Oregon Workers' Compensation Coverage and Claims

Oregon’s Workers’ Compensation Law, ORS chapter 656, requires nearly every employer to provide coverage for its workers against job-related injury and disease. In exchange, the employer is protected from lawsuits by those workers. This chapter covers who must be covered, the exclusive remedy, what counts as a covered injury or occupational disease, and the worker’s duty to give notice. The next chapter covers the benefits and the ways an employer can obtain coverage.

Oregon Workers’ Compensation Law (ORS Chapter 656)

The law’s stated purposes include providing, regardless of fault, sure, prompt and complete medical treatment for injured workers, and fair, adequate and reasonable income benefits to them and their dependents. It is also meant to be the sole and exclusive means by which a worker seeks a remedy for a work injury (ORS 656.012). The law is administered by the Director of the Department of Consumer and Business Services.

Workers’ compensation insurance is written by the State Accident Insurance Fund Corporation (SAIF), an independent public corporation created by the state (ORS 656.751), and by private insurers authorized in Oregon (ORS 656.005(14)). An employer that insures with either is a carrier-insured employer (ORS 656.005(4)).

No coverage, no operating. A person may not operate as a subject employer until it has provided workers’ compensation coverage (ORS 656.052). An employer that fails to do so is a noncomplying employer. Its injured workers are still paid as if the employer had complied, through an assigned claims agent, and the employer must repay those costs to the Workers’ Benefit Fund in addition to civil penalties (ORS 656.054).

Exclusive remedy (ORS 656.018)

When an employer has provided the required coverage, its liability for a worker’s job-related injury or disease is exclusive. The benefits of the Workers’ Compensation Law are in place of any other remedy the worker (or the worker’s beneficiaries) might have against the employer, under common law or statute. The bar also blocks claims by third parties against the employer for contribution or indemnity, and any agreement to the contrary is void (claims by railroads and regulated utilities are treated differently). The bar applies even if the injury is ultimately found not compensable, with one exception: if a claim is denied because the worker could not prove that work was the major contributing cause of the injury, the worker may sue the employer for negligence once the denial is final (ORS 656.019).

The bar reaches only the employer and the persons listed below. When an injury is due to the negligence or wrong of a third person not in the same employ, the worker (or, if the worker dies, the worker’s dependents) may seek a remedy against that person (ORS 656.154).

The same protection extends to the employer’s insurer, a self-insured employer’s claims administrator, the Department of Consumer and Business Services, and the employer’s contracted agents, employees, officers, directors, partners and LLC members. It does not protect one of those persons when:

• Their willful and unprovoked aggression was a substantial factor in causing the injury
• They and the worker were not engaged in a common enterprise
• The employer’s failure to comply with a posted safety notice was a substantial factor
• Their negligence occurred outside the capacity that qualifies them for the protection

Suing a noncomplying employer. A worker may sue an employer that failed to provide coverage (ORS 656.020). In that suit, the employer may not defend on the grounds that a fellow worker’s negligence caused the injury, that the worker’s own negligence contributed to it (other than a willful act to cause the injury), or that the worker assumed the risk.

Sidenote

Know this...

The exclusive remedy is the employer’s side of the workers’ compensation bargain. The worker gets benefits without proving fault. The complying employer gets immunity from suit for the injury. An employer that fails to provide coverage loses that protection and can be sued, without its usual defenses.

Employment covered (required, voluntary, leased) (ORS 656.017, 656.023, 656.027 to 656.041)

Required coverage. Every employer that employs one or more subject workers in Oregon is a subject employer (ORS 656.023). A subject employer must maintain assurance with the Director that its workers will be compensated, by being carrier-insured or qualifying as self-insured (ORS 656.017). The State of Oregon insures its own employees through SAIF.

All workers are subject workers, except the nonsubject workers listed in ORS 656.027. Among them:

• A domestic servant in a private home, and a worker doing gardening, maintenance or repair at the private home of the person employing them
• Casual employment, meaning work whose total labor cost in any 30-day period is less than $1,000 (the statutory base, adjusted each July 1), when the work is outside the employer’s trade or business, or the employer is itself nonsubject
• A person covered by a federal rule of liability for work injuries
• An interstate transportation worker whose employer has no fixed place of business in Oregon
• Sole proprietors, most partners, LLC members, and corporate officers who are directors with a substantial ownership interest (partners and members of multi-member LLCs doing construction work are generally subject workers; licensed construction and landscape businesses may exempt a limited number of owners)
• Volunteers for nonprofit, religious, charitable or relief organizations, and certain other volunteers
• Foster parents and adult foster care providers, certain newspaper carriers, amateur athletes and sports officials, and owner-operators who own or lease and drive certain trucks (log, aggregate and for-hire carrier vehicles), taxicabs or nonemergency medical vehicles

Voluntary coverage. An employer may elect to make nonsubject workers subject workers (ORS 656.039). A carrier-insured employer elects by filing written notice with its insurer, with a copy to the Director. The election may be canceled by written notice, effective at midnight on the day it is received unless a later date is given. A sole proprietor, LLC member, partner or independent contractor may apply to an insurer to be covered as a subject worker (ORS 656.128). A municipality may elect to cover its volunteers (ORS 656.031).

Contracted labor. A person who contracts out labor that is a normal part of its business must provide coverage for the workers under the contract, unless the contractor covers them before the work begins (ORS 656.029).

