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Construction bill proposing upstream liability for unpaid wages draws split reaction
Summary
HB 2191 would make certain property owners and direct contractors liable when subcontractors fail to pay wages; unions and worker advocates supported the change to speed payments and increase compliance, while contractors and business groups warned it could raise costs, reduce competition and disproportionately harm small and minority‑owned firms.
The Labor and Workplace Standards Committee heard hours of testimony on House Bill 2191 on Jan. 14, a proposal to make property owners or direct contractors liable when contractors or subcontractors fail to pay worker wages or benefits.
Staff described the bill as expanding accountability in construction chains: a property owner or direct contractor could be held liable when a direct contractor or subcontractor fails to pay wages, while direct contractors would be liable when a subcontractor fails to pay. The staff presentation listed specific exemptions: liability would not apply to state, local or tribal governments; it would not apply when a construction project takes place on a property that is the owner's principal residence or on a property with five or fewer residential or commercial units on a single tract. Staff also said a company's officers, directors and managers can be held personally liable when the company is liable, and that recoverable damages include unpaid wages, interest, double damages and non‑economic damages; the attorney general would have pre‑suit investigative authority.
Sponsor Representative Julio Cortez said the bill "works to close that loophole" and aims to give workers a clear path to recover unpaid wages and benefits while holding higher‑level parties accountable.
Supporters — including construction workers, unions and worker‑rights groups — said the bill would speed payment to workers and create stronger incentives for compliance. Boris Gresley of the Western States Regional Council of Carpenters said 11 other states have adopted similar laws and reported faster worker payments and improved compliance when upstream parties have "skin in the game." Witnesses described individual wage‑theft stories: one Spanish‑language testifier said he lost more than $15,000 and that companies can simply disappear after nonpayment.
Opponents raised several concerns: the Associated General Contractors, Associated Builders and Contractors, Building Industry Association and other business groups called the proposal overbroad, warned it could require general contractors to police downstream payrolls, and said it could increase project costs and reduce opportunities for small and emerging subcontractors. Industry witnesses recommended targeted alternatives (enhanced penalties for bad actors, tightened misclassification rules, right‑to‑cure provisions and safe harbors) and asked the committee for comparisons to Oregon's law.
Minority‑owned and small business representatives said mandatory upstream liability and strict penalties could disproportionately damage disadvantaged firms lacking deep cash reserves or legal resources; they urged safe‑harbor protections and clearer exemptions.
The attorney general's office signed 'other' in support of the bill's goals but raised concerns about proposed rulemaking responsibilities in the bill text. Committee members asked staff for a comparison with Oregon law and further analysis before moving the bill forward.
