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Legislation that would hold general contractors responsible for wage theft committed by subcontractors survived a narrow vote Monday in the Oregon House of Representatives.

House Bill 4154 was approved by a 31-26 margin, with three members excused. The bill would require general contractors to cover unpaid wages, benefits and other contributions due to the employees of subcontractors if the general contractor has not paid the subcontractor in full and there is a valid claim against the subcontractor pending before the Oregon Bureau of Labor and Industries. The bill would also allow BOLI to enforce wage claims against contractors as if they were the subcontractor at fault. At the same time, it would allow the contractor to pay BOLI the amount due and withhold subsequent payment to the subcontractor until certain requirements are met.

The measure has received nearly equal measures of support and opposition, with labor and industry groups taking predictable sides.

鈥淭his bill does nothing to get at the real problem of wage theft,鈥� Rep. Greg Barreto, R-Cove, stated in testimony submitted Feb. 23 on the House floor. The construction industry, he explained, vigorously opposes wage theft. At the same time, he said, wage disputes are in need of arbitration rather than a one-size-fits-all prescription.

鈥淭he shift in liability,鈥� Barreto said, 鈥渃ould substantially limit smaller or newer contractors’ ability to compete in the market. Because of the shift in liability, general contractors would likely be forced to require subcontractors to obtain bonds or other protections that can be difficult for newer or smaller contractors to afford and obtain.鈥�

Labor groups, however, said that such bonding should already be done by subcontractors.

鈥淎 significant problem that we often see in the construction industry is use of multiple tiers of subcontractors,鈥� D. Michael Dale of the Northwest Workers’ Justice Project testified Feb. 9. 鈥淥ur clients are often formally employed by the subcontractor at the bottom of the tier, who is frequently undercapitalized and may fall behind on wage payments. This bill would help to assure that the ultimate beneficiary of a worker’s labor assures payment if the agents it chooses do not pay their workers.鈥�

If contractors complain about their liability, Dale added, there already is legislation in place requiring licensing and bonding via BOLI for certain construction contractors.

鈥淏y simply using a licensed subcontractor,鈥� he said, 鈥渁 contractor can be assured that it is dealing with a responsible party, and that there would be a bond provided by the subcontractor in place to guarantee payment of wages.鈥�

HB 4154 has moved to the Senate for further consideration.