Oregon Passes Two Bills That Strengthen the PEO Model and Simplify Reporting

For years, Professional Employer Organizations (PEOs) operating in Oregon have faced a frustrating mix of outdated terminology, unclear reporting expectations, and regulatory ambiguity. That changed this spring.

Two important bills—HB 2800 and HB 2236—have now been signed into law by Governor modernizing how the PEO relationship is defined and how unemployment insurance reporting is handled.

This isn’t just good news for PEOs in Oregon—it’s a big win for consistency, compliance, and the long-term viability of the co-employment model across the country.

HB 2800: Out With “Co-Employment,” In with Clarity

One of the most meaningful shifts in HB 2800 is the formal definition of a “PEO relationship.” It replaces outdated co-employment terminology with language that better reflects how PEOs operate today—sharing employer responsibilities with their clients based on contractually defined roles.

Why it matters:

·      Gives regulators, auditors, and business partners a clearer framework to evaluate PEO relationships

·      Helps avoid misinterpretation or reclassification during policy reviews

·      Aligns statute with the actual function and structure of modern PEO agreements

HB 2236: Codifying UI Reporting Practices

This bill makes official what most responsible PEOs have already been doing: managing unemployment insurance (UI) reporting on behalf of client employers under a consistent and compliant standard.

The bill brings UI reporting requirements into alignment with how PEOs already serve their clients—simplifying compliance, avoiding audit surprises, and building trust with the state.

Why it matters?

·      Eliminates grey areas that once created tension between PEOs and regulators

·      Streamlines operations for both large and mid-sized PEOs with Oregon-based clients

·      Gives clarity to agencies like the Oregon Employment Department and the Department of Consumer and Business Services when evaluating filings

Legislation doesn’t often go smoothly—and rarely with such broad support. These two bills didn’t just pass; they passed unanimously. That tells you something: the PEO model isn’t just gaining ground—it’s gaining permanence.

For forward-thinking PEOs, this is a signal to invest in the infrastructure that supports clarity, compliance, and credibility.

Because the future of risk management in co-employment starts with better data.