Developers, owners, and contractors would all be wise to take note of Senate Bill 426, currently under consideration in the Oregon legislature.

SB 426 addresses wage theft in the construction industry.  If enacted, it would impose joint and several liability on the owner and prime contractor for unpaid employee wages – including fringe benefits and penalties – owed by a subcontractor at any tier.

Supporters of SB 426 argue that the proposed legislation addresses the power imbalance between construction workers and their employers.  By making owners and prime contractors jointly liable for unpaid wages, SB 426 would incentivize them to ensure that those they hire pay their workers.

Opponents of SB 426 argue that it will not prevent wage theft because it seeks to punish innocent parties – owners and prime contractors – rather than the bad actors responsible for the unpaid wages.  They argue that better solutions include fully funding the Bureau of Labor Industries, the state agency tasked with handling wage claims and enforcing labor laws, and enacting legislation targeted toward punishing the actual wrongdoers like labor brokers, who are regulated at a lower level than contractors.

A recently proposed amendment would limit liability to owners or prime contractors who knew or should have known of the unpaid wages.

SB 426 is currently in consideration by the Senate Committee on Judiciary.

There is nothing that owners or contractors need to do from a contractual or operations level unless and until SB 426 becomes law.  But all interested parties would be well advised to track the proposed law as it makes its way through the legislative process.  If you’d like your voice to be heard, developers, owners, and contractors might also consider contacting their state senator or a member of the Senate Committee on Judiciary to communicate their opinion on SB 426.