2023 Oregon Revised Statutes › Volume : 16 - Trade Practices, Labor and Employment › Chapter 658 - Employment Agencies; Farm Labor Contractors and Construction Labor Contractors; Farmworker Camps › Section 658.415 - Application for license; proof of insurance and financial responsibility; exceptions; proceedings to collect wages owed by labor contractor; commissioner as agent for service of process; rules.

(1) A person may not act as a labor contractor unless the person has first been licensed by the Commissioner of the Bureau of Labor and Industries under ORS 658.405 to 658.511. Any person may file an application for a license to act as a labor contractor at any office of the Bureau of Labor and Industries. The application shall be sworn to by the applicant and shall be written on a form prescribed by the commissioner. The form shall include, but not be limited to, questions asking:
(a) The applicant’s name, Oregon address and all other temporary and permanent addresses the applicant uses or knows will be used in the future.
(b) Information on all motor vehicles to be used by the applicant in operations as a labor contractor including license number and state of licensure, vehicle number and the name and address of vehicle owner for all vehicles used.
(c) Whether or not the applicant was ever denied a license under ORS 658.405 to 658.511 within the preceding three years, or in this or any other jurisdiction had a labor contract license denied, revoked or suspended within the preceding three years.
(d) The names and addresses of all persons financially interested, whether as partners, shareholders, associates or profit-sharers, in the applicant’s proposed operations as a labor contractor, together with the amount of their respective interests, and whether or not, to the best of the applicant’s knowledge, any of these persons was ever denied a license under ORS 658.405 to 658.511 within the preceding three years, or had a labor contractor license denied, revoked or suspended within the preceding three years in this or any other jurisdiction.
(2) Each applicant shall furnish satisfactory proof with the application of the existence of:
(a) A policy of insurance in an amount adequate under rules issued by the commissioner for vehicles to be used to transport workers. Satisfactory proof of adequate insurance includes:
(A) The certificate of an insurance producer licensed in Oregon.
(B) For property services contractors only, documentation that provides the insurance policy number, the amount of coverage under the policy and the name of the insurance producer.
(b) Workers’ compensation insurance as provided in ORS 658.440 (1)(j). The commissioner may adopt rules concerning satisfactory proof of adequate workers’ compensation insurance.
(3) Except as provided in subsection (6) of this section, each applicant shall submit with the application and shall continually maintain thereafter, until excused, proof of financial ability to promptly pay the wages of employees and other obligations specified in this section. The proof required in this subsection shall be in the form of a corporate surety bond of a company licensed to do such business in Oregon, a cash deposit or a deposit the equivalent of cash. For the purposes of this subsection, it shall be deemed sufficient compliance if the labor contractor procures a savings account at a bank or savings and loan institution in the name of the commissioner as trustee for the employees of the labor contractor and others as their interests may appear and delivers proof of the account and the ability to withdraw the funds to the commissioner under the terms of a bond approved by the commissioner. The amount of the bond and the security behind the bond, or the cash deposit, shall be based on the maximum number of employees the labor contractor employs at any time during the year. The bond or cash deposit shall be:
(a) $10,000 if the labor contractor employs no more than 20 employees; or
(b) $30,000, or such lesser sum as may be authorized by the commissioner under ORS 658.416, if the labor contractor employs 21 or more employees.
(4) In the event that a single business entity licensed as a labor contractor has more than one natural person who, as an owner or employee of the business entity, engages in activities that require the persons to be licensed individually as labor contractors, and each person engages in those activities solely for that business entity, the commissioner may provide by rule for lower aggregate bonding requirements for the business entity and its owners and employees. If there is an unsatisfied judgment of a court or final decision of an administrative agency against a license applicant, the subject of which is any matter that would be covered by the bond or deposit referred to in subsection (3) of this section, the commissioner may not issue a license to the applicant until the judgment or decision is satisfied. As a condition of licensing any such applicant, the commissioner may require the applicant to submit proof of financial ability required by subsection (3) of this section in an amount up to three times that ordinarily required of a license applicant.
(5) All corporate surety bonds filed under this section or ORS 658.419 shall be executed to cover liability for the period for which the license is issued. During the period for which it is executed, the bond may not be canceled or otherwise terminated.
(6) A property services contractor is not required to file proof of financial ability under subsection (3) of this section if:
(a) The property services contractor provides proof of general liability insurance coverage in an amount that the commissioner determines by rule is adequate; and
(b) The commissioner finds that the property services contractor, within the preceding two years, has not:
(A) Violated ORS chapter 652 or 653; or
(B) Committed an unlawful employment practice under ORS chapter 659A.
(7) Each application must be accompanied by the fee established under ORS 658.413.
