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Some construction contractors could lose their licenses and their livelihoods if House Bill 2540 were to pass, state Rep. Paul Holvey, D-Eugene, said.

That’s good, he added.

The bill would crack down on contractors who finagle their payrolls so they (or their workers) can avoid alimony, child support, wage garnishments and similar obligations.

The problem is more common than people think, said Bradley Cook, who owns Huckleberry Fence and Deck Co. in Eugene.

“This is an epidemic that is going on out there, and no one knows about it, and contractors are chalking it up as a cost of doing business,” he testified before the House Business and Labor Committee during a public hearing on Friday.

Holvey’s bill would give the Construction Contractors Board the power to revoke, suspend or refuse to renew the licenses of contractors evading – or helping others evade – their legal obligations.

“It’s very difficult to get a handle on this particular arena,” Holvey said.

Contractors sometimes pay people in cash, he said, so that workers don’t have bank accounts that ex-spouses and other creditors can siphon. This harms the workers too, he added, because people paid in cash often are paid less.

“Someone may correct me on this, but as far as I know, it’s not illegal to pay in cash,” Holvey said. “It is illegal not to pay your taxes. It’s also illegal to … dodge these sorts of obligations.”

There are other ways people dodge their creditors, particularly for child support, Cook testified. He recalled an instance a few years ago when, desperate for a qualified construction worker, he found an extremely experienced applicant through Oregon’s Preferred Worker Program.

The program matches employers with qualified Oregon workers who have permanent disabilities from on-the-job injuries.

“We couldn’t believe someone with this wealth of experience would drop into our laps,” Cook said.

It turns out there was a reason the man was so experienced. He switched construction companies multiple times a year, each time asking his employer to report on child support deductions only once a quarter.

Once the report was made, the worker would move on.

“Before you’re exposed to these angles, you can’t imagine the lengths people will go to cheat the system,” Cook said.

Holvey said it boggles the mind.

“There’s been a lot of things I have heard about and actually seen in the construction world,” he said.

The bill also elaborates on the definition of “construction debt” to include unpaid wages. Holvey said this is a vitally needed change in statute. The current law provides a nasty loophole for unscrupulous contractors, he added.

“The CCB has the ability to put restrictions on licensees if they’re not paying their debts, but right now, the CCB can’t refuse to provide them a license even when they have a history of not paying their workers,” Holvey said.

Craig Smith, administrator of the contractors board, said CCB officials are officially neutral on the bill. However, he said, his agency has an intense interest in being able to hold unethical contractors accountable for their actions.

“The cost of complying with state regulations is significant (for contractors),” he said. “Contractors need a level playing field.”

State Rep. Jim Weidner, R-Yamhill, asked if the bill could enable the CCB to pull the licenses of contractors who hired undocumented immigrants.

“That may already be included in the language of the bill relating to state and federal income tax laws,” Holvey responded. “I can’t really speak to whether or not this bill would cover that scenario. It may or may not. I don’t know.”

Holvey said the bill boils down to basic justice.

“When we have a habitual lawbreaker, we ought to be able to say you’re not a contractor anymore,” he said.

BILL STATUS: After closing the public hearing, committee members took no further action on House Bill 2540. Next, during a work session, the bill will be killed, referred to another committee or sent to the House floor for a vote.