Leased workers. A worker leasing company provides workers to a client by contract, for a fee, other than on a temporary basis. It must be licensed by the Director, and must provide workers’ compensation coverage for the leased workers, and for the client’s own subject workers, unless the client has proof of coverage on file with the Director that covers both its own workers and the leased workers (ORS 656.850(3)). The exclusive remedy protects the leasing company and its client when both comply (ORS 656.018(4)). The client of a temporary service provider is not the employer of the temporary workers. Beginning July 1, 2027, Oregon law calls a worker leasing company a professional employer organization (PEO).

Covered injuries and notice (ORS 656.005(7); 656.265)

What is a compensable injury (ORS 656.005(7)). A compensable injury is an accidental injury arising out of and in the course of employment that requires medical services or results in disability or death. It must be established by medical evidence supported by objective findings: verifiable indications of injury, such as range of motion or muscle strength, not complaints that cannot be reproduced, measured or observed.

• A disabling compensable injury entitles the worker to disability or death benefits. An injury is not disabling if no temporary disability benefits are due, unless there is a reasonable expectation that permanent disability will result. A nondisabling injury requires medical services only
• Major contributing cause: a condition that follows from a work injury (a consequential condition) is covered only if the work injury is its major contributing cause. When a work injury combines with a preexisting condition, the combined condition is covered only so long as the work injury remains the major contributing cause of the disability or need for treatment. Accepting a combined or consequential condition does not stop the insurer from denying it later, once the work injury stops being its major contributing cause (ORS 656.262(6)(c))
• Not compensable: injury to an active participant in a fight unrelated to the job; injury from recreational or social activities done primarily for the worker’s own pleasure; and injury whose major contributing cause is the worker’s consumption of alcohol, cannabis or an unlawful controlled substance, unless the employer permitted, encouraged or knew of it

The worker bears the burden of proving that an injury is compensable (ORS 656.266). For a combined condition, once the worker proves an otherwise compensable injury, the employer must prove that the injury is not, or is no longer, the major contributing cause.

The worker’s notice (ORS 656.265). A worker (or beneficiary) must give the employer notice of an accident resulting in injury or death immediately, and no later than 90 days after the accident.

• The notice need not be in any particular form, but it must be in writing and tell the employer when, where and how the injury happened
• It may be mailed to the employer’s last known place of business, or delivered to the employer or to a foreman or supervisor
• Late notice bars the claim, unless notice is given within one year after the accident and the employer knew of the injury, the worker died within 180 days, or the worker had good cause for missing the 90 days
• Failing to use a particular form does not by itself defeat a written claim

The employer must report an accident or claim to its insurer immediately, and no later than 5 days after notice or knowledge of it, and the insurer must accept or deny it in writing within 60 days after the employer has notice or knowledge of it (ORS 656.262).

Occupational disease (ORS 656.802 to 656.807)

An occupational disease is a disease or infection arising out of and in the course of employment, caused by substances or activities the worker is not ordinarily exposed to outside regular work, that requires medical services or results in disability or death (ORS 656.802). It includes:

• Disease caused by dust, fumes, vapors, gases, radiation or other substances
• A mental disorder, sudden or gradual, including a physical disorder caused or worsened by stress
• A series of traumatic events that requires medical services or results in physical disability or death

The worker must prove that employment conditions were the major contributing cause of the disease, with medical evidence supported by objective findings. A mental disorder is compensable only if the employment conditions exist in a real and objective sense, are not conditions generally inherent in every working situation, reasonable disciplinary, corrective or job performance evaluation actions by the employer, or the end of employment or employment decisions that come with ordinary business or financial cycles, the diagnosis is generally recognized, and there is clear and convincing evidence that it arose out of the employment.

Oregon presumes certain diseases occupational for some public safety workers, such as diseases of the lungs or respiratory tract, hypertension and cardiovascular-renal disease in firefighters with five or more years of service whose entry physical showed no such condition.

An occupational disease is treated as an injury (ORS 656.804). The claim must be filed within one year of the later of the date the worker discovered (or reasonably should have discovered) the disease, or the date the worker became disabled or was told by a physician of it (ORS 656.807). The statute makes a claim not filed by then void, and it lists no exception.

Lesson summary

• Oregon’s Workers’ Compensation Law provides benefits regardless of fault, and is the worker’s exclusive remedy against a complying employer (ORS 656.018).
• The exclusive remedy also protects the employer’s insurer, employees and officers, except for willful and unprovoked aggression and a few other cases. A noncomplying employer can be sued and loses its common-law defenses.
• Every employer with one or more subject workers must be carrier-insured (with SAIF or a private insurer) or self-insured (ORS 656.017, 656.023).
• Nonsubject workers include domestic servants, casual labor (under $1,000 in labor cost in 30 days, indexed each July 1) outside the employer’s business, workers covered by a federal rule of liability, sole proprietors and most business owners, and volunteers for nonprofit, religious, charitable or relief organizations (ORS 656.027). An employer may elect to cover them (ORS 656.039).
• A licensed worker leasing company covers the workers it leases unless the client has coverage on file (ORS 656.850).
• A compensable injury arises out of and in the course of employment and is proved by objective findings. A combined or consequential condition must have the work injury as its major contributing cause (ORS 656.005(7)).
• The worker gives written notice immediately, and within 90 days. Late notice bars the claim unless given within one year and an exception applies (ORS 656.265).
• An occupational disease must have employment as its major contributing cause, and the claim is filed within one year of discovery or disability (ORS 656.802, 656.807).