(8) Any person who uses the services of a labor contractor who has failed to comply with any of the provisions of this section or ORS 658.419 shall:
(a) Be personally and jointly and severally liable to any employee as far as the employee has not been paid wages in full for the work done for that person.
(b) Be personally liable for all penalty wages that have occurred under ORS 652.150 for the wages due under this section.
(9) Any person who suffers any loss of wages from the employer of the person or any other loss specified in subsection (17) of this section shall have a right of action in the name of the person against the surety upon the bond or against the deposit with the commissioner. The right of action:
(a) Is assignable and must be included with an assignment of a wage claim, of any other appropriate claim or of a judgment thereon.
(b) May not be included in any action against the labor contractor but must be exercised independently after first procuring a judgment or other form of adequate proof of liability established by rule and procedure under subsection (15) of this section establishing the labor contractor’s liability for the claim.
(10)(a) The surety company or the commissioner shall make prompt and periodic payments on the labor contractor’s liability up to the extent of the total sum of the bond or deposit.
(b) Payment shall be made based upon priority of wage claims over advances made by the construction property owner, the grower or producer of agricultural commodities or the owner or lessee of land intended to be used for the production of timber, for advances made to or on behalf of the labor contractor.
(c) Payment shall be made in full of all sums due to each person who presents adequate proof of the claim.
(d) Payment shall be made in part if there are insufficient funds to pay in full the person next entitled to payment in full.
(11) A person may not bring any action against the surety company or the commissioner on the bond or against the commissioner as the trustee for the beneficiaries of the labor contractor under any deposit made pursuant to this section or ORS 658.419 unless the person has first exhausted the procedures contained in subsections (9) and (13) of this section or in ORS 658.419 and contends that the surety company or the commissioner still has funds that are applicable to the person’s judgment or acknowledgment.
(12) The commissioner may not be prevented from accepting assignments of wage claims and enforcing liability against the surety on the bond or from applying the deposit to just wage claims filed with the commissioner.
(13) All claims against the bond or deposit shall be unenforceable unless request for payment of a judgment or other form of adequate proof of liability or a notice of the claim has been made by certified mail to the surety or the commissioner within six months from the end of the period for which the bond or deposit was executed and made.
(14) If the commissioner has received no notice as provided in subsection (13) of this section within six months after a labor contractor is no longer required to provide and maintain a surety bond or deposit, the commissioner shall terminate and surrender any bond or any deposit under the control of the commissioner to the person who is entitled thereto upon receiving appropriate proof of such entitlement.
(15) The commissioner shall adopt rules reasonably necessary for administration and enforcement of the provisions of this section and ORS 658.419.
(16) Every labor contractor required by this section or ORS 658.419 to furnish a surety bond or make a deposit in lieu of a surety bond shall keep conspicuously posted upon the premises where employees working under the contractor are employed a notice, in both English and any other language used by the labor contractor to communicate with workers, specifying the contractor’s compliance with the requirements of this section and ORS 658.419 and specifying the name and Oregon address of the surety on the bond or a notice that a deposit in lieu of the bond has been made with the commissioner together with the address of the commissioner.
(17) The bond or deposit referred to in subsection (3) of this section shall be payable to the commissioner and shall be conditioned upon:
(a) Payment in full of all sums due on wage claims of employees.
(b) Payment by the labor contractor of all sums due to the construction property owner, the grower or producer of agricultural commodities or the owner or lessee of land intended to be used for the production of timber for advances made to or on behalf of the labor contractor.
(18) The commissioner may not issue a license until the applicant executes a written statement that shall be subscribed and sworn to and that shall contain the following declaration:
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With regards to any action filed against me concerning my activities as a labor contractor, I appoint the Commissioner of the Bureau of Labor and Industries as my lawful agent to accept service of summons when I am not present in the jurisdiction in which such action is commenced or have in any other way become unavailable to accept service.
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(19) A person who cosigns with a labor contractor for a bond required by subsection (3) of this section or by ORS 658.419 is not personally or jointly and severally liable for unpaid wages above the amount of the bond solely because the person cosigned for the bond.
(20) The court may award reasonable attorney fees to the prevailing party in any action to enforce the provisions of this section or ORS 658.419. [1959 c.395 §§3,4; 1961 c.390 §3; 1971 c.479 §3; 1973 c.401 §2; 1975 c.502 §3; 1979 c.883 §1; 1981 c.606 §2; 1981 c.897 §93; 1989 c.164 §11; 1989 c.930 §2; 1991 c.331 §100; 1993 c.723 §1; 1995 c.73 §2; 1995 c.618 §115; 1999 c.399 §3; 1999 c.628 §6; 2003 c.364 §54; 2003 c.576 §534; 2005 c.22 §465; 2007 c.160 §1; 2013 c.584 §7; 2017 c.676 §6; 2018 c.8 §5]