Signed June 9, 2025. Effective January 1, 2026. The most significant change to construction wage liability in Oregon history.
SB 426 extends wage liability up the contracting chain on Oregon construction projects. Five provisions matter most:
Project owners and direct contractors are equally liable for unpaid wages owed to workers of any subcontractor at any tier — even if the GC paid the sub in full.
Contracts cannot waive or indemnify away this liability. Traditional hold-harmless clauses are legally unenforceable for wage claims. You cannot paper over this risk.
GCs and owners can request certified payroll records and a 5-year wage violation affidavit from any subcontractor. The law grants the right — but no mechanism to compel delivery or verify accuracy.
Unrepresented workers, third-party advocates, or the Oregon Attorney General can bring civil action to recover unpaid wages, penalty wages (up to 8×), interest, and attorneys' fees.
Primary residence projects and developments with 5 or fewer residential/commercial units on a single tract are excluded. Public agencies are not "owners" under the liability provisions. Everything else is in scope.
SB 426 doesn't just create a payroll problem — it creates a documentation and supply-chain visibility problem. GCs must prove they acted with due diligence across every tier. No existing tool addresses this end-to-end.
| Party | Exposure | Notes |
|---|---|---|
| General Contractors | Full joint/several liability for all subs and sub-subs | Highest urgency — they manage the most sub-tiers |
| Project Owners / Developers | Liable alongside the GC | Exposure on every commercial project they commission |
| Prime Subcontractors | Liable for their own sub-subs | Exposed whenever they use lower-tier subs |
| Property Investors / REITs | Liable as "owners" above the exemption threshold | Many don't realize they're exposed on tenant improvement work |
Even if you paid every sub correctly, you face liability if any sub-tier worker wasn't paid. The only way to limit exposure is to collect verified certified payroll records before each payment cycle and preserve them as an audit trail — proof that you exercised reasonable diligence.
One mid-size project — 50 workers at $50/hr underpaid by 10% for a year — produces $520,000 in unpaid wages before penalties. A GC with 5 active projects carries potential multi-million-dollar exposure at any moment.
You can request records — but nothing compels subs to deliver them, verifies their accuracy, or proves you asked. Email threads and spreadsheets won't survive discovery.
A timestamped record of every request, submission, verification, and sign-off — assembled into a signed compliance package — is what "reasonable diligence" looks like to a court.
Every pay period since January 1, 2026 is either documented or it isn't. Start building your audit trail today.
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