Prevailing Wage New Jersey by County: The Basics
Everyone deserves to be paid fairly for their work.
That’s the basic premise of prevailing wage, which is the minimum hourly wage employers must pay certain laborers on public works projects. In New Jersey, in particular, prevailing wage “safeguards workers’ efficiency and general well-being.”
By adhering to prevailing wage, you’re not only abiding by the law but ensuring your employees are paid fairly for their skills and labor. It’s a win-win for everyone.
In this article, we’ll be sharing more about New Jersey prevailing wage, including the basics everyone — workers, employers, and contractors alike — should know, the consequences of failing to abide by prevailing wage, and how to manage county-by-county prevailing wage in New Jersey.
If you’re not in New Jersey, Certified Payroll Reporting is breaking down prevailing wage by state — check here for more information on California, New York, Washington, and Illinois prevailing wage laws.
New Jersey Prevailing Wage Basics
As mentioned above, prevailing wage is the minimum hourly wage employers must pay certain laborers on public works projects.
In New Jersey, prevailing wage is designed “to safeguard the worker’s efficiency and general well-being, and to protect them as well as their employers from the effects of serious and unfair competition resulting from wage levels that are detrimental to the efficiency and well-being of all concerned.” In essence, prevailing wage protects workers’ rights and pay from unfair labor practices that may otherwise be used to secure a contract.
What is the Prevailing Wage Rate?
Established by the New Jersey Prevailing Wage Act (N.J.S.A. 34:11-56.25 et seq.), prevailing wage laws in New Jersey set a standard for pay — and fringe benefits — for workers engaged in public works projects.
Often based on collective bargaining agreements, as well as the date the project is awarded (not executed), these rates vary based on the craft or trade and the locality in which the work is taking place and ensure fair pay for workers. The New Jersey Department of Labor (DOL) Commissioner of Labor and Workforce Development is responsible for setting the prevailing wage rates, also known as the prevailing wage determinations.
Employers and subcontractors whose employees work on public works projects are subject to prevailing wage, but they must register with the Division of Wage and Hour Compliance before they may bid or execute on a public works project. Registration costs $500 annually, and after two years, contractors with no violations of the Prevailing Wage Act or Contractor Registration Act can register for two years at a time for a $700 cost.
How is the New Jersey Prevailing Wage Act Different from the Davis-Bacon Act?
The New Jersey Prevailing Wage Act is a state-level law that applies to public works contracts awarded by the state or local government, including regional school boards.
The Davis-Bacon Act, on the other hand, is a federal law that affects public works projects awarded by a federal agency.
The New Jersey DOL does not monitor Davis-Bacon projects, but some projects may require both federal and state compliance, so be sure to understand the requirements of your specific project.
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Define “Public Works” Projects
In New Jersey, a public works project is any project funded in whole or in part by a public body. “Public works” includes “construction, reconstruction, demolition, alteration or repair work, or maintenance work, including painting and decorating,” that is done under contract and paid for in whole — or in part — by public funding. There is an exception to this rule, which is work done as part of a rehabilitation program.
Included in the definition of public works is any project done on property leased in part (at least 55% or 20,000 square feet) by a public body or property to be subsequently leased by a public body.
In addition to the type of work that counts as public works, there is also a threshold for the amount of work that is covered by the Act. For New Jersey municipal governments, public works contracts must be valued at $19,375 to be covered by the New Jersey Prevailing Wage Act. For all other public entities, the threshold for being covered by the Act is $2,000; this includes work by municipal utility authorities and boards of education.
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County-By-County: Prevailing Wage New Jersey
Because prevailing wage varies based on the locality, there are different prevailing wage determinations for different counties.
These New Jersey prevailing wage rates by county depend on factors like the cost of living, collective bargaining agreements, and other local labor market conditions, such as the availability of skilled workers.
To find the prevailing wage rates for your county, visit the DOL New Jersey website.
