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SOU will pay record $2.5 million to settle wage dispute

PORTLAND (AP) — Southern Oregon University has agreed to pay a record $2.5 million to settle a prevailing wage dispute affecting 325 workers, the Oregon Bureau of Labor and Industries announced.

On average, the workers will receive about $7,700 apiece, before taxes, for their labor building a dining hall and two student residences on the Ashland campus.

Under terms of the agreement, the university sent an initial $1.5 million to the bureau to be distributed to 179 workers. The agency mailed checks to those workers Tuesday.

Before another 146 workers can be paid, labor officials will contact each one to get individual claims releases so the agency can collect and distribute an additional $1 million. That's expected to happen by May, agency spokesman Charlie Burr said.

Without admitting fault, the university agreed to a settlement that ranks as the largest in the labor bureau's 112-year history, eclipsing the $2.4 million that Daimler Trucks North America paid in January to settle civil rights complaints brought by six former employees, the agency said.

A statement issued by university spokesperson Ryan Brown on Wednesday said: "Though SOU disagreed with BOLI's conclusion that additional wages were owed on the project, due to the time and cost of litigating the dispute, the SOU administration concluded that it was in the best interest of all involved to mutually resolve the dispute. SOU is looking forward to moving on from the issue and continuing to serve our students and community."

The record payout stems from an investigation begun more than two years ago by the state agency's Wage and Hour Division, bureau officials said.

Burr said the agency was working on a separate investigation in late 2013 when questions arose about the SOU project. A series of 80 audits that followed determined that 44 contractors and subcontractors on the project owed workers nearly $2.6 million as a result of allegedly failing to pay required prevailing wages, he said.

Prevailing wages reflect the hourly wage, usual benefits and overtime, paid to the majority of workers, laborers and mechanics within a particular area. In the SOU case, prevailing wage rates in Jackson County in 2012 required employers to pay hourly rates of about $20 for painters, $22 for roofers, $24 for laborers and $28 to $36 for carpenters, electricians, and plumbers.

Investigators first sent demands for alleged nonpayment of prevailing wages on or about Dec. 23, 2014, the agency said. Prior to the settlement, the bureau collected about $52,000 in wage payments.

According to the bureau, construction of the residence halls and dining hall began in 2012, with all three buildings completed in the first week of September 2013. The buildings replaced the Cascade Complex, a single structure with residence halls and a common dining area. The same architect and general contractor performed work on the project, with most first-tier subcontractors working on all three buildings.

In addition, investigators found that the university administered the construction as a single project that was improperly divided rather than as a single project covered under Oregon's prevailing wage laws.

The new dining hall and residence halls are immediately adjacent to each other, and construction on all three was ongoing simultaneously.

Until this week's settlement, the largest in the bureau's history was Daimler's payout to settle claims of racial discrimination and sexual harassment by six former workers at the company's Western Star truck manufacturing plant on Swan Island.

Labor Commissioner Brad Avakian praised the work of the bureau's Prevailing Wage Rate Unit in the SOU investigation "to ensure that these workers receive every dollar they've earned."

"Our agency is committed to strong and fair enforcement so that employees on public projects are paid the full wages owed under Oregon law," he said.

This year about 40 contractors and public agencies requested and received determinations as to whether their contacts were covered under Oregon's prevailing wage laws, Burr said.

Information from: The Oregonian, www.oregonlive.com. Tidings reporter Joe Zavala contributed to this report.