PEO in Oregon [2024]

A professional employer organization (PEO) can help streamline and automate a company's most cumbersome HR tasks. PEOs handle administrative functions like payroll processing, tax registration, and compliance with employment laws on a company’s behalf, all while providing small and medium-sized businesses access to benefits they might not otherwise be able to secure on their own. 

If you lead a business in Oregon (or have Oregonian employees), PEOs can help with compliance issues unique to the state—like registering for transit taxes, adhering to paid annual leave policies, administering unemployment insurance, and providing a Workers’ Benefit Fund Assessment to ensure employees have workers’ compensation insurance. 

So, which PEO is best suited for your business? This guide will help you evaluate your options and choose a top PEO in the Beaver State. Rippling PEO, for instance, makes it easy to hire, onboard, and manage your Oregon-based workforce by automatically registering employees for taxes, distributing laptops to new remote workers, and much more.

Benefits of using a PEO in Oregon

From time savings to affordable access to premier benefits and expert compliance assistance, here’s a look at the advantages of using a PEO service in Oregon. 

Offload administrative HR work

PEO services co-employ your workforce. This means your company and the PEO divvy up employee-related responsibilities as follows: 

• Your company remains the worksite employer—with full authority over personnel decisions, salaries, and all core business operations from sales to research and development.

• You entrust the PEO as your administrative employer—which hires workers under its own federal tax identification number (EIN). The PEO then assumes full responsibility for payroll, tax registration, benefits administration, compliance, and other human resources tasks on your company’s behalf. 

Since you’re delegating responsibilities to a third party, Oregon authorities often refer to PEO providers as “employee leasing companies.” Businesses need to fulfill licensing requirements with the state government’s Workers’ Compensation Division to work with a leasing company and prove all Oregon employees are covered by mandatory state benefits.

By outsourcing your administrative burden to a PEO, you can take time-consuming paperwork off your plate. This allows your HR team to focus on more strategic projects. It can also help your company scale—PEO clients have up to 9% faster growth rates than average small businesses, according to the National Association of Professional Employer Organizations (NAPEO). 

Better employee benefits, at a lower price

According to the NAPEO, PEOs “employ” 4.5 million workers across 200,000 businesses. This creates economies of scale, allowing PEO companies to bargain for more affordable benefits packages with third-party vendors. They can also help small business owners access comprehensive plans otherwise only available to bigger companies, often including:

• Health insurance (dental, vision, and mental health coverage)
• Life insurance
• Disability insurance
• Retirement plans
• Meal stipends
• Commuter stipends 

With democratized access to attractive benefits, small and mid-sized businesses can gain a competitive edge, allowing them to recruit and keep top talent. 

Worry-free compliance with Oregon laws

US businesses need to adhere to federal employment laws and state and local statutes in every jurisdiction where workers live. This can be a lot to keep track of, and compliance gets trickier if your workforce is scattered throughout multiple states. 

The Beaver State, for its part, has several niche state regulations, including a transit tax for Oregon workers living in the Portland and Eugene metro areas (in addition to a small .001% transit tax statewide) to fund transportation systems. As of September 2023, Oregon also has a new paid leave program that allows eligible employees to take up to 12 weeks of paid time off annually.

A PEO can ensure compliance with the assortment of federal, state, and local employment laws, relieving your HR team of the headaches that come from mastering every regulation everywhere you hire. Rippling, for instance, automatically flags compliance issues like wage violations, ensuring employers abide by Oregon’s state minimum wage of $14.25 an hour and more regional policies, like the Portland area hourly wage floor of $15.45. 

PEOs offer reliable compliance support for:

• Payroll regulations: Register and file for Oregon’s payroll taxes—including unemployment insurance, state income tax, and transit taxes. A PEO ensures your business makes the right withholdings and pays the correct agencies on time, including the Salem-based Oregon Department of Revenue.
• Benefits laws: Stay on top of state requirements like Paid Leave Oregon. PEOs also help navigate federal healthcare policies under the Affordable Care Act, COBRA, FSA, and HSA.
• Employment laws: Ensure your company completes a Workers’ Benefit Fund (WBF) assessment, which funds workers’ compensation insurance policies in Oregon—all while following federal Equal Employment Opportunity (EEO) requirements and correctly classifying workers.

Failing to comply with tax and legal requirements—in Oregon and wherever else your employees live—can incur steep fines. Oregon tax authorities charge 5% penalties for late filings. And according to the IRS, 40% of small businesses pay payroll penalties annually. PEOs can help you avoid any costly slip-ups.

Dedicated support team

PEOs offer expert, on-call advice for any HR-related issue your team could use a hand with. Whether you have questions about tax filing paperwork, distributing workplace posters, workplace health and safety guidelines, crafting employee handbooks, or something else, PEOs can provide trusted support—all while ensuring compliance with employment and tax laws.

What to consider when evaluating a PEO service in Oregon

In 2018, Oregon eliminated the requirement for PEOs to have an in-state office. This means companies looking to do business in the Beaver State can choose from hundreds of service providers nationwide. So, how do you know which option is best for your workforce? Here’s what to keep in mind. 

