Oregon’s prevailing wage rate law, sometimes referred to as the “Little Davis Bacon Act,” has been in place in some form since 1959. Under the law, contractors that perform work on “public works” projects are required to pay workers at least the prevailing wage rate as determined by the Oregon Bureau of Labor and Industries (BOLI). A public works project is any project administered by a public agency that costs more than $50,000 or that uses at least $750,000 of public agency funding.

Previously, and with some narrow exceptions, prevailing wage was required only for work performed on the project site. However, starting July 1, 2026, contractors that work on public works projects in Oregon will now be required to pay prevailing wage for certain off-site bespoke work. This shift is the result of House Bill 2688, which was adopted by the Oregon Legislature during the 2025 session and signed into law by Gov. Tina Kotek on July 31, 2025.

Specifically, HB 2688 expanded the definition of “public works” to include “fabrication, assembly, preconstruction or construction that is: (i) bespoke; (ii) performed offsite; (iii) performed specifically for, and in accordance with the specification of, a (public works project); and (iv) performed on (certain systems and components).” Examples of the systems and components referred to in the bill include mechanical systems, such as HVAC systems; electrical systems; ornamental and structural ironwork; and masonry and plaster systems or components. Contractors are encouraged to consult the full list of systems and components covered by HB 2688, as it was drafted to encompass a wide range of components that may be fabricated off-site and then transported and installed on the project site.

During the legislative session, proponents of the bill, including many of the state’s trade unions, argued that expanding the prevailing wage to off-site work would close a loophole that allowed nonunion contractors to avoid paying the prevailing wage by using off-site prefabrication. Cities, counties, and other municipalities opposed the bill. While the trade unions argued that savings from off-site fabrication were not passed on to customers and taxpayers, the Association of Oregon Counties stated that “applying prevailing wage rates across such a wide range of essential purchases will increase costs and complexity so significantly that it may delay, postpone, or cancel road maintenance and safety improvement projects.”

The League of Oregon Cities also described the added burden placed on public entities by HB 2688. It specifically noted that “local governments have no ability to track or enforce whether a manufacturer is paying local prevailing wage, particularly if that manufacturer is out of state or international.” This additional burden would be time-consuming and costly, impacting the ability to finish projects that involve parts procured outside Oregon or in rural areas of the state.

Despite the passage of the bill, several questions remained unanswered regarding the scope of the new prevailing wage requirements and how they will be enforced. While HB 2688 limits prevailing wage to off-site fabrication, assembly, or bespoke preconstruction, the legislature did not define the term bespoke. This issue was raised by opponents of the bill, and it appears that BOLI is undertaking rulemaking to clarify the term.

Under BOLI’s draft rules, “bespoke” would mean “work that is performed according to individualized specifications that are contained in a public works contract.” The draft rule also specifically excludes from the definition of “bespoke” work that is performed before issuance of a public works solicitation, manufactured or modular buildings, as well as the creation or application of concrete, asphalt, paint, and certain art. Based on this proposed definition, it appears BOLI intends to limit prevailing wage requirements to off-site work that is custom-made according to specifications unique to a particular project.

While more clarity regarding the scope of the new prevailing wage requirements appears to be forthcoming in the next couple of months, enforcement of these requirements remains an open question. As opponents of the bill pointed out, how would a public entity enforce prevailing wage requirements at off-site locations in rural parts of the state, or, more particularly, at off-site locations in other states or countries? While BOLI likely has jurisdiction to enforce prevailing wage rates throughout Oregon, it is unclear whether BOLI can enforce prevailing wage on work performed outside of the state. Washington state has a similar requirement for prevailing wage payments at off-site locations. However, the attorney general in Washington had previously issued an opinion stating that the state could not determine the prevailing wage for work performed outside of the state.

During the legislative session, legislative counsel acknowledged that the bill contains nothing that describes how its requirements would apply to work outside the state. Assuming the bill’s requirements cannot apply to off-site work performed outside Oregon, they may put Oregon contractors at a competitive disadvantage. Oregon public contracting law requires public agencies to award projects to the lowest bidder. However, if BOLI is unable to enforce HB 2688 against out-of-state and international manufacturers, it will disadvantage Oregon manufacturers, which will be forced to pay prevailing wage while their competitors are not.

The draft rules from BOLI do not currently address this lingering issue, and it remains to be seen how BOLI will enforce the law when it becomes effective. As a result, contractors are encouraged to consult with their attorneys ahead of July 1 to evaluate which projects and scopes of work may be subject to the law’s new requirements.

