Prevailing Wage Amendments – Fall 2026

By Carrie Connelly

Oregon Prevailing Wage Expands to “Satellite Locations”, Effective July 1, 2026

Pursuant to ORS 279C.800(6)(G), the term “public work” now includes off-site work at “satellite locations” to construct “bespoke” elements of a project.  To put that in plain English, public entities now must ensure the payment of prevailing wages for work performed off-site to fabricate, assemble, or pre-construct components of construction projects.  BOLI’s rules identify the following examples of “bespoke” construction:

1. Mechanical systems such as heating, ventilation, air conditioning, refrigeration and other ducting or piping;
2. Plumbing, electrical, boiler, and roofing systems or components;
3. Ornamental and structural iron work; and
4. Masonry and plaster systems or components.

OAR 839-025-0004(30)(a)(G)(iv).

Before this controversial 2025 legislation (HB 2688) took effect on July 1, 2026, your entity could purchase a custom training station or playground equipment manufactured off-site and likely pay prevailing wages only for the product’s installation. Now, custom off-site fabrication, which is part of a public work project, is subject to the payment of prevailing wages.

Contracts for such work must identify all required work that “reasonably could be considered to be performed on a system or component described in OAR 839-025-0004(30)(a)(G)(iv).”  OAR 839-025-0020(12)(a). To be fair, BOLI also requires that contractors notify public agencies of any work that could reasonably be performed off-site.  OAR 839-025-0020(12)(b).

BOLI’s definition for the term “bespoke” is as telling for what it excludes as for what it includes.  “Bespoke” includes work that is performed “according to individualized specifications that are contained in a public works contract or related documents, including contract plans.”  Bespoke excludes; 1) work performed before issuance of the public works solicitation; 2) manufactured/modular homes and mass timber products built to standard designs; and 3) the creation or application of concrete, asphalt, aggregate material, paint color (does that include paint?), or art.

The rules include a few additional “get out of jail free” cards.  OAR 839-025-0800 clarifies that off-site work will not be subject to prevailing wages if it:

1) Creates inventory that can be sold on the general market or used in other projects; or

2) Was based on standard designs or available for general sale before the solicitation was issued.

Prevailing wages are also not owed if BOLI has not set a wage for that off-site work.  However, if owed, the applicable rate is that set for the off-site location – not the project location.  For these reasons, you may want to think twice before customizing project components. Instead, request items that specifically fall within one of the enumerated exclusions (e.g., available “standard” items.)

Complying with other prevailing wage laws provides an additional level of protection. An entity is not subject to civil penalties for violating these new satellite location requirements if it includes all legally required prevailing wage provisions and rates in its solicitation and contract.

On a different note, be aware that the fee contracting entities pay to BOLI has increased from a maximum of $7,500 to $12,500. As background, a contracting public agency (not the general contractor) must pay a fee to BOLI upon award of any public works contract. That fee is calculated at one-tenth of one percent (0.1%) of the contract price, with the following floor and ceiling:

• Minimum fee:$250 (unchanged)
• Maximum fee:$12,500 (previously $7,500)

BOLI uses these fees to fund wage surveys, compliance education, and enforcement. This 67% increase took effect on June 5, 2026, and the legislature has tasked BOLI with reporting whether the increase is enough.  Please be aware of this increase and factor it into any public works projects planned for this budget year.

To ensure compliance with the above and other public contracting requirements, be sure to obtain legal review before going out to bid.  On our part, LGLG plans to roll out an updated public contracting rules packet addressing the above and other legislative amendments in early 2027.  Stay tuned!