On October 17th, New Jersey Senator Stephen M. Sweeney proposed a bill, S3012, to enhance the penalties available under the New Jersey Public Works Contractor Registration Act (“PWCRA”). If passed, Senator Sweeney’s bill would permit New Jersey’s Department of Labor and Workforce Development (“LWD”) to stop construction on public works projects if contractors fail to pay prevailing wages to employees.
The PWCRA requires contractors who successfully bid for public works projects to pay their employees the state-determined prevailing wage tied to job classifications. The PWCRA also establishes certain record-keeping and posting requirements. PWCRA-covered projects could include either publicly funded ones or those that involve publicly owned or leased property, even where the work is for a non-public owner or leaseholder and is privately funded. The law currently subjects violators of its provisions to fines of up to $1,000, administrative penalties of up to $5,000, and/or imprisonment of up to 90 days, in addition to requiring violators to make up any wage and benefit underpayment to employees.
If an employer subjected to these penalties continues to pay wages at rates less than the prevailing wage, S3012 would permit the Commissioner of LWD to issue a stop-work order to cease all business operations at every site where the violations have occurred. The stop-work order would continue until a finding that the employer has agreed to pay wages prospectively at the required rate and has paid any past wages due and any penalty assessed under the PWCRA. S3012 would also empower the Commissioner to require, as a condition of an employer’s release from a stop-work order, that the employer file periodic reports for a probationary period of not more than two years to demonstrate its compliance with the PWCRA. The Commissioner would also be empowered to assess a civil penalty of $5,000 per day against an employer that continues to operate in violation of a stop-work order.
If passed, S3012 would take effect immediately. The bill has been referred to the Senate Labor Committee. We will provide any updates on the bill’s progress in the legislature as they occur.
The PWCRA is a complex law, and many employers are not even aware that they may be subject to its provisions. Unfamiliarity with the PWCRA, combined with a recent explosion in enforcement and litigation resulting from the 2008 financial crisis, leaves many employers vulnerable to the severe penalties associated with the law. Day Pitney attorneys are available to help employers determine whether they are subject to the PWCRA, to assist employers seeking to comply with its provisions, and to counsel employers should they find themselves facing its penalties.