Josh Dennis is a Schwabe, Williamson & Wyatt shareholder. He focuses his practice on real estate and construction. Contact him at 503-796-2985 or jdennis@schwabe.com.

This column is intended to provide readers with general information and not legal advice. Consult professional counsel for help regarding specific situations.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the author and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither the author nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

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On March 8, 2023, the Oregon Senate passed Senate Bill 592, which, if passed by the House and signed by the governor, would significantly increase the penalty amounts that the Oregon Occupational Safety and Health Division (Oregon OSHA) could impose on an employer for workplace safety violations. In addition, SB 592 would require Oregon OSHA to conduct comprehensive inspections of a workplace under specific circumstances, greatly expanding the number of inspections that an employer could face.

Following is a discussion on the current law with respect to Oregon OSHA penalties and inspections, and how it would change under SB 592.

A violation of a workplace safety rule is classified by Oregon OSHA as one of the following: other-than-serious; serious; willful; or repeat. The classification of the violation establishes the potential range of monetary penalties that can be assessed. A base penalty within those ranges is then calculated by evaluating the probability and severity rating of each violation.

Currently, for other-than-serious violations, an employer may be assessed a penalty of not more than $13,653, per violation, with the possibility that the violation could have a $0 penalty. For serious violations, an employer may be assessed a penalty of not less than $100 and not more than $13,653. If the violation is also classified as a repeat violation (i.e., it is an employer’s second or subsequent violation involving a substantially similar violation within the past three years), an employer may be assessed a penalty of between $200 and $135,653. Finally, for willful violations, an employer may be assessed a penalty of not less than $9,753 and not more than $135,653. There is currently no increase in penalty amount if the violation is found to have caused or contributed to the death of an employee.

Under the version of SB 592 passed by the Senate, the upper and lower ranges of penalties would be increased across the board. Serious violations would be assessed a penalty of not less than $1,116 and not more than $15,625. Further, if the serious violation were found to have caused or contributed to the death of an employee, that penalty amount would increase to not less than $20,000, and not more than $50,000.

For other-than-serious violations, an employer could be assessed a penalty of not more than $15,625, per violation. The penalty range for willful or repeat violations not found to have caused or contributed to the death of an employee would increase to not less than $11,162 and not more than $156,259. However, if a willful or repeat violation were found to have caused or contributed to the death of an employee, an employer could be assessed a penalty of not less than $50,000 and not more than $250,000.

In addition to those increased penalty amounts, for willful violations or serious violations resulting in a work-related fatality, an employer would no longer be entitled to a penalty adjustment based on employer size. Further, SB 592 would eliminate the current law that allows for repeat violations only if the same or similar violation occurred within the previous three years. Rather, under SB 592, Oregon OSHA could review an employer’s entire history to determine whether a repeat violation has occurred.

SB 592 would also expand Oregon OSHA’s authority to conduct comprehensive inspections of workplaces in the state. When an Oregon OSHA compliance officer arrives at a place of employment for an inspection, that inspection would either be a “comprehensive inspection” or a “partial inspection.” A “comprehensive inspection” would be a substantially complete and thorough inspection of all potentially hazardous areas of the establishment, and include review of all required safety and health programs, whereas a “partial inspection” would be limited to certain potentially hazardous areas, operations, conditions, or practices at the establishment. Currently, comprehensive inspections are typically conducted only as part of a “programmed” inspection that has been scheduled from a list. Additionally, an establishment will not receive more than one comprehensive inspection within 36 months of its last comprehensive inspection.

Under SB 592, whenever an accident investigation (which would likely be a partial inspection) reveals that a violation has caused or contributed to a work-related fatality, Oregon OSHA would be required to conduct a comprehensive inspection within one year. The proposed bill would also provide Oregon OSHA with discretion to conduct a comprehensive inspection “based on the prior violation history of the place of employment.” No longer would an employer be exempt from multiple comprehensive inspections in a three-year period.

Ultimately, SB 592 would result in an across-the-board increase in the amount of penalties that can be assessed by Oregon OSHA. It would also subject employers to additional comprehensive inspections where previously they might have been exempt. Notably, Oregon OSHA has not yet taken a position on SB 592, and it is unclear whether the agency would have sufficient resources to conduct the additional required comprehensive inspections as well as continue its present level of enforcement efforts.

