonable times upon notice by the director to the employer.

      (2) With the permission of the director, a self-insured employer may keep all claims records and process claims from a location outside of the state. The director shall by rule prescribe the conditions and procedure for obtaining permission of the director. The director may revoke permission for failure of the employer to comply with the rules. If the permission of an employer is revoked by the director, the employer shall be allowed 60 days after the order of revocation becomes final to comply with subsection (1) of this section. The expenses of the director to examine and audit the records of a self-insured employer outside of this state shall be paid by the employer.

      (3) Notwithstanding subsection (1) of this section, a self-insured employer may not have at any one time more than three locations where claims are processed or records are maintained. [1975 c.585 §8; 1989 c.630 §2]

 

 

ADMINISTRATION

 

(General Provisions)

 

 

      656.726 Duties and powers to carry out workers’ compensation and occupational safety laws; rules. (1) The Workers’ Compensation Board in its name and the Director of the Department of Consumer and Business Services in the director’s name as director may sue and be sued, and each shall have a seal.

      (2) The board hereby is charged with reviewing appealed orders of Administrative Law Judges in controversies concerning a claim arising under this chapter, exercising own motion jurisdiction under this chapter and providing such policy advice as the director may request, and providing such other review functions as may be prescribed by law. To that end any of its members or assistants authorized thereto by the members shall have power to:

      (a) Hold sessions at any place within the state.

      (b) Administer oaths.

      (c) Issue and serve by the board’s representatives, or by any sheriff, subpoenas for the attendance of witnesses and the production of papers, contracts, books, accounts, documents and testimony before any hearing under ORS 654.001 to 654.295, 654.412 to 654.423, 654.750 to 654.780 and this chapter.

      (d) Generally provide for the taking of testimony and for the recording of proceedings.

      (3) The board chairperson is hereby charged with the administration of and responsibility for the Hearings Division.

      (4) The director hereby is charged with duties of administration, regulation and enforcement of ORS 654.001 to 654.295, 654.412 to 654.423, 654.750 to 654.780 and this chapter. To that end the director may:

      (a) Make and declare all rules and issue orders which are reasonably required in the performance of the director’s duties. Unless otherwise specified by law, all reports, claims or other documents shall be deemed timely provided to the director or board if mailed by regular mail or delivered within the time required by law. Notwithstanding any other provision of this chapter, the director may adopt rules to allow for the electronic transmission and filing of reports, claims or other documents required to be filed under this chapter and to require the electronic transmission and filing of proof of coverage required under ORS 656.419, 656.423 and 656.427. Notwithstanding ORS 183.310 to 183.410, if a matter comes before the director that is not addressed by rule and the director finds that adoption of a rule to accommodate the matter would be inefficient, unreasonable or unnecessarily burdensome to the public, the director may resolve the matter by issuing an order, subject to review under ORS 656.704. Such order shall not have precedential effect as to any other situation.

      (b) Hold sessions at any place within the state.

      (c) Administer oaths.

      (d) Issue and serve by representatives of the director, or by any sheriff, subpoenas for the attendance of witnesses and the production of papers, contracts, books, accounts, documents and testimony in any inquiry, investigation, proceeding or rulemaking hearing conducted by the director or the director’s representatives. The director may require the attendance and testimony of employers, their officers and representatives in any inquiry under this chapter, and the production by employers of books, records, papers and documents without the payment or tender of witness fees on account of such attendance.

      (e) Generally provide for the taking of testimony and for the recording of such proceedings.

      (f) Provide standards for the evaluation of disabilities. The following provisions apply to the standards:

      (A) The criterion for evaluation of permanent impairment under ORS 656.214 is the loss of use or function of a body part or system due to the compensable industrial injury or occupational disease. Permanent impairment is expressed as a percentage of the whole person. The impairment value may not exceed 100 percent of the whole person.

      (B) Impairment is established by a preponderance of medical evidence based upon objective findings.