New Jersey Prevailing Wage Violations and Penalties
The penalty for violating prevailing wage in New Jersey varies, depending on the severity and significance of the violation.
Though violations are most commonly accidental, there are many ways an employer or contractor may violate prevailing wage, such as failing to pay workers at the correct rate, failing to provide the appropriate fringe benefits, or failing to pay workers for the correct amount of hours worked.
Potential penalties for violating prevailing wage in New Jersey include owing backpay to underpaid workers, owing fines, being charged with violating the New Jersey Prevailing Wage Act, and even a stop work order, depending on the severity of the violation.
The Future of New Jersey Prevailing Wage
As of August 15, 2024, all contractors performing public works projects will be required to submit certified payroll reports via the New Jersey Wage Hub, or NJ Wage Hub. This portal is the official website of the New Jersey Department of Labor and Workforce Development and serves a variety of contractors, contracting agencies, and employers. The purpose of the portal is to streamline operations and promote fair wage practices according to the Prevailing Wage Act and Diane B. Allen Equal Pay Act.
As an added bonus, if the contracting agency is also using the New Jersey Wage Hub, you can eliminate the need to submit more paperwork to contracting agencies, provided they agree to receive certified payroll electronically.
New Jersey Certified Payroll Reports and Compliance
Certified payroll reporting is the process of reporting on the wages paid to employees during a payroll period. In New Jersey, certified payroll reports must be submitted within 10 days of the payment of wages.
Luckily, the DOL New Jersey provides a certified payroll report for public works employers and contractors to fill out. For that form, click here. And don’t forget — you’ll need to electronically file through the NJ Wage Hub.
In addition to certified payroll reporting by the DOL New Jersey, the New Jersey Economic Development Authority (NJEDA) also monitors contractor compliance with prevailing wage at both the state and federal levels. To stay in compliance, you need to submit certified payroll reports to the NJEDA, too.
Deep Dive: New Jersey and Federal Certified Payroll Reports
Staying up to date on certified payroll reporting can be complex; there are ample reports, each of which takes a fair amount of resources — time and knowledge — from employees. In order to streamline operations and simplify the certified payroll reporting process, we’ve rounded up some of the important state and federal reports you should be prepared to submit.
New Jersey: DOL Payroll Certification for Public Works Projects
The Department of Labor requires a Payroll Certification for Public Works Projects be filled out to certify your prevailing wage. This form, an example of which can be found here, requires information on the contractor or subcontractor, employee, and job.
New Jersey: Contractor Certified Payroll
Contractor Certified Payroll is another form contractors must submit to certify that they have been paying prevailing wages to their employees. Like other forms, it requires information on the contractor or subcontractor, the job, and the employee, including employee name, work classification, hours worked, and deductions.
New Jersey: Economic Development
As mentioned, the NJEDA monitors contractor compliance with prevailing wage at the state and federal levels. To stay in compliance, be sure to submit your certified payroll reports to the NJEDA.
Federal: WH-347
In addition to state certified payroll reporting, don’t forget that you must submit federal certified payroll reports, too. Form WH-347 is the federal version of certified payroll reporting. To file this form, you will need employee or laborer information, work classification, hours worked, rate of pay, amount earned, and deductions.
Prevailing Wage in New Jersey: Streamlined and Simple
Understanding prevailing wage in New Jersey is the first step to compliance.
However, we know compliance can get complex, taking up time and resources you may or may not have. With varying rates county-by-county, different requirements for state and federal projects, and potential penalties for non-compliance, it’s important you get every step right. That’s why we recommend working with a payroll compliance partner to ensure that all your reports are in order.
With Certified Payroll Reporting, you can save yourself time, stress, and money. We streamline operations and ensure compliance effortlessly with our automated software solutions. Looking for even more support? No problem. Our full-service package ensures you have experts handling your certified payroll reporting, getting it right the first time, every time.
For more information and to get started with Certified Payroll Reporting, contact us today.