SB 592 now heads to the House and, if passed, would need to be signed by the governor before taking effect. As currently drafted, SB 592 would be effective on passage.

Josh Dennis is a shareholder at Schwabe, Williamson & Wyatt PC. Contact him at 503-796-2985 or jdennis@schwabe.com.

This column is intended to provide readers with general information and not legal advice. Consult professional counsel for help regarding specific situations.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the authors and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. None of the authors nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

The post An Oregon OSHA effect to be aware of if state bill becomes law | OP-ED appeared first on Daily Journal of Commerce.

When faced with an OSHA citation, it is not uncommon for an employer to acknowledge that a rule was violated, accept the citation, pay the penalty, and move on. Often, evidence that a rule was violated is easily obtained by an OSHA inspector. For example, an OSHA inspector may arrive on a jobsite and, before even opening an inspection, photograph an employee working on an elevated surface without fall protection or witness an employee not wearing the proper personal protective equipment (PPE).

An employer may see the inspector’s photos and think this is an open-and-shut case and accept the citation. Depending on the employer’s circumstances, that can be a mistake. While the penalties for a single citation may be relatively low, those penalties can multiply quickly for repeat violations. Multiple OSHA citations on a company’s record may make it difficult for the company to bid on certain types of work or maintain certain customer contracts.

Moreover, accepting and paying a citation simply because a rule was violated ignores the other elements that OSHA must prove to issue a citation. These elements include the applicability of the cited code, whether the violation created a hazardous condition, whether an employee was exposed to that hazardous condition and, finally, employer knowledge. A citation cannot be upheld when just one of those elements is missing. In addition to the elements that OSHA must prove, an employer may attempt to prove certain defenses even if each element is present. One of those defenses is the unpreventable employee misconduct defense.

For employers with robust safety and health programs, the unpreventable employee misconduct defense can be an extremely useful tool if an employee goes rogue and is caught by an OSHA inspector. Even companies deeply committed to safety might see an employee forget to put a tag on a piece of de-energized equipment or enter a trench without adequate shoring. In these instances, the employer will make a plea to the inspector that it did everything in its power to avoid the violation and, for that reason alone, should not be issued a citation. But, while inspectors appreciate an employer’s commitment to safety, those pleas alone will not establish the unpreventable employee misconduct defense.

An employer asserting an unpreventable employee misconduct defense must prove that it has:

1, established work rules designed to prevent the violation,

2, adequately communicated these rules to its employees,

3, taken steps to discover violations, and

4, effectively enforced the rules when violations have been discovered.

To prove element no. 1, an employer must have a specific rule or policy that prohibits the conduct that constitutes the alleged violation. Typically, this takes the form of a written accident prevention program or a job specific safety plan that is easily accessible to all employees. Employers must train employees on those rules and, to meet the second element of the defense, be able to prove that the employee who committed the violation received that training. Such evidence may consist of sign-in sheets for each safety meeting listing the date, covered topics, and employees in attendance.

It is common that an employer, although able to prove the first two elements, lacks documentation sufficient to establish the latter two elements. Taking steps to discover violations may be accomplished through regular safety audits of the workplace that are designed to discover safety violations. For purposes of the unpreventable employee misconduct defense, it can be to the employer’s benefit if the audit process identifies violations, which the employer corrects. Not only does this create a safer workplace, but evidence that some violations were found and corrected may be more credible to an OSHA inspector than suggesting that no issues were identified.

Finally, an employer must show that it effectively enforced the rules when violations were discovered. If a company has a written discipline program that spells out the level of discipline for each violation, it may undermine its showing by deviating from that program – for example, issuing multiple verbal warnings even though the discipline program calls for time off without pay. Additionally, while a verbal warning can be an acceptable form of discipline for a first violation, an employer that may wish to assert an unpreventable employee misconduct defense in the future should still document the incident and the warning provided to the employee, as it would with other forms of discipline.

While the preceding actions address the unpreventable employee misconduct defense, the elements of the defense also lend to establishing a framework for an effective safety program – the primary benefit of which means a safer and more efficient workplace. They may also have the unintended consequence of helping an employer avoid an OSHA citation.

Josh Dennis is an attorney with Schwabe, Williamson & Wyatt. Contact him at 503-796-2985 or jdennis@schwabe.com. This column is intended to provide readers with general information and not legal advice. Consult professional counsel for help regarding specific situations.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the author and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither the author nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

The post OP-ED: How employers can potentially avoid and handle OSHA citations appeared first on Daily Journal of Commerce.

