Modular Building Institute sues Oregon over modular wage rule

Oregon lawmakers sought to have out-of-state modular home fabrication factories pay workers wages as if production were occurring within the state. A national trade group says that is illegal and has sued. The Modular Building Institute filed suit in federal court Wednesday against Oregon’s labor commissioner. The group represents 708 modular construction companies worldwide. “Oregon cannot reach across state lines and dictate how businesses operate in other states simply because a finished product is later used on an Oregon public project,” Wilson Freeman, an attorney with Pacific Legal Foundation on the filing, said in a statement. If MBI wins, Oregon’s push to control out-of-state factory wages collapses. If Oregon wins, other states may copy the model. At issue is Oregon House Bill 2688, signed into law last year amid broader efforts to improve housing affordability. It expanded Oregon’s prevailing-wage rules far beyond construction sites. New York enacted a similar expansion in December 2025, covering off-site custom fabrication of modules, over MBI’s objections. Unlike Oregon, New York negotiated. Gov. Kathy Hochul signed a follow-up “clean-up” bill narrowing the law’s scope ...