• Your HR outsourcing needs: Think about your current workforce along with your future growth plans. If you’re looking to delegate HR tasks, PEOs can help with:
• Payroll processing
• Tax registration and filing
• Compliance monitoring and risk management
• Benefits administration
• Recruiting and onboarding
• Time and attendance tracking
• Your budget: PEOs typically either charge monthly fees per employee or fees based on a percentage of your total payroll—meaning they’ll typically get pricier as your headcount grows.
• Experience and reputation: See which solutions HR professionals in your orbit rave about. You can also check review sites like G2 and Capterra to see if the PEO’s clients are satisfied with the product. It’s also helpful if the company has experience in Oregon. 
• Benefits: Which specific plans can the PEO help you access? Compare different prices and keep the quality and range of benefits plans in mind. 
• Benefits renewal rates: PEOs often give you an alluring rate the first year only to jack up the price the following year. This leaves companies stuck with unexpected costs or scrambling for a more affordable option. Look for PEO companies that are transparent about how renewal rates will change over time, and watch out for steep price hikes. 
• Integrations: PEOs are more efficient when they work alongside collaboration tools and systems you already use. Look for options that sync with your tech stack and help you make the most of your employee data. 
• Does the PEO specialize in certain industries? Some PEOs are tailored to specific industries. Research whether your business could benefit from a specialized PEO option.
• Does the PEO specialize in certain legal or compliance issues? Your business may have state or industry-specific compliance needs. In Oregon, for instance, industries like marijuana and petroleum require businesses to pay extra taxes. In these cases, finding a PEO with niche compliance experience can be helpful. 
• Your exit strategy: PEOs may help in the short term, but they can become too expensive once your company scales. If you ever want to move off a PEO and bring your HR duties in-house, you’ll likely have to ditch all your existing systems. Look for PEO options that let you move on and off with minimal disruption and keep employee and payroll data in the same accounts. 

Why Rippling PEO is the right choice for your Oregon business

Rippling PEO is the first PEO to merge HR, IT, and Finance into a single platform. While most providers use software from the 1980s, our system is modern, easy to use, and allows you to automate your most time-consuming administrative tasks. For example, you can onboard new hires in 90 seconds and immediately configure and ship their new laptops. 

Delegate your compliance issues to Rippling, and rest assured you’ll always adhere to relevant employment and tax laws. Rippling sets up state and local tax accounts, automatically detects wage and overtime violations, and helps you access top-tier benefits at affordable costs. 

With Rippling, you get:

• An all-in-one HR, IT, and Finance solution
• Customizable reporting on employee data that you can easily share with your team
• Tools for managing remote teams, including state and local tax registration, remote I-9 verification, and seamless app provisioning
• Access to premier benefits packages with below-average renewal rates
• Automatic monitoring of compliance infractions, with recommended courses of action on how to fix them
• Automated risk management, including ACA and COBRA administration, digital labor law poster distribution, and access to anti-harassment training
• Full access to hundreds of HR resources, guides, and templates—like an employee handbook builder and performance review tools 

Rippling PEO allows you to move on and off our PEO seamlessly. All your systems, integrations, and logins—complete with your employee data—remain intact as you move to our all-in-one workforce management platform.

FAQs about PEOs in Oregon

What is a PEO, and how does it work?

A PEO is a firm that businesses partner with to divide HR responsibilities. PEOs co-employ your workforce and are typically responsible for administrative functions like processing payroll, registering tax accounts, providing access to benefits, and managing compliance with federal, state, and local guidelines. The company retains authority over core business processes and any strategic decisions. 

Are PEOs in Oregon required to have special certifications or licenses?

Yes. PEOs, often referred to in Oregon as worker leasing companies, need a license from the state government’s Workers’ Compensation Division (WCD) to operate legally in the state. Licenses are valid for two years and are renewable every term. To get a license, PEO providers also need to register with the Oregon Secretary of State’s office and later prove to state authorities that workers’ compensation covers their employees. 

More information about PEO licensing requirements in Oregon is available on the WCD website. 

Which PEOs can I use in Oregon?

The WCD office publishes a list of PEOs that can legally operate in Oregon. 

What is a Certified PEO?

A Certified PEO (CPEO) abides by IRS guidelines concerning its background, expertise, finances, and reporting. Certification isn’t mandatory and doesn’t mean the IRS recommends that PEO; it just means it fulfilled certain criteria. While being certified used to help PEOs grant tax benefits to businesses, most of those advantages are no longer available. 

Some PEOs are also Employer Services Assurance Corporation (ESAC)-certified. In Oregon, this allows the PEO to apply for a license online. 

What size company can benefit from a PEO?

Companies of all sizes can join a PEO, but small to mid-sized businesses typically get the most cost savings from the offerings.

How does an Oregon PEO charge for its services?

PEO costs can vary depending on your headcount and the types of services you need. Typically, PEOs charge either a monthly fee per employee or a specified percentage of total payroll.

What is the implementation process, and how long does it take to go live?

The PEO will usually collect employee and payroll data along with benefits information. Then, they’ll set up their systems to handle your data. Sometimes, this requires integrating their systems with yours. They may also hold training sessions to help onboard your employees, explain the new benefits, and provide ongoing support. 

Implementation can take several weeks to a few months, depending on your business’s size and the services you need.

Are PEOs regulated?

Yes. PEOs are subject to both federal and state regulations. In Oregon, the WCD office oversees licensing and compliance issues for PEOs. 

What happens if I want to terminate my relationship with a PEO?

If you want to end your partnership with a PEO, you typically must seek new systems to process payroll, administer benefits, register for taxes, manage employees—and anything else your PEO handled for you.

With Rippling PEO, the transition is made easy. You can move to our all-in-one workforce management platform, which keeps all your tried-and-true systems, data, and integrations in place. 

In what states is Rippling PEO available?

Rippling PEO is available nationwide. 

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.