New Jersey contractors can now receive stop-work orders from the Commissioner of Labor and Workforce Development (the Commissioner) for not paying prevailing wages to employees working on projects in New Jersey subject to the Prevailing Wage Act (PWA). The stop-work order could effectively suspend a contractor from completing a public works project and prevent them from receiving payment. This amendment to the law took effect on July 9, 2019. As previously outlined in New Jersey’s PWA, contractors can also face fines, imprisonment, and debarment from bidding and working on public works projects, as a result of not complying with the act.

The expansion of this authority allows the Commissioner to make an initial determination without a reference from an Attorney General, to issue a stop-work order. The stop-work order can remain in effect until the Commissioner issues an order that states otherwise. The Commissioner can also:

  • Require an employer to file periodic reports with the Department of Labor and Workforce Department for up to two years as a condition to be alleviated from the order
  • Enter a place of employment during business hours to examine payroll and other records and interview employees
  • Subpoena witnesses, books, and records
  • Issue a stop-work order if it is determined that an employer has violated any wage and hour law, the Worker’s Compensation law, or the Unemployment Compensation law
  • Transfer the case to the Division of Workers’ Compensation for investigation, after determining that an employer is in violation of the PWA

General contractors’ obligation to comply

General contractors could face serious consequences for not complying with stop-work orders for prevailing wage violations. Contractors that continue to conduct business in violation of a stop-work order can be subject to penalties up to $5,000 for each day they conduct business in violation of the stop-work order. They can also be fined no less than $1,000 for each day for failing to comply with a subpoena.

General contractors’ rights

Contractors do have the right to appeal a stop-work order within 72 hours of the decision. Contractors also have the right to immediately terminate a subcontractor who has been issued a stop-work order for failing to comply with the PWA.

Questions on how to stay compliant?

At eBacon, we make sure our clients and our services are always up to date on the latest prevailing wage laws. Reach out to us today for a free consultation to see how you can stay compliant and save money.

The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.