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Unpaid construction wages have caught the attention of Oregon lawmakers, who are taking action to ensure workers get paid even if a company goes out of business.

State Rep. Julie Fahey, D-Eugene, is the chief sponsor of a bill that improves reporting and coordination between two key state agencies, makes it easier for workers to recoup unpaid wages and aims to hold business owners responsible even if they shut it down.

The House and Senate have both passed versions of the bill, which is expected to go to Gov. Kate Brown’s desk soon.

The bill is backed by both industry and labor groups. Supporters include the Associated General Contractors, the Oregon State Building & Construction Trades Council and the Pacific Northwest Regional Council of Carpenters.

鈥淚t really was to address the issue of wage theft in the construction industry,鈥� Fahey said.

The bill followed one Fahey sponsored last year that would have held general contractors liable for subcontractors who fail to pay a valid wage claim. The aim of that bill was to make general contractors 鈥渕ore thoughtful鈥� regarding their choice of subcontractors, Fahey said. The bill passed the House but stalled in the Senate amid opposition from the building industry.

鈥淕eneral contractors were strongly opposed to the idea of imposing liability,鈥� she said.

John Rakowitz, an AGC lobbyist, said the earlier proposal was flawed.

鈥淲hy should one company pay another company’s employees?鈥� he said. 鈥淭hat makes no sense.鈥�

This session, Fahey came back with H.B. 3193 after discussions that began last summer with interested parties, including AGC. The bill tightens and improves upon existing processes rather than imposing new requirements. Fahey got buy-in from both labor and industry.

鈥淚t is in the interest of the industry, of contractors, that everybody gets paid,鈥� Rakowitz said.

Under-the-table worker payment is a perennial issue for Oregon’s trade unions, which argue wage theft and tax fraud undercut legitimate contractors and skilled tradespeople.

鈥淣ot only does it hurt the workers, but it’s really undercutting the entire industry and creating that whole race to the bottom,鈥� said Ben Basom, spokesman for the Pacific Northwest Regional Council of Carpenters.

Wage theft is particularly prevalent in drywall and wood framing, Basom said. Typically, a labor broker will show up with a work crew. The contractor will pay the broker, who will pay workers in cash.

鈥淲e have a large population of Latino workers gravitate toward drywall, and wood framing too,鈥� Basom said. 鈥淭hey seem to be the most vulnerable population.鈥�

Wage theft most often occurs on small and medium-size projects, Basom said. High-rise projects typically use unionized workforces.

Rakowitz pushed back on the concept of wage theft, saying unpaid wage claims can occur for any number of reasons in an industry with a $5.6 billion annual payroll.

鈥淵ou’re going to have mistakes; you’re going to have disputes,鈥� he said. 鈥淵ou’re going to have all kinds of things happen in an industry of that size.鈥�

The Oregon Bureau of Labor and Industries investigates unpaid wage claims. The agency received approximately 1,200 wage claims in 2017, and a large share involved the construction industry.

BOLI sustained 99 wage claims in the construction industry in 2018, the same as the year before, spokesman Saul Hubbard said.

Fahey’s bill makes it easier for the Construction Contractors Board to suspend the license of a contractor after 60 days of nonpayment of a wage claim. BOLI must notify a contractor of an upcoming license suspension.

H.B. 3193 also raises the cap for payments from the state wage accountability fund from $4,000 to $10,000. The fund was established in the 1980s to help timber mill workers, and the cap hadn’t been raised in more than a decade, Fahey said.

The bill also removes bureaucratic barriers to make it easier for workers to recover lost wages from a contractor’s CCB licensing bond.

Finally, H.B. 3193 gives BOLI new tools to pursue wage claims against contractors who close and then reopen under a new business name.

鈥淚t really is intended to address this issue of successor organizations,鈥� Fahey said. 鈥淓ven if they close up shop and open under a new name. 鈥� You still have to pay those wages.鈥�

Separately, BOLI and the CCB have agreed to add verified wage claims to the CCB website.

鈥淚 think that’s a pretty cool change that will actually provide information to consumers and workers and general contractors,鈥� Fahey said.

Meanwhile, Washington this spring enacted a bill to increase fines for wage violations. The bill was signed by Gov. Jay Inslee on May 7 and takes effect on Jan. 1, 2020.

On April 15, trade unions hosted a protest at Director Park in downtown Portland to raise awareness about wage theft. Janet Bauer, a researcher at the Oregon Center for Public Policy, said the construction industry generates the highest number of wage claims by far. She decried cuts to BOLI’s staff that she said have reduced enforcement.

鈥淐learly we need better laws, but we need better enforcement,鈥� she said.

Art Cortez, owner of Cortez Construction in North Plains, said contractors who follow the rules are undercut by cheaper bids from contractors paying workers under the table.

鈥淲hile these people are winning, I’m losing,鈥� he said.