Construction Payment Blog

Comprehensive Collection of Construction Payment & Lien Rights resources

What Contractors Must Know About Prevailing Wage in New Jersey

Last Updated on

Reading Time: 4 minutes

Prevailing Wages in New Jersey

Construction jobs are hard work and long hours. If you’re doing those long difficult days of work, you expect to get paid what you deserve. To keep you from getting paid less than what you should, prevailing wage laws are keeping watch.

Prevailing wage laws exist throughout the country requiring that employers pay laborers no less than the prevailing wage for their work. Basically, prevailing wages are the amount that workers are being paid for similar work in a particular location. But there are other details that can complicate the issue – and those details change quite a bit from state to state.

Let’s look at prevailing wages in New Jersey and the rules surrounding them. 

Prevailing Wages in New Jersey

In New Jersey, the law requires that, for every public construction project that’s required to pay a prevailing wage, the prevailing amount must be included in the project contract. The contract is required to have in it a provision establishing that workers on a given job will not be paid less than the prevailing wage rate.

The state of New Jersey has prevailing wage laws in an effort to “safeguard” the efficiency and general well being of laborers and workers on public works projects and “to protect them as well as their employers from the effects of serious and unfair competition resulting from wage levels detrimental to efficiency and well-being.” N.J. Stat. § 34:11-56.25.


Prevailing Wage 101:

What Are Prevailing Wage Laws? 


What Jobs Must Pay Prevailing Wage?

Before getting to the type of work, it’s important to note the threshold amounts. If the project is being performed for a municipality or on land owned by that municipality, only projects exceeding a total contract value of $15,444 will require prevailing wages. If the project is for any other public entity, the threshold is only $2,000.

Types of Works

There are a few different types of work where prevailing wages might be required.

First, when a project constitutes a “public work”, prevailing wages will be required. This refers to the construction, reconstruction, demolition, and altering of public property, regardless of whether the project is publicly funded. It also includes work where the public entity is merely leasing the property – and prevailing wages will be required when the public entity is leasing at least 55% of the space.

Next, prevailing wages will be required if the public body owns the property – regardless of whether the public entity is a party to the contract/project.

Finally, when the project involves a partnership with a public entity — such as the New Jersey Economic Development Authority, the New Jersey Housing and Mortgage Finance Agency, the New Jersey Educational Facilities Authority, and the New Jersey Healthcare Facilities Authority to name a few — prevailing wages are required. If you’re partnering with a public agency, regardless of whether the land is publicly owned or whether the project is publicly funded, there’s a good chance prevailing wages apply.

For more information, the N.J. Department of Labor and Workforce Development has helpful FAQs: Public Works (Prevailing Wage) FAQs.

How Does New Jersey Determine The Numbers?

In the Garden State, a commissioner is appointed who will determine the prevailing wage rates. When it comes to prevailing wages in New Jersey, the commissioner has a lot of power. They will establish the prevailing wage rate in the location where the public work is being done. 

Once the commissioner determines the wages, they’re required to give notice by mail of the determined wage to any employers or representative groups in a given trade. The wages that are determined will be in effect for 2 years from the date that they are established unless another wage determination is made before that time.

What Happens If…

There could be big consequences if laborers aren’t being paid the prevailing wage rate on a job. Specifically, under § 34:11-56.27 of the New Jersey Revised Statutes, if a contractor is required to pay prevailing wages and they’re paying workers less than the prevailing wage rate, the public entity in charge of the project may terminate the contractThe entire job could come to a screeching halt and that obviously wouldn’t be good for the project. Furthermore, the contractor will be liable for any extra costs incurred. There’s more, too…


Deep Dive:

Would Removing Prevailing Wage Laws Lower the Cost of Public Projects? 


Penalties For Not Paying Prevailing Wages in New Jersey

Now, if an employer doesn’t keep the required records of payment, falsifies those records, doesn’t make those records available, or does anything to slow down an investigation into incorrect wages being paid, the penalties can get rough. An employer could be fined up to $1,000 and/or sent to jail for up to 90 days.

How Do You Know What’s Being Paid and What Should Be Paid?

If you’re on a job and you think your check isn’t adding up to what it should be, you can look it up! The current rates are published here: Current New Jersey Prevailing Wage Rates.

On every job, the contractors and subcontractors are required to keep a record of all of the names, type of work, and what was actually paid to each of the workers employed on a job. New Jersey requires that those records be preserved for two years “from the date of payment.” Those records are required to be available to you so that you yourself can check to make sure that your check is correct.

What to do if You’re Being Underpaid

If you aren’t receiving prevailing wages in New Jersey and believe that you should be, you can file a written protest with the commissioner. Your protest should object to the wages that you’re being paid and show that they’re less than the prevailing wages for the work you’re performing. As always, deadlines apply – but it’s a pretty lenient one, here. If you think your wages aren’t right, you must file a protest within 2 years from the date wages were paid to you.

Bottom Line

Getting paid on a construction job is already complex enough. But knowing all the rules and regulations surrounding how you get paid and how much that payment amounts to is imperative. For those working on New Jersey public jobs (or at least those jobs with some public involvement), pay attention to your pay stubs and compare them with prevailing wage rates. And keep good records! You can make a claim up to 2 years later, but you’ll have to have the paperwork to back up any claims.

Get Paid Faster

Summary
What Contractors Must Know About Prevailing Wage in New Jersey
Article Name
What Contractors Must Know About Prevailing Wage in New Jersey
Description
What contractors must know about prevailing wage in New Jersey. This article covers the basic rules concerning how prevailing wages work, how the prevailing wage is determined in New Jersey, and what happens if it's not paid accurately.
Author
Publisher Name
zlien
Publisher Logo

Last Updated on Dec 03, 2018
Published on Oct 09, 2018

by

Wynton Yates is a Legal Intern at zlien. Currently attending Loyola Law School in New Orleans, Wynton looks forward to graduating in 2020. Before joining the zlien team, Wynton was a television news reporter who often covered some of the nation's biggest stories. Wynton once played golf at Augusta National but refuses to reveal his score.

Leading Thought on Construction Payment, Delivered To Your Inbox

zlien's Construction Payment Blog helps professionals in the construction industry navigate complicated payment issues. Join over 20,000 people who read our blog each month and subscribe.

Subscribe

Read Next