Concerns enforcement of public work project requirements; establishes penalties for failure to submit payroll records.

A1348

ASSEMBLY, No. 1348

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman CODY D. MILLER

District 4 (Atlantic, Camden and Gloucester)

SYNOPSIS

���� Concerns enforcement of public work project
requirements; establishes penalties for failure to submit payroll records.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act
concerning the enforcement of public work project
requirements and supplementing and amending P.L.1963, c.150 and P.L.1999,
c.238.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� (New section)� The
Legislature finds and declares that:

���� a.���� The certified payroll
and subcontractor registration requirements in New Jersey�s public works laws
are essential to protecting workers, ensuring fair competition, and preventing
wage theft and misclassification.

���� b.��� Low-level administrative
penalties have been insufficient to effectively deter willful violations of New
Jersey�s public work project requirements.

���� c.���� Strengthened penalties
and enhanced enforcement are necessary to ensure that contractors comply with
prevailing wage, payroll, and registration requirements.

���� 2.��� Section 11 of P.L.1963,
c.150 (C.34:11-56.35) is amended to read as follows:

���� 11. (a) Any employer who
willfully hinders or delays the commissioner in the performance of his duties
in the enforcement of
[
this
act
]

P.L.1963,
c.150 (C.34:11-56.25 et seq.)
, or fails to make, keep, and preserve any
records as required under the provisions of
[
this
act
]

P.L.1963,
c.150 (C.34:11-56.25 et seq.)
, or falsifies any such record, or refuses to
make any such record accessible to the commissioner upon demand, or fails to
timely respond to or furnish records required by a subpoena issued by the
commissioner, or refuses to furnish a sworn statement of such record or any
other information required for the proper enforcement of
[
this act
]

P.L.1963,
c.150 (C.34:11-56.25 et seq.)
to the commissioner upon demand, or pays or
agrees to pay wages at a rate less than the rate applicable under
[
this act
]

P.L.1963,
c.150 (C.34:11-56.25 et seq.)
or otherwise violates any provision of
[
this act
]

P.L.1963,
c.150 (C.34:11-56.25 et seq.)
or of any regulation or order issued under
[
this act
]

P.L.1963,
c.150 (C.34:11-56.25 et seq.)
shall be guilty of a disorderly persons
offense and shall, upon conviction therefor, be fined not less than $100.00 nor
more than $1,000 or be imprisoned for not less than 10 nor more than 90 days,
or by both such fine and imprisonment.� Each week, in any day of which a worker
is paid less than the rate applicable to him under
[
this act
]

P.L.1963,
c.150 (C.34:11-56.25 et seq.)
and each worker so paid, shall constitute a
separate offense.� In addition to the foregoing fines, and in addition to or as
an alternative to any criminal proceedings, if an employer fails to comply with
any lawfully issued subpoena, or on the refusal of any witness to testify to
any matter regarding which the witness may be lawfully interrogated, the
commissioner may apply to the Superior Court to compel obedience by proceedings
for contempt, in the same manner as in failure to comply with the requirements
of a subpoena issued from the court or a refusal to testify in the court.

���� (b)�� As an alternative to or
in addition to any other sanctions provided by law for violations of any
provision of P.L.1963, c.150 (C.34:11-56.25 et seq.), when the Commissioner of
Labor and Workforce Development finds that an employer has violated that act, the
commissioner is authorized to assess and collect administrative penalties,
[
up to a
maximum of $2,500 for a first violation and up to a maximum
]
of
not
less than
$5,000
and not more than $10,000 for a first violation, and
not less than $10,000 and not more than $25,000
for each subsequent
violation, specified in a schedule of penalties to be promulgated as a rule or
regulation by the commissioner in accordance with the "Administrative
Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).�
Each week in
which a worker is paid less than the required rate, and each worker so
underpaid, shall constitute a separate violation.
� When determining the
amount of the penalty imposed because of a violation, the commissioner shall
consider factors which include the history of previous violations by the
employer, the seriousness of the violation, the good faith of the employer
[
and
]

,
the
size of the employer's business
, and whether the violation was willful
.�
No administrative penalty shall be levied pursuant to this section unless the
Commissioner of Labor and Workforce Development provides the alleged violator
with notification of the violation and of the amount of the penalty by
certified mail and an opportunity to request a hearing before the commissioner
or his designee within 15 days following the receipt of the notice. If a
hearing is requested, the commissioner shall issue a final order upon such
hearing and a finding that a violation has occurred. If no hearing is
requested, the notice shall become a final order upon expiration of the 15-day
period.� Payment of the penalty is due when a final order is issued or when the
notice becomes a final order.� Any penalty imposed pursuant to this section may
be recovered with costs in a summary proceeding commenced by the commissioner
pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274
(C.2A:58-10 et seq.).� Any sum collected as a fine or penalty pursuant to this
section shall be applied toward enforcement and administration costs of the
Division of Workplace Standards in the Department of Labor and Workforce
Development.

