Oregon Looks to Implement GC Liability Legislation in Wake of Subcontractor Bust

JP Pro owner Juan Gutierrez is confronted by workers as labor representative Jonathan Rodriguez looks on

New Legislation in Oregon aims to hold general contractors accountable for their subcontractors' actions, specifically making them liable when subcontractors cheat their workers. HB2057, known as the General Contractor Liability bill, was proposed last year after JP Pro, a non-union framing company, was caught not paying its workers.

The bill, introduced by the House Business and Labor Committee at the request of the Carpenters Union, was derailed at the end of session due to partisan conflicts. It will be reintroduced next session as Upper Tier Liability.

Although updated with a different name, Upper Tier Liability and HB 2057, both place the burden on the company in charge of the project to ensure all workers are paid, including all individuals hired by the subs. Proponents of the respective bills feel more emboldened by the new bill as the case for the legislation has only grown deeper since General Contractor Liability was first introduced.

"Legislation like HB2057 is crucial because contractors like JP Pro will continue to exploit workers unless they face oversight. This oversight must start with the general contractors who hire these subcontractors," says labor and construction industry advocate Jack Dempsey.

JP Pro Incident

Last summer, a construction worker reported to labor representative Heather Mayther that he hadn’t been paid for over a month by JP Pro. Upon investigation, it was confirmed that multiple workers had not received their wages for weeks, leaving them and their families struggling.

"These workers were in a tough spot. They were scared and hadn't been paid. Their families were suffering, and they were afraid to speak up for fear of being fired. They deserve credit for standing up for their rights," said Mayther.

When the issue was brought to light, JP Pro's owner, Juan Gutierrez, issued checks to the workers. However, further investigation revealed that this wage theft was not an isolated incident. Testimonies indicated that JP Pro was using a labor broker to skim $1 to $10 per hour from workers' pay across multiple sites.

Not an Isolated Incident

Gutierrez eventually returned with paychecks but it was too little too late

Investigators discovered that at least 10 workers experienced wage theft on one or more JP Pro job sites. They worked with the Oregon Bureau of Labor & Industries (BOLI) to recover unpaid wages and overtime for these workers. Ultimately, Bremik Construction, the project's non-union general contractor, was ordered to cover the $77,000 owed.

BOLI has seen an almost 200% increase in wage claims from 2020 to 2024. They have struggled to keep up with this backlog with the average time from claim filed to resolution being 13 months. As such, the Carpenters Union proposed HB2057 as another option to get workers paid in a timely manner and as a tool to help expedite the claims.

"Clearly outreach is working and over the past year, we've gathered videos, testimonials, and BOLI records. The extent of worker exploitation is undeniable and strengthens the case for this legislation. We expect a positive outcome once it's reintroduced during the next legislative session," says Dempsey.

Moving Forward

The JP Pro case underscores the necessity for bills like Upper Tier Liability in Oregon. Once passed, this bill will significantly impact labor brokers and signal to contractors who cheat workers that they will face serious consequences.

"This legislation will force general contractors to maintain proper oversight or face civil action," stresses Dempsey.

Legislation like Upper Tier Liability is essential to prevent systemic exploitation of workers by unscrupulous subcontractors. Similar bills are being proposed in other states. Dempsey continues, "By holding general contractors accountable for their subcontractors' practices, we can ensure fair treatment and proper payment for all workers. The bill's reintroduction is crucial for creating a fairer and more accountable system in the construction industry. It is a significant step toward ensuring that all workers are compensated for their labor and that contractors adhere to ethical employment practices."