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Oregon’s Bureau of Labor and Industries has the right to collect wages from employers that close and reopen as the same type of business, according to the Oregon Supreme Court.

The court’s ruling in Blachana v. BOLI last week impacts what is called a “successor in interest” rule. A business that closes and then reregisters under a different name still owes debts if it is doing the same type of business as before, Labor Commissioner Brad Avakian said.

The state has many cases where businesses have done that, Avakian said, noting that construction is one industry that could be impacted by the ruling.

“It’s a very important case … for protecting workers, but also for protecting contractors that do follow the rules and meet their obligations,” he said. “We want to make sure there are not bad contractors out there competing unfairly by shutting down and not paying their workers.”

The state has a wage security fund, which is filled by a percentage of employer taxes. Employees who lose their jobs are paid up to $4,000 compensation for lost wages if their employer closes, he said.

But BOLI has sought to recover those losses to the fund from businesses when they reopen under different names.

The ruling overturned an earlier Oregon Court of Appeals decision that determined only legal successors to businesses would be required to pay former employees.