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    Alice Barghini   
503-947-7544   

Helpful hints, when applying for
a license

For worker leasing companies

Employee leasing is an alternative for employers who may not have the time to, or do not wish to, deal with the administrative functions of employing full-time workers. In most cases, workers are already established with the employer. The leasing company will hire these workers and lease them back to the employer under contract for a fee. Worker-leasing companies take on the responsibility for payroll, employment taxes, and workers' compensation assessments. They may also offer workers' compensation insurance, retirement options and medical benefits.

Worker leasing is known by a variety of names. Professional Employer Organization (PEO) is probably the best known. It can also be called "staffing or management services", employee leasing and staff leasing. Worker leasing differs from temporary services in that temporaries provide workers to a client for special situations, i.e., to cover employee absences, employee leaves, professional skill shortages, seasonal workloads, and special assignments. Temporary situations have the expectation that the position(s) will be terminated at completion. Anything that does not fall into one of those situations may be considered a leasing arrangement.

Oregon Revised Statute (ORS) 656.850 requires leasing companies to obtain a license from the Director of the Department of Consumer and Business Services prior to doing business in Oregon. There are 2 steps a worker-leasing company should take before submitting an application.
(1) Register with the office of Secretary of State, Corporations Division, to conduct business in Oregon. www.filinginoregon.com(2) Have a workers' compensation coverage policy with proof of coverage on file with the Workers' Compensation Division (WCD).

The licensing process will be prolonged if these steps are not followed.

As part of the application process, leasing companies are required to pay $2,050, for a two-year license. Each license automatically expires after the two-year period unless renewed by the leasing company.

A "Plan of Operation" must be completed and submitted with the application. Oregon OSHA rules consider a worker leasing company jointly responsible, along with the client company, for ensuring job safety and health. The "Plan of Operation" details what the worker leasing company will do to ensure that clients follow the requirements of ORS chapter 654 of the Oregon Occupational Safety and Health Act.

Worker leasing companies are required to have a designated Oregon location with an Oregon telephone number. Also, they must have an authorized representative in Oregon who is knowledgeable enough to answer inquiries concerning the business in Oregon. At their Oregon location they must maintain copies of signed contracts, copies of signed worker-leasing notices, cancellations of leasing arrangements, and payroll records for all Oregon employees.

After licensing, the worker leasing company is required to keep WCD updated on client information and changes to the leasing company's information. Within fourteen days of the effective date of the leasing agreement the leasing company must file form 440-2465 (Worker Leasing Notice), for clients whose workers' compensation coverage is provided by the leasing company. Leasing companies are also required to file a copy of the notice with their insurer. After the notices have been filed and accepted by WCD, the leasing company is responsible for ensuring that copies of the "Notice of Compliance," Form 440-1188 (1188), are posted at their clients' businesses.

If there are changes to any information contained on the Worker Leasing Notice the worker leasing company must file, form 440-3270 (Endorsement to Worker Leasing Notice) with WCD.

Written notice of termination is required when a worker leasing arrangement is terminated, or when the worker leasing company no longer provides workers' compensation coverage for the client. The Notice of Termination, form 440-4271, must be sent to the client, the workers' compensation insurer, and WCD. The termination effective date cannot be sooner than 30 days after the Department receives the notice.

Changes to the worker leasing company's designated in-state location, authorized representative, telephone number, or controlling persons must be made in writing and received by the Department within 30 days of the date of change.

A change in the worker leasing company's form of legal entity requires that the new entity submit an application to become licensed. A worker leasing license is not transferable to another entity.

A worker leasing license can be disqualified, suspended or revoked if the worker leasing company fails to comply with any of these requirements. There may also be civil penalties imposed for non-compliance.

A list of active licensed worker-leasing companies can be found on the WCD Website , along with the application, rules, and forms mentioned in this article.

Questions or concerns about worker leasing should be directed to the Worker Leasing Program representative at 503-947-7815 or email.

If you have questions about this webpage, please contact Alice Barghini, 503-947-7544.