We are all familiar with the sign in the break room or outside the jobsite indicating how many days the company has gone without a ‎reported injury or safety violation. Employers often laud ‎these milestones as an example of their commitment to safety and appreciation for their employees. For employees, reaching a certain number of days without an injury or safety violation may result in a monetary bonus or some other type of prize. This is known as a rate-based incentive program, and it is one type of safety incentive program that employers have used to encourage employees to work safely.

Safety incentive programs’ effectiveness of reducing injuries has received vigorous debate from safety professionals for some time. On the one hand, some argue that workers will not work safely unless they are provided with an incentive to do so. Others argue that an employee should not need an incentive to work safely and avoid injury, and providing one can even encourage under-reporting or hiding of injuries.

Regardless of which side of the debate you fall on, the safety and health enforcement agencies have begun taking a closer look at safety incentive programs and the effect they have on employees’ reporting of injuries or safety hazards. Accordingly, the rules regarding these programs have changed in recent years and employers should be mindful of these changes when evaluating their comprehensive safety programs.

On May 12, 2016, the U.S. Occupational Safety and Health Administration (OSHA) published a final rule that prohibited employers from retaliating against employees for work-related injuries or illnesses. Federal OSHA used safety incentive programs as an example of a company policy that could deter an employee from reporting a work-related injury and said that they should be discontinued. The agency reasoned that if employees are given a bonus or reward for going 30 days without a work-related injury, an employee who is injured on the 29th day might feel pressured to not report the injury to their employer at the risk of costing other employees their safety incentive.

Oregon OSHA adopted these federal regulations and in early 2017 issued an informal fact sheet setting out when an incentive-based program would be a violation of the rule. Not surprisingly, Oregon OSHA took the position that rate-based incentive programs (i.e., a program that rewards employees for going a certain amount of time without a work-related injury) would be a violation of the rule because they could result in an adverse action against an employee for reporting a work-related injury. Many employers interpreted this rule to mean that all incentive-based programs were a violation of Oregon OSHA’s rules and discontinued their safety incentive programs altogether.

On Oct. 11, 2018, federal OSHA issued a memorandum clarifying its position on safety incentive programs. Most notably, the agency rolled back its prior position and stated that rate-based incentive programs are permissible as long as they are not implemented in a manner that discourages reporting. Therefore, under federal OSHA’s rules, an employer may take a negative action against an employee under a rate-based incentive program and not be cited as long as the employer has implemented adequate precautions to ensure employees feel free to report an injury or illness. Examples of adequate precautions provided by federal OSHA include:

• an incentive program that rewards employees for identifying unsafe conditions in the workplace;
• a training program for all employees to reinforce reporting rights and responsibilities and emphasize the employer’s non-retaliation policy; or
• a mechanism for accurately evaluating employees’ willingness to report injuries and illnesses.

Unfortunately, for employers here, Oregon OSHA has not adopted federal OSHA’s new position with respect to rate-based incentive programs and such programs will likely continue to be a violation under state rules. However, this does not mean that all incentive-based programs violate Oregon OSHA’s rules.

To the contrary, Oregon OSHA has explicitly stated that an incentive-based program that rewards employees for participating in safety training or identifying unsafe working conditions would be permissible. Another example of an acceptable incentive-based program would be to reward employees for exercising safe behavior such as wearing the proper personal protective equipment (PPE) or conducting an updated Job Hazard Analysis (JHA) when encountering an unplanned condition.

Ultimately, firms that choose to adopt a safety incentive program should be sure the program does not discourage employees from reporting an injury or safety hazard. Additionally, a safety incentive program should not be an employer’s sole means of developing a safe workplace. An incentive program should be one piece of a comprehensive safety and health plan that also includes safety training, hazard assessment, consistent inspections, and post-incident investigations, among other things. To the extent an incentive-based program plays a role in a company’s overall safety and health plan, it is important to tailor the program and rewards to your particular workforce. This can be achieved by developing a good understanding of the company’s culture and obtaining input from employees about what motivates them.

Joshua Dennis is a real estate and construction attorney with Schwabe, Williamson & Wyatt. Contact him at 503-796-2985 or jdennis@schwabe.com.

The post OP-ED: Creating an effective (and legal) safety incentive program appeared first on Daily Journal of Commerce.