A bill is moving through the Oregon Legislature that aims to combat wage theft by allowing unrepresented construction workers to sue property owners and contractors for unpaid work — not just the subcontractor who pays them directly.
Lawmakers in the House Committee on Labor and Workplace Standards voted along party lines Monday to send Senate Bill 426 to the floor of the Oregon House of Representatives. Oregon Senators already passed the bill 18-11 in April. The bill would also allow the state’s Attorney General to file such lawsuits on behalf of unpaid workers.
As Oregon seeks to fix an ongoing housing crisis, the bill has emerged as one of the most contentious pieces of construction legislation during this year’s session, sparking partisan debate. Among the bill’s proponents are powerful unions like Oregon AFL-CIO, which represents more than 300,000 workers. Its opponents include business leaders and groups representing realtors, developers and contractors.
Supporters argue lawmakers should pass the bill to curb the rising problem of wage theft, or when an employer does not pay an employee what they have earned, violating the law or a contract. They say this problem disproportionately affects vulnerable people, including immigrants, who comprise a sizable chunk of the industry’s workers.
“It has exploded,” Trampas Simmons, lead representative for the Western States Regional Council of Carpenters Local 503, which represents Oregon carpenters, said of the problem of wage theft. “Oregon is becoming the new playground for the bad guys.”
Opponents argue that the threat of litigation from workers could slow construction and increase the cost of business at a time when state leaders are pushing for more housing. They say the bill does not target the bad actors who are engaging in wage theft and could harm people who don’t know it’s happening.
“In my more than 20 years in this building, this is one of the worst construction-related bills I have ever seen,” said Scott Barrie, a longtime lobbyist for the Oregon Home Builders Association. He added, “It would absolutely bring housing production to a trickle, and we’re already a difficult state to build in.”
Collectively, Oregonians lose millions of dollars each year due to wage-related violations, which could include anything from inadequate compensation to not being paid overtime, according to the Oregon Bureau of Labor & Industries. In addition, the number of wage-related claims for relief filed with the state increased roughly 200% from 2020 to 2024.
The bill is backed largely by Democrats, including Sen. Floyd Prozanski, D-Eugene, but was also sponsored by Rep. Greg Smith, R-Heppner, and received a yes vote from Sen. Suzanne Weber, R-Tillamook.
Attorney General Dan Rayfield and the Oregon Department of Justice support the bill. In a letter, the agency acknowledged that wage theft claims to the state have “risen sharply in recent years” to nearly 3,500 per year, “more than doubling their average claims in the preceding seven years.”
“Providing the Attorney General this enforcement ability is an additional tool in the toolbox to ensure that workers are paid the wages they are owed,” wrote Leslie Wu, a policy advisor for Rayfield. “In addition to that tool, SB 426A provides Oregonians with the power to ensure accountability in their own workplaces. Both are necessary to combat the pervasive problem of wage theft and labor trafficking in the construction industry.”
Republicans are largely against it. Following a work session Monday, Rep. Lucetta Elmer, R-McMinnville, said in a statement that amendments that Republicans intended to improve the bill “were voted down along party lines.”
“I firmly believe this legislation will result in devastating lawsuits against Oregon businesses and property owners who did nothing wrong,” Elmer said. “There are better ways to target these bad actors, as I believe our amendments showed today. We will continue advocating for policy that gets to the heart of this issue.”
Kirsten Adams, the head lobbyist for the Oregon-Columbia chapter of the Associated General Contractors, says she fears the bill could have a larger impact on smaller, “homegrown” construction companies that are often a central part of development in rural communities. Adding regulations to those companies can be difficult, especially for those that are not well known and are seeking contracts.
“These smaller businesses are trying to survive, or hopefully thrive in smaller communities,” said Adams. “And if you have something that’s stacking the deck against them it makes it harder for them to stay in business.”
But advocates like Simmons, of the carpenters union, say the issue of wage theft is pervasive and expensive. He says the union receives complaints involving people who have been trafficked into Oregon from other states for work, sometimes waiting weeks or months before being paid. He says the problem has grown so bad that the union has taken lawmakers out to work sites and introduced them to workers who haven’t been paid.
“These workers that are being trafficked are left holding the bag, making ends meet,” said Simmons. “And they become a burden. The only way they can eat or (get) services is by utilizing the safety net programs in the community that they’re currently in.”
He and other advocates insist that the bill wouldn’t slow down the pace of housing production significantly, and that expanding liability is necessary to ensure that contractors are aware of who they hire.
“We all want affordable housing, but if it’s being built cheaply because workers aren’t being paid, I don’t think anyone wants that,” said Kate Suisman, an attorney and lobbyist for the Northwest Workers’ Justice Project, which supports the bill.
She added, “Take a few more days to do your investigation about who you’re hiring and who you’re paying hundreds of thousands of dollars to. Take a little more time up front instead of the workers suffering on the back end. I think it’s just common sense.”
The bill does not yet have a floor session scheduled.