Prevailing Wage and Davis-Bacon Compliance in New Jersey

New Jersey's Public Works Regulations

New Jersey has a dual system of prevailing wage laws:

• State Law: New Jersey has its own prevailing wage law called the New Jersey Prevailing Wage Act (N.J.S.A. 34:11-56.25), which mandates that contractors and subcontractors working on public works projects funded by the state or local governments pay workers the prevailing wage rates determined by the New Jersey Department of Labor and Workforce Development (NJDOL).
• Federal Law: The Davis-Bacon Act (DBA) applies to New Jersey's federally funded or assisted construction projects.

Key Point: This state law applies to public works contracts that are valued at more than $2,000.

Definition of "Public Works" in New Jersey

In New Jersey, public works refers to construction, reconstruction, demolition, alteration, repair, or maintenance projects funded in whole or in part by state or local government funds. Examples of public works projects include:

• Roads, highways, and bridges

• Public schools and government buildings

• Public water and sewage infrastructure

The New Jersey Prevailing Wage Act applies to public works projects funded by the state or local governments, while the Davis-Bacon Act applies to federally funded public works projects.

Prevailing Wage Determinations: Federal and State Requirements

Federal Davis-Bacon Act

• This applies to federally funded or assisted projects
• U.S. Department of Labor sets wage rates
• Includes basic hourly wage and fringe benefits

New Jersey's Prevailing Wage Law

• For state-funded public works projects, the New Jersey Department of Labor and Workforce Development (NJDOL) determines the prevailing wage rates for various job classifications in the region where the project is located.
• These rates are updated regularly and must be adhered to for public works projects in New Jersey.

Components of Wage Determinations

Both federal and state wage determinations in New Jersey include:

• Basic Hourly Rate: The basic hourly wage is the minimum wage that workers must be paid for their specific job classification, excluding fringe benefits. For both federal and state projects, this rate is determined by the U.S. Department of Labor (for federally funded projects) or by the New Jersey Department of Labor and Workforce Development (for state-funded projects) through wage surveys.
• Fringe Benefits: Non-cash benefits include health insurance, pensions, and vacation pay.
• Total Hourly Rate: The sum of the basic hourly rate and fringe benefits.

For example, if the basic hourly wage is $30 and fringe benefits are valued at $5, the total hourly rate would be $35. If no fringe benefits are provided, the contractor must pay the full $35 in wages.

Compliance for Contractors and Subcontractors

Contractors and subcontractors working on public works projects in New Jersey must:

1. Determine Applicable Wage Rates:
   • For federal projects: Use the U.S. Department of Labor's Wage Determinations Online (WDOL) portal via SAM.gov
   • For state-funded projects, wage rates are provided by the New Jersey Department of Labor and Workforce Development.
2. Submit Certified Payroll Reports:
   • For federal projects: Use U.S. Department of Labor's Form WH-347

   • For state-funded projects, payroll reports must be submitted to the New Jersey Department of Labor and Workforce Development.

3. Handle Fringe Benefits:
   • Either provide the fringe benefits as specified or pay the equivalent value in cash to workers
4. Post Wage Rates On-Site:
   • Display the prevailing wage determinations in a conspicuous place on the job site
5. Maintain Accurate Records:
   • Contractors must maintain detailed payroll records, including hours worked, wages paid, and fringe benefits provided. These records must be kept for at least three years and must be available for inspection by the New Jersey Department of Labor or the U.S. Department of Labor.

Penalties for Non-Compliance

Failure to comply with prevailing wage laws in New Jersey can result in:

• Back pay for underpaid workers
• Fines
• Disqualification from future public works contracts

Unique Aspects of New Jersey's Prevailing Wage System

• Broad Coverage: New Jersey's prevailing wage law applies not just to public works projects, but also to certain maintenance and service contracts, extending beyond typical construction work.
• Periodic Wage Rate Updates: The state requires annual updates to prevailing wage rates, with the Department of Labor conducting comprehensive wage surveys to ensure rates reflect current local labor market conditions.
• Specific Enforcement Mechanisms: New Jersey mandates stringent record-keeping requirements and allows for civil penalties up to $250 per day for each worker underpaid, with contractors potentially being barred from future public contracts for repeated violations.

Relevant Resources

• U.S. Department of Labor: Wage Determinations Online (WDOL): SAM.gov - Wage Determinations

• New Jersey Department of Labor and Workforce Development: Prevailing Wage Information: New Jersey Prevailing Wage Information

• Certified Payroll Form WH-347: U.S. Department of Labor Certified Payroll Form

For the most current and detailed information, refer to the New Jersey Department of Labor and Workforce Development website and consult with legal counsel familiar with New Jersey labor laws and federal Davis-Bacon requirements.