Supporters and opponents of a bill that would hold general contractors liable for wage theft by subcontractors and labor brokers clashed before an Oregon House of Representatives committee on Wednesday.

Contractors and other critics said Senate Bill 426 would make them less likely to hire up-and-coming subcontractors.

“I’m kind of offended, frankly, by this approach,” said Rep. Ed Diehl, a Salem Republican who has commissioned construction projects. “It would put me liable for something I have no control over, and it would change my behavior. I would definitely not be reaching out to new startups.”

Khanh Tran, policy director for the National Association of Minority Contractors‘ Oregon chapter, voiced similar concerns. “This bill specifically disincentivizes hiring new contractors,” he said.

The bill from Sen. Floyd Prozanski, a Eugene Democrat, would make an owner and direct contractor “jointly and severally liable” in a civil action for unpaid wages owed to nonunion employees of the contractors or any subcontractors.

The bill is needed to combat rampant wage theft in the construction industry, Prozanski said.

“It is time to make certain that the men and women who do the work get paid for the work that they do,” he said Wednesday in remarks before the House Committee on Labor and Workplace Standards.

Some testifiers placed much of the blame for wage theft on informal labor brokers, who are required to be licensed by the state, but most are not.

Oregon has two licensed labor brokers, said Josh Nasbe, legislative director for the Oregon Bureau of Labor and Industries. He estimated there are “hundreds” of unlicensed brokers operating in the state.

Supporters of the bill said it would create an incentive for general contractors to hire reputable subcontractors.

“Contractors don’t have any incentive to hire licensed, bonded and responsible subcontractors,” said Hank Kaplan, a board member of the Jewish Federation of Greater Portland. “This legislation would provide that incentive.”

Existing legal processes for remedying wage theft are often too slow and complicated, said Martha Sonato, a lobbyist for the Oregon Law Center, which provides free legal help to low-income residents.

“Current protections aren’t enough,” Sonato said.

A lobbyist for landlords argued the bill creates “unintended consequences” in trying to hold bad actors responsible for wage theft.

“It will only lead to disputes that delay housing projects,” said Molly McGrew, a lobbyist for Multifamily NW.

An Oregon Department of Justice advisor, Leslie Wu, said Attorney General Dan Rayfield would welcome “another tool in the toolbox” to combat wage theft.

SB 426 passed the Senate 18-11 in April, with one Republican joining Democrats in sending the bill to the House.

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