Oregon Senate Bill SB426

Oregon 2025 Regular Session

• Introduced: 1/13/25
• Refer: 1/17/25
• Report Pass: 4/2/25
• Engrossed: 4/10/25
• Refer: 4/15/25
• Report Pass: 5/23/25
• Enrolled: 5/28/25
• Passed: 6/9/25
• Chaptered: 6/20/25
• Passed: 6/20/25

Caption

Relating to wages.

Summary

SB 426 creates a new set of wage-protection rules for construction projects in Oregon. It makes an owner who hires a direct contractor jointly and severally liable, along with the direct contractor, for unpaid wages, fringe benefit contributions, penalties, interest, damages, attorney fees, and costs owed to unrepresented employees of the contractor or any subcontractor tier working on the project. The bill defines key terms such as owner, direct contractor, subcontractor, construction contract, and unrepresented employee, and it creates a rebuttable presumption that workers on covered projects are employees unless they qualify as independent contractors under Oregon law. The bill also authorizes unpaid-wage claims to be brought by the affected worker, an authorized third-party representative, or the Attorney General acting on assigned claims. Before suing an owner or direct contractor, the claimant must give written notice and allow 21 days to cure the alleged violation; if the violation is corrected in that period, suit against the owner or direct contractor is barred. Claims must be filed within two years, and agreements waiving or shifting this liability are invalid. The bill excludes projects on a principal residence or on property with five or fewer residential or commercial units, and it preserves rights under collective bargaining agreements.

Impact

SB 426 amends Oregon wage law by adding new construction-industry enforcement provisions to ORS chapter 652. It expands potential liability beyond the direct employer to owners and direct contractors on covered construction projects, requires subcontractor recordkeeping and disclosure on payroll and worker classification, and allows withholding of payment in limited circumstances when an owner or direct contractor has paid wages on a subcontractor’s behalf. It also gives the Bureau of Labor and Industries rulemaking authority and authorizes the Attorney General to enforce assigned claims.

Sentiment

The bill appears to have had mixed but ultimately sufficient support. It passed the Senate and House after amendments, with several close votes and some failed House procedural motions to refer, rerefer, or substitute a minority report. The final floor votes suggest a divided chamber, but enough members supported the measure to send it through concurrence and enrollment. Overall, the pattern indicates support from proponents of stronger wage enforcement and worker protections, alongside notable opposition from members concerned about the bill’s reach and effects on construction contracting.

Contention

The main points of contention are the bill’s expansion of liability to owners and direct contractors, the presumption that workers are employees unless proven otherwise, and the recordkeeping and disclosure requirements imposed on subcontractors. Opponents likely objected to the risk of increased costs, administrative burden, and exposure to claims for project owners and contractors, especially on larger construction projects. Supporters appear to have emphasized wage recovery, accountability in subcontracting chains, and protections for workers who are not covered by a collective bargaining agreement or union representation.