Surety Bond Encyclopedia

Labor Contractor Wage Payment Bond - Statewide in Oregon

Brief Summary

The amount you need depends on headcount, not on revenue. Oregon labor contractors with 20 or fewer employees post $10,000. At 21 employees the figure jumps to $30,000, although a contractor with a clean record of two or more years can ask the Labor Commissioner to bring it down. A surety bond keeps that money in your business instead of sitting on deposit with the state.

ORS 658.415 requires every Oregon labor contractor to file and keep in force proof that it can promptly pay its workers' wages. That proof is a surety bond, a cash deposit or a cash equivalent of $10,000 for up to 20 employees, or $30,000 for 21 or more. The bond is payable to the Commissioner of the Bureau of Labor and Industries and covers unpaid wage claims and certain unpaid advances.

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How to Apply for a Labor Contractor Wage Payment Bond:

Count your employees to find your tier: 20 or fewer, or 21 or more.
Decide between a surety bond, a cash deposit or a cash equivalent.
If you have two or more years of clean licensed operation, ask BOLI whether a reduced amount under ORS 658.416 is available.
Obtain a bond from a surety licensed to do business in Oregon, payable to the Commissioner of the Bureau of Labor and Industries.
Submit the bond with the labor contractor license application.
Keep the bond continuously in force and raise it if your headcount crosses into the higher tier.

Detailed Information About the Oregon Labor Contractor Wage Payment Bond:

Which tier you are in

ORS 658.415(3) sets two amounts. A labor contractor that employs no more than 20 employees posts $10,000. A labor contractor with 21 or more employees posts $30,000, or a lesser sum the commissioner authorizes under ORS 658.416.

Lowering the $30,000 figure

ORS 658.416 lets the Commissioner of the Bureau of Labor and Industries reduce the bond for a contractor that has operated as a licensed Oregon labor contractor in compliance with the labor contractor laws and has had no valid claims for unpaid wages. The floor depends on how long the contractor has operated that way:

At least two years: $27,500
At least three years: $25,000
At least four years: $22,500
At least five years: $20,000

The reduction is discretionary. It is not automatic.

Who this applies to

ORS 658.405 defines a labor contractor as a construction labor contractor, a farm labor contractor or a property services contractor. Property services covers businesses that supply workers for janitorial services, among other work.

A property services contractor can skip the bond entirely under ORS 658.415(6) if it carries general liability insurance in an amount the commissioner sets by rule and, within the preceding two years, has not violated ORS chapter 652 or 653 or committed an unlawful employment practice under ORS chapter 659A.

What the bond pays

Under ORS 658.415(17) the bond is payable to the commissioner and is conditioned on payment in full of all sums due on employee wage claims. It also covers sums the labor contractor owes to a construction property owner, a grower or producer of agricultural commodities, or a timberland owner or lessee for advances made to or on behalf of the contractor.

Eligibility and Requirements for a Oregon Labor Contractor Wage Payment Bond:

Bond amount of $10,000 for up to 20 employees, or $30,000 for 21 or more.
Corporate surety bond from a company licensed to write it in Oregon.
Commissioner of the Bureau of Labor and Industries as the payee.
Coverage of employee wage claims and of advances owed to property owners, growers or timberland owners.
Property services contractors exempt only with qualifying liability insurance and a clean two year record.

Oregon Labor Contractor Wage Payment Bond FAQs:

How much bond do I need?

$10,000 if you employ no more than 20 employees. $30,000 if you employ 21 or more, unless the commissioner authorizes a lower amount under ORS 658.416.

Can the $30,000 bond be reduced?

Yes, at the commissioner's discretion, if you have operated as a licensed Oregon labor contractor in compliance with the law with no valid unpaid wage claims. The lowest amounts are $27,500 after two years, $25,000 after three, $22,500 after four and $20,000 after five.

We are a janitorial staffing company. Do we need the bond?

Property services contractors can be excused if they carry general liability insurance at the level the commissioner sets by rule and have not, in the preceding two years, violated ORS chapter 652 or 653 or committed an unlawful employment practice under ORS chapter 659A.

Can I deposit cash instead?

Yes. ORS 658.415(3) accepts a corporate surety bond, a cash deposit or a deposit that is the equivalent of cash.

Who can make a claim?

The bond is payable to the commissioner. It answers for unpaid wage claims of your employees and for advances you owe a construction property owner, grower or timberland owner or lessee.