Lawmakers Seek to Crack Down on Wage Theft in Construction

A bill pending in Salem would make general contractors financially responsible for their subcontractors.

slabtown Slabtown Square construction site. (Aaron Mesh)

BILL OF THE WEEK: House Bill 2057

Wage theft is a big issue in this state. For more than a decade, the Oregon Center for Public Policy has railed against the practice—which can include employers making people work for free, stealing their tips or forcing them to work overtime without proper pay.

The think tank found that workers filed claims with the state for $50 million in stolen wages between 2006 and 2021. The Oregon Bureau of Labor & Industries determined most of those claims to be valid, yet the center found that BOLI forced thieving employers to pay penalties in just 1% of cases.

“The fact that employers risk little when they violate labor law exacerbates the problem of wage theft in Oregon,” OCPP concluded.

CHIEF SPONSOR: This is a committee bill, introduced by the House Business and Labor Committee at the request of the Northwest Carpenters Union.

PROBLEM IT SEEKS TO SOLVE: Although some instances of wage theft involve labor-intensive industries such as hospitality and agriculture, this bill focuses on construction contractors who exploit undocumented or otherwise vulnerable workers in trades such as carpentry, sheetrocking and painting. Crooked contractors often pay in cash to avoid documentation and withholding taxes.

The bill would hold contractors responsible for their subcontractors’ failure to pay wages to workers and would allow employees owed money to sue for up to six years after wages were due. Putting the onus on general contractors, who tend to be more established and financially substantial, proponents say, would increase workers’ chances of getting paid fairly.

WHO SUPPORTS IT: Organized labor and progressive groups.

“I encounter wage theft on a weekly basis at the job sites we visit,” testified Eric Morgan, a representative of the Northwest Carpenters Union. “Cash payments, nonpayment and misclassification of workers are some of the tactics that unfair contractors use to undermine the bidding process of contractors that play by the rules. They continue to do this knowing that all they will get, if caught, is a slap on the wrist.”

Oregon Law Center noted that construction sites rely on transient workers and complex layers of contractors. “The tiers of employment make it difficult for workers to reclaim unpaid wages because each tier is free from any liability to the next,” Oregon Law Center’s Martha Sonato testified, adding that wage theft “disproportionately impacts low-wage workers, women, people of color, and immigrant workers.”

WHO OPPOSES IT: Associated General Contractors, which represents the state’s largest contractors. Several other business groups panned the bill as well. All the opponents say they condemn wage theft but question whether this is the right fix.

“House Bill 2057 does not take a targeted approach at the bad actors, or at making the workers whole,” said AGC’s Kirsten Adams. “There is nothing in the bill that would require knowledge on the general contractor’s part that the subcontractor wasn’t paying. Thus, a general contractor will be penalized for something they didn’t know about.”

Derek Sangston, a lobbyist for Oregon Business & Industry, which represents 1,600 employers, testified that the bill is redundant, noting, “There are already ways under existing law for those employees to receive the wages they are owed by those employers.”

The bill remains in the House Business and Labor Committee.

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