How Two Oregon Legislature Bills Affect Your Construction Company

How Two Oregon Legislature Bills Affect Your Construction Company

Two bills recently passed the 2017 Oregon Legislative session that affect the construction industry. Since I know all of you are eager to sift through employment law in your spare time, allow me to summarize the pertinent points for you.

House Bill 2005 – Pay Equity Law

The pay equity law is an employer-friendly bill making it easier to defend against a wage discrimination claim brought by an employee.  It allows an employer to pay employees different compensation for the same or substantially similar work.

To use an example provided by Amanda Gamblin, Employment Law Attorney and Shareholder at Schwabe, Williamson, & Wyatt, let’s suppose a female roofing employee brings a suit against her employer alleging pay discrimination.  The employer responds that the pay is not discriminatory but is rather based on production, and said employee doesn’t install roofs as quickly as her coworkers, all of whom happen to be male.  The employee then claims that this is indirect discrimination since the average woman can’t install roofs as rapidly as the average male.

This employee’s response will no longer hold up in court under the new pay equity statute because the Oregon Legislature has specifically cited productivity as being an appropriate basis upon which to determine pay.  Other permissible bases are education, training, work location, seniority, experience, any system upon which pay is determined by quality or quantity of output, or any combination of the above.

There are some other factors that should be noted about House Bill 2005.  First, if an employer performs an equal pay analysis every three years and remedies any resulting discrimination, then an employee would be unable to collect compensatory or punitive damages in a pay discrimination suit.  An employer should consult with an attorney about the design and performance of this analysis.


House Bill 3458 – Overtime Law

Here’s the heavy-hitter.  House Bill 3458 specifies that manufacturing employees are limited to working 55-hours in a given week (60-hours if the employee specifically requests or agrees in writing).  Why do we care about manufacturing in the construction industry?  Because the bill’s legal definition of a manufacturing establishment is “an establishment engaged in…using machinery to transform materials, substances or components into new products”.  Machinery includes power-driven tools.  Sound familiar?  This certainly applies to roofers, heavy highway contractors, contractors installing flooring and siding, and the list goes on and on.

BOLI hasn’t specifically stated that House Bill 3458 applies to the construction industry in Oregon.  The statute was actually instituted to fix a burdensome overtime rule that was specific to the manufacturing industry, nonetheless, the legal risk is there and only time will tell how it will affect the construction industry.  The outlook certainly isn’t rosy though as most construction employers throughout the state are experiencing unprecedented labor shortages.

As CPAs at Jones & Roth, we’re always happy to assist you with your business needs; however, we do not provide legal advice.  Should the need arise, we’re able to refer you to an appropriate attorney as we have numerous longstanding professional relationships with lawyers in different fields.


jones-roth-sarah-shaw-stahlkeSarah Shaw-Stahlke is a Senior Accountant with the Jones & Roth Construction Team. Sarah specializes in working with family-owned and closely held construction businesses, providing accounting, advisory, and tax guidance that helps clients achieve maximum profitability.