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Prevailing Wages in New Jersey: What Contractors Should Know

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Last Updated Nov 16, 2023

Photo of a New Jersey construction site

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, New Jersey prevailing wage laws are keeping watch.

New Jersey requires contractors to pay prevailing wage rates for most municipal and state-financed construction projects. They also require contractors to pay federal prevailing wage rates for “building services” in state-owned or leased buildings. The penalties for not following the New Jersey prevailing wage laws can be steep, including potential jail time.

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

Table of contents

What jobs must pay prevailing wage in New Jersey?

New Jersey prevailing wage laws apply to municipal government projects costing over $16,263, and projects for all other public entities over $2,000. They apply for projects in buildings owned or leased by state or local governments.

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.

New Jersey also has a separate set of prevailing wage laws for contractors providing “building services” to state-owned or leased buildings. “Building services” are defined as regular building maintenance and cleaning services.

Prevailing wage rates

Wage determinations for construction projects are issued by the New Jersey Department of Labor and Workforce Development, Division of Wage and Hour Compliance, Public Contracts Section. Determinations are based on the date the contract is awarded for a project and must be posted on-site where they are visible to all workers.

Wage determinations set the hourly wage, value of fringe benefits, and total hourly compensation for a variety of worker classifications.

For example, here are some wage rates for journeymen in Morris County (accessed July 12, 2023):

JobWageFringeTotal
Carpenter$51454  $32.73  $87.27
Drywall finisher$42.88$29.54$72.42
Glazier$50.53$30.14$80.67

Building services rates are based on those issued by the GSA federal wage determinations. Federal wage determinations can be found at SAM.gov.

To find a building services rate:

  • Click on "Search Wage Determinations"
  • Select Wage Determination Type "Service Contract Ace (SCA)"
  •  Select “New Jersey,” and select the county where the services are to be performed
  • Click on WD# you want to open
  • Click on Print/Download to print Wage Determination
  • For Wage Determination History, click on "History"

Below is a list of common classifications for building service employees. Using the Occupation Code will make it easier to find the corresponding wage rate:

  • Janitor: 11150
  • Window Cleaner: 11360
  • Laborer: 23470
  • Boiler Tender: 25010
  • Stationary Engineer: 25070
  • Ventilation Equipment Tender: 25190
  • Guard I (Security Guard): 27101
  • Guard II (Security Guard): 27102
  • Swimming Pool Operator: 28690
  • Pest Controller (Exterminator): 99410

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How to deal with higher labor costs

If you’re new to prevailing wage projects, the labor rates may be much higher than you’re used to paying on normal projects. While some project costs can be deferred until you receive payment from your customer, payroll can’t wait.

Higher labor costs can put a real crunch on your cash flow during a prevailing wage job. You need to keep a close eye on your project cash flow to ensure you have enough on hand to pay your workers on time, and still be able to pay other bills. 

Building prevailing wages into your estimates and bids isn’t enough. Public projects are notorious for long payment delays. If you don’t have sufficient cash in the bank, you need to find ways to delay paying for some project costs until you get paid by your customer.   

One solution: Material financing allows contractors to use another company’s money to purchase building materials, with repayment terms that stretch up to 120 days. This allows you to save your own cash for payroll while you wait for your invoices to get paid. 

Other financing options for contractors may allow them to access funds to cover other project costs, like mobilization and payroll expenses, when they take on bigger projects.

Who is subject to prevailing wage rates?

All contractors and subcontractors whose workers provide hands-on labor for a public works project in New Jersey are subject to prevailing wage laws. In addition, workers that provide building services to state-owned or leased buildings are subject to prevailing wage laws.

In order to work on a prevailing wage project in New Jersey, all contractors must register with the Division of Wage and Hour Compliance. There is a $300 annual fee for registration. After two years, contractors can register for two years for $500. Contractors receive a certificate with their registration that must be presented with all public project bids as proof of registration.

Overtime

According to New Jersey state law, workers working over 40 hours in a workweek are to be paid time and a half. However, some wage determinations require overtime pay when workers work over eight hours a day, and double time for certain days and holidays. Check the determination carefully for specific instructions regarding overtime.

Certified payroll reports

All contractors working on a prevailing wage project in New Jersey must complete and turn in a certified payroll report within 10 days of the payment of wages. These reports are to be turned in directly to the contracting authority.

Learn more about certified payroll reports

How to submit certified payroll reports

Certified payroll reports must be sent directly to the contracting authority within 10 days of the payment of wages. Any reports turned in to the general contractor will not be considered received until they are turned in to the contracting authority.

Prevailing wage penalties

The penalties for misreporting or not paying workers correctly include any of the following:

  • Charged with a disorderly persons' offense, with fines of $100-$1,000 and/or imprisonment from 10 to 90 days.
  • Administrative penalties up to $2,500 for the first violation, and up to $5,000 for each subsequent violation.
  • A stop work order, halting all public work by the contractor.

When assessing penalties, each week a violation occurs is considered a separate offense.

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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. 

Deadlines apply: If you think your wages aren’t right, you must file a protest within two years from the date wages were paid to you.

For those working on New Jersey public jobs (and other eligible jobsites), pay attention to your pay stubs and compare them with prevailing wage rates. And keep good records! You can make a claim up to two years later, but you’ll have to have the paperwork to back up any claims.

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Prevailing Wages

Written by

Dawn Killough

33 articles

Dawn Killough is a writer with over 20 years of experience in construction, having worked as a staff accountant, green building advisor, project assistant, and contract administrator. She shares fundamental green building strategies and techniques in her book, Green Building Design 101. Dawn lives in Portland, Oregon.

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