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Introduction
On July 31, 2025, Governor Tina Kotek signed House Bill ("H.B.") 2688 into law amending Oregon's prevailing wage rate ("PWR") law. These changes, which take effect July 1, 2026, expand the scope of the PWR law to require contractors to pay prevailing wages on certain off-site bespoke work fabricated for public works projects that previously fell outside the law's requirements.
Overview of Oregon's Prevailing Wage Law
Oregon's longstanding PWR law requires contractors and subcontractors on public works projects valued over $50,0001 to pay workers a prevailing wage rate — that is, the wages and benefits comparable to those earned by workers in the same geographic area for similar work. The law, which applies to construction projects funded by public agencies, aims to protect local wage standards, prevent undercutting by low bids, and guarantee that public investments support fair labor practices. The law is administered by Oregon's Bureau of Labor and Industries (BOLI), which sets prevailing wage rates and imposes penalties, including fines or loss of eligibility for future contracts, on contractors who violate the PWR's requirements.
H.B. 2688 Expands Oregon's Prevailing Wage Law to Cover Off-Site Bespoke Work
Previously, Oregon's prevailing wage requirements only applied to work performed on the site of work of the public works project. The amendments introduced by H.B. 2688 broaden the definition of "public works" to include certain off‑site bespoke work that is fabricated, preconstructed, or assembled specifically for use in public projects. Manufacturers and suppliers who provide specialized materials — such as prefabricated steel or other custom assemblies — are required to compensate workers engaged in this production at prevailing wage rates.
For contractors on public works projects, these amendments significantly expand the scope of covered work by requiring prevailing wage rates on custom work performed off-site that was previously exempt from prevailing wage requirements. Simply put, H.B. 2688 represents a major shift in Oregon's prevailing wage framework, extending wage protections beyond traditional construction sites and into the broader network of off-site suppliers and fabricators that support public projects.
This shift thus presents uncertainty as to what off-site fabrication is now covered by the PWR law. Governor Kotek's Signing Letter to Oregon's secretary of state published in connection with H.B. 2688 expressed the governor's opinion that modular housing or mass timber products should not be classified as "bespoke," and thus exempt from prevailing wage requirements. However, since BOLI has not yet adopted regulations interpreting the amendments in H.B. 2688, it remains to be seen whether contractors will receive clarification as to what "bespoke" fabrication is covered by these amendments. BOLI is actively soliciting feedback on enforcement of H.B. 2688 in advance of the July 1, 2026, effective date and is expected to promulgate rules in the coming months.
Conclusion
With these expanded requirements on the horizon, Oregon contractors on public works projects should be sure to review their contracts to ensure that prevailing wage provisions are properly included as necessary to comply with these new requirements. Over the coming months, covered employers should plan for the financial impact of these changes, and budget for the additional expense of paying prevailing wages for off-site bespoke fabrication work. When in doubt, contractors should always consult legal counsel to ensure compliance.
Footnote
1. Oregon's PWR law also applies to public works portions of privately owned projects using at least $750,000 in public funds.
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