FILE: Two construction overseers consult each other on the Modera Woodstock residential and retail building construction site on July 7, 2023. The development included 194 housing units, retail spaces, and a parking garage.
Caden Perry / OPB
Unrepresented construction workers can sue property owners and general contractors for unpaid work under a law that passed through the Oregon state House on Wednesday.
House lawmakers voted 31-26 to pass Senate Bill 426, allowing workers to go to court to recover lost wages not just from the subcontractors who pay them directly, but from the property owners and general contractors “at any tier.” It also allows the state’s Attorney General to file such lawsuits on behalf of unpaid workers.
The vote came at the end of a lengthy debate on the House floor over one of this year’s most contentious construction bills.
Proponents — mainly Democrats — say the bill is a step toward addressing a rising problem facing vulnerable, low-income workers: wage theft, or when employers violate the law or a contract by not paying an employee what they’re owed.
“For these workers, not receiving their full wages is not just an inconvenience,” said Rep. Lesly Muñoz, D-Woodburn. “It’s a crisis. They have no cushion, and missing even one paycheck can mean falling behind on bills, facing eviction or going hungry.”
Backed by some of Oregon’s largest unions, the bill’s supporters say it improves accountability among property owners and general contractors by encouraging them to vet subcontractors and ensure they aren’t hiring bad actors.
“There’s a dirty little truth that everybody knows but no one wants to say out loud: Our economy depends upon cheap labor,” said Rep. Paul Evans, D-Monmouth. “And while a lot of contractors do not wake up every day and say, ‘How am I going to screw somebody today?’ I do believe that in some cases maybe they just don’t ask questions of subcontractors that they don’t want to know.”
The vote followed stiff pushback from Republicans, who attempted to change the bill by excluding property owners from liability and referring it back to a legislative committee for further discussion. In addition, Republicans called for legislation to improve the Bureau of Labor & Industries, which takes wage-related complaints but is hampered by staffing problems and faces a backlog of claims.
Opponents say the bill doesn’t target the criminals and human traffickers who stiff workers, but mainly small business owners who don’t know it’s happening, stifling competition and making it harder for businesses to get up and running.
“I agree that wage theft is a serious problem that we must address,” said Rep. Daniel Nguyen, D-Portland, who opposed the bill. “But I do not agree that this bill is the way to tackle the problem. Not only will this increase the cost to enforce another law on the books, it will also increase barriers for construction firms big and small. And honestly, it’s mostly the small ones.”
The opponents — including business leaders and groups representing realtors, developers and contractors — fear the threat of litigation could increase costs and slow production at a time when Oregon desperately needs more housing. Rep. Lucetta Elmer, R-McMinnville, said the bill “only targets open shop contractors.”
“Unions exempt themselves from the negative impacts of this bill,” said Elmer. “It punitively targets open shop contractors under the false pretense that it will fix the exploitation of undocumented workers. But it does nothing to address a nationwide trend of unregistered labor brokers run by cartels from exploiting undocumented workers, despite the focus of this during testimony.”
In a statement Wednesday, House Democrats said the bill “does not apply to homeowners constructing or remodeling their primary residence.”
The amended bill passed through the Senate on Thursday. It now heads to Gov. Tina Kotek’s desk for approval.
Correction: A previous version of this story stated that the bill was headed to Gov. Kotek on Wednesday. The bill was amended in the House and passed through the Senate again on Thursday. It now heads to the governor.
