Oregon labor bureau gets $19M budget boost to tackle wage claim backlog

Oregon’s labor bureau says it will stop prioritizing wage claims based on income by the end of 2025 after a significant funding boost approved by state lawmakers will allow the agency to tackle backlogs that have left wage theft and discrimination claims unresolved for years.

Oregon lawmakers last week granted Labor Commissioner Christina Stephenson’s request for a 30% increase in the Bureau of Labor and Industries’ 2025-2027 budget. The nearly $19 million boost will fund the hiring of additional investigators to reduce backlogs in the wage and civil rights divisions, and comes after InvestigateWest spotlighted the agency’s struggles to resolve claims and recover wages for stiffed workers.

The bureau also plans to end a policy that prioritizes wage claims based on the income level of the filer by the end of this year. Since November 2024, claims for stolen wages from anyone making more than $25.34 an hour have been sent to the back of the line while the agency handles the claims of lower-wage workers first.

Stephenson and other agency officials said the budget increase is an important step toward remedying decades of underfunding. Nearly all of the new money comes from revenue outside of the general fund, including a $14 million influx from the Department of Consumer and Business Services. That money will support approximately 50 new hires over the next four years, but agency officials will need to lobby the Legislature for permanent funding to sustain them after that, a spokesperson said.

The budget increase also stands in stark contrast to the fate of some other state agencies, such as the Department of Transportation, which announced this week that it will lay off hundreds of workers after an ambitious transportation package failed in the final hours of the session. The Department of Early Learning and Care, too, is absorbing millions of dollars in reductions across multiple child care and early learning programs.

“The vote of confidence from the Legislature … is a really huge thing,” Stephenson said. “There’s light at the end of the tunnel.”

InvestigateWest reported in 2023 that, of the $12 million that the labor bureau had ordered employers to pay in back wages and penalties since 2015, nearly $5 million was never recovered. The agency has since made some headway on its backlogs, but the bureau's staffing issues and lack of resources has continually gotten in the way of investigating claims and going after more evasive employers. Officials have also cited a recent uptick in the number of wage and civil rights claims filed and an outdated system for managing cases as exacerbating the backlog.

Now with more money in hand, Stephenson said the agency is focused on delivering on its promises to lawmakers and the public. Investigators will be hired over the next year and a half. The labor bureau will also continue updating its case management system so that cases can move through processing and investigation steps more efficiently. New performance metrics enshrined by lawmakers this session will also more accurately track the agency’s efficiency in achieving results for workers, including tracking the amount of time it takes to issue initial responses and resolve claims.

Though some lawmakers had lambasted the labor bureau’s new wage claim policy as discriminatory, Stephenson was able to channel that outrage into a rallying cry during the session.

“When (the labor bureau) is stretched too thin, the message is clear: Worker protection is not a priority, allowing bad actors to exploit workers without consequence,” said John Hanna, political and government affairs director for the Western States Regional Council of Carpenters, in written testimony supporting the bill. “We cannot let this continue. Without proper enforcement, labor protection laws are just words on paper.”

Agency leaders and representatives from labor and legal aid groups also repeatedly pointed to stagnant staffing levels that have been unable to keep pace with the needs of Oregon’s growing workforce. In 2024, the labor bureau had one employee for every 20,000 workers in the state, which is nearly four times more workers per state employee compared to the 1980s. Last fall, a bureau report said the new investments will bring the ratio down to about 9,000 workers for every agency employee.

Less competitive pay has also stifled recruitment and retention, and the agency must enforce an ever-growing list of new paid leave, civil rights and wage laws, supporters of the budget increase said.

Stephenson credited that coalition of advocates in a statement celebrating the agency’s news.

“This victory belongs to every advocate, contractor, worker, employer, and legislator who recognized the critical work of this agency and answered the call,” she said. “I am proud to stand with them and proud that together, we’re delivering on the values we share as a state.”