      (C) The criterion for evaluation of work disability under ORS 656.214 is permanent impairment as modified by the factors of age, education and adaptability to perform a given job.

      (D) When, upon reconsideration of a notice of closure pursuant to ORS 656.268, it is found that the worker’s disability is not addressed by the standards adopted pursuant to this paragraph, notwithstanding ORS 656.268, the director shall, in the order on reconsideration, determine the extent of permanent disability that addresses the worker’s impairment.

      (E) Notwithstanding any other provision of this section, only impairment benefits shall be awarded under ORS 656.214 if the worker has been released to regular work by the attending physician or nurse practitioner authorized to provide compensable medical services under ORS 656.245 or has returned to regular work at the job held at the time of injury.

      (g) Prescribe procedural rules for and conduct hearings, investigations and other proceedings pursuant to ORS 654.001 to 654.295, 654.412 to 654.423, 654.750 to 654.780 and this chapter regarding all matters other than those specifically allocated to the board or the Hearings Division.

      (h) Participate fully in any proceeding before the Hearings Division, board or Court of Appeals in which the director determines that the proceeding involves a matter that affects or could affect the discharge of the director’s duties of administration, regulation and enforcement of ORS 654.001 to 654.295, 654.412 to 654.423, 654.750 to 654.780 and this chapter.

      (5) The board may make and declare all rules which are reasonably required in the performance of its duties, including but not limited to rules of practice and procedure in connection with hearing and review proceedings and exercising its authority under ORS 656.278. The board shall adopt standards governing the format and timing of the evidence. The standards shall be uniformly followed by all Administrative Law Judges and practitioners. The rules may provide for informal prehearing conferences in order to expedite claim adjudication, amicably dispose of controversies, if possible, narrow issues and simplify the method of proof at hearings. The rules shall specify who may appear with parties at prehearing conferences and hearings.

      (6) The director and the board chairperson may incur such expenses as they respectively determine are reasonably necessary to perform their authorized functions.

      (7) The director, the board chairperson and the State Accident Insurance Fund Corporation shall have the right, not subject to review, to contract for the exchange of, or payment for, such services between them as will reduce the overall cost of administering this chapter.

      (8) The director shall have lien and enforcement powers regarding assessments to be paid by subject employers in the same manner and to the same extent as is provided for lien and enforcement of collection of premiums and assessments by the corporation under ORS 656.552 to 656.566.

      (9) The director shall have the same powers regarding inspection of books, records and payrolls of employers as are granted the corporation under ORS 656.758. The director may disclose information obtained from such inspections to the Director of the Department of Revenue to the extent the Director of the Department of Revenue requires such information to determine that a person complies with the revenue and tax laws of this state and to the Director of the Employment Department to the extent the Director of the Employment Department requires such information to determine that a person complies with ORS chapter 657.

      (10) The director shall collect hours-worked data information in addition to total payroll for workers engaged in various jobs in the construction industry classifications described in the job classification portion of the Workers’ Compensation and Employers Liability Manual and the Oregon Special Rules Section published by the National Council on Compensation Insurance. The information shall be collected in the form and format necessary for the National Council on Compensation Insurance to analyze premium equity. [Formerly 656.410; 1977 c.804 §30; 1979 c.677 §2; 1979 c.839 §20; 1981 c.535 §45; 1981 c.723 §5; 1981 c.854 §49a; 1981 c.876 §9; 1985 c.600 §16; 1985 c.706 §4; 1985 c.770 §4; 1987 c.884 §2; 1990 c.2 §40; 1995 c.332 §55; amendments by 1995 c.332 §55a repealed by 1999 c.6 §1; 1999 c.313 §10; 1999 c.876 §9; 2003 c.170 §7; 2003 c.171 §1; 2003 c.657 §§3,4; 2003 c.811 §§17,18; 2005 c.26 §§16,17; 2005 c.653 §§1,2a; 2007 c.241 §§4,5; 2007 c.270 §§7,8; 2007 c.274 §2]