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Testimony splits as committee considers making deliberate wage theft a felony; drafters promise narrowing amendments
Summary
Supporters including labor unions and worker advocates urged HB 40 89 to criminalize intentional wage theft and authorize agency referrals to prosecutors; business groups, public safety stakeholders and district attorneys warned the current draft is overbroad, lacks clear mens rea and could criminalize ordinary mistakes. Drafters said amendments are forthcoming.
The House Committee on Labor and Workforce Development opened a public hearing on House Bill 40 89 on Feb. 4, a measure that would expand the definition of theft of services to include certain forms of wage theft and make knowingly using unlicensed labor contractors a class C felony punishable by up to five years in prison and a $125,000 fine.
Sponsor Rep. Thuy Tran framed the bill as a tool to address persistent wage theft across multiple industries and populations that face barriers to civil enforcement. Labor organizations and worker advocates — including the Western States/North Coast Carpenters, the Urban League of Portland, Northwest Workers' Justice Project and the Oregon Farmworker Union — testified the bill is needed to hold repeat offenders accountable, protect vulnerable workers and deter large‑scale misclassification, cash payments and unlicensed labor brokers.
Construction union witnesses said they are tracking hundreds of unregistered labor brokers and see the practice as fraud that undercuts honest employers. Boris Gresley, involved in the drafting, said drafters do not intend to expand criminal law indiscriminately and will substantially narrow the scope based on feedback from district attorneys and state agencies.
Business groups (NFIB, Associated General Contractors, Oregon Business & Industry), local government representatives and industry associations urged caution. They raised drafting concerns about the 'knows or should have known' standard, the lack of a monetary threshold, overlap with existing criminal statutes and the practical burden on contractors, homeowners and small employers to verify licensure. AGC urged the committee to allow time to implement HB 40 12 (which creates an assessment of unlicensed contractors) and Senate Bill 426 (recently enacted) before imposing new felony liability.
Criminal‑justice stakeholders — the Oregon Criminal Defense Lawyers Association and the Oregon District Attorneys Association — said the draft requires more careful review; DAs signaled they currently oppose the bill as written because of definitional inconsistencies and concerns about prosecutability. Legal witnesses explained theft is a specific‑intent crime and the bill as drafted lacks a clear mens rea, which could create unintended consequences by pulling civil contract disputes into criminal court.
Throughout the hearing witnesses suggested alternatives, including better funding for BOLI investigation and packaging cases for DAs, adding monetary thresholds and clarifying mens rea language. Drafters and supporters said amendments will be posted; Boris Gresley acknowledged the concerns and promised to narrow the language and coordinate with prosecutors before the bill moves forward. Chair Graber closed the hearing and said amendments are forthcoming.
