On June 9, 2025, Oregon enacted Senate Bill 426, a significant new law aimed at protecting construction workers from wage theft by imposing strict joint and several liability on both property owners and direct contractors for unpaid wages owed to unrepresented employees of subcontractors at any tier. The law takes effect on Jan. 1, 2026.
While this law is part of a broader legislative trend to enhance accountability in the construction industry and ensure workers are paid fairly and promptly, Oregon’s wage theft law is an outlier. The new law places significant compliance and liability burdens on property owners and direct contractors for a subcontractor’s failure to properly pay their own employees, even though the subcontractor was paid for the project and neither the owner nor the director contractor had knowledge of wage theft.
SB 426 adds new sections to ORS Chapter 652 making both an “owner” and “direct contractor” strictly jointly and severally liable for any unpaid wages and fringe benefit contributions owed to “unrepresented employees” of the direct contractor or subcontractors (at any tier) of a “construction contract.”
Affected workers or their authorized third-party representative may file suit against owners and direct contractors. The Oregon attorney general is also authorized to accept assignment of claims from affected workers and bring civil actions in the name of the state. The statute of limitations is two years from the date...
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