���� (c)�� When the Commissioner of
Labor and Workforce Development finds that the employer has violated provisions
of P.L.1963, c.150 (C.34:11-56.25 et seq.), the commissioner may refer the
matter to the Attorney General or his designee for investigation and prosecution.�
Nothing in this subsection shall be deemed to limit the authority of the
Attorney General to investigate and prosecute violations of the New Jersey Code
of Criminal Justice, nor to limit the commissioner's ability to refer any
matter for criminal investigation or prosecution.

���� (d)�� If the commissioner
makes an initial determination that an employer has violated the provisions of
P.L.1963, c.150 (C.34:11-56.25 et seq.) by paying wages at rates less than the
rates applicable under that act, whether or not the commissioner refers the matter
to the Attorney General or other appropriate prosecutorial authority for
investigation or prosecution pursuant to subsection (c) of this section, the
commissioner may immediately issue a stop-work order to cease all business
operations at one or more worksites or across all of the employer's worksites
and places of business.� The stop-work order may be issued only against the
employer found to be in violation or non-compliance.� If a stop-work order has
been issued against a subcontractor pursuant to this subsection, the general
contractor shall retain the right to terminate the subcontractor from the
project.� The stop-work order shall remain in effect until the commissioner
issues an order releasing the stop-work order upon finding that the employer has
agreed to pay wages at the required rate and has paid any wages due and any
penalty deemed satisfactory to the commissioner.� Once the stop-work order is
issued, any employee affected by a stop-work order issued pursuant to this
section shall be entitled to pay from the employer for the first ten days of
work lost because of the stop-work order.� Upon request of any employee not
paid wages, the commissioner can take assignment of the claim and bring any
legal action necessary to collect all that is due.� As a condition for release
from a stop-work order, the commissioner may require the employer to file with
the department periodic reports for a probationary period that shall not exceed
two years that demonstrate the employer's continued compliance with the
provisions of P.L.1963, c.150 (C.34:11-56.25 et seq.).� The commissioner may
assess a civil penalty of $5,000 per day against an employer for each day that
it conducts business operations that are in violation of the stop-work order.�
That penalty shall be collected by the commissioner in a summary proceeding in
accordance with the "Penalty Enforcement Law of 1999," P.L.1999,
c.274 (C.2A:58-10 et seq.).

(cf: P.L.2021, c.165, s.5)

���� 3.��� (New section)� a. �A
contractor or subcontractor engaged in public work shall submit a complete and
accurate certified payroll record within 10 days of the payment of wages, in
the form prescribed by the commissioner pursuant to P.L.1963, c.150
(C.34:11-56.25 et seq.).

���� b.��� Any contractor or
subcontractor who fails to submit a certified payroll record within 10 days of
the payment of wages shall be subject to a civil penalty of $1,000 per project,
for each day of noncompliance.

���� c.���� Any contractor or
subcontractor who knowingly submits a false certified payroll record shall be subject
to a civil penalty of $15,000 for a first offense and $25,000 for each
subsequent offense within five years.

���� d.��� Each payroll period and
each affected worker shall constitute a separate violation.

���� e.���� Upon notice of
noncompliance, a public body shall withhold contract payments sufficient to
cover unpaid wages and penalties until compliance is achieved.

���� 4.��� Section 14 of P.L.1963,
c.150 (C.34:11-56.38) is amended to read as follows:

���� 14.� The public body awarding
any contract for public work, or otherwise undertaking any public work, or
entering into a lease or agreement to lease pursuant to which public work is to
be done, shall first ascertain from the commissioner the list of names of
contractors or subcontractors who have failed to pay prevailing wages as
determined in section 13 of
[
this
act
]

P.L.1963,
c.150 (C.34:11-56.37) or failed to submit certified payroll records pursuant to
section 7 of P.L.1963, c.150 (C.34:11-56.31)
, and no contract shall be
awarded to such contractor or subcontractor, or to any firm, corporation or
partnership in which such contractor or subcontractor has an interest until
three years have elapsed from the date of listing as determined in section 13
of
[
this
act
]

P.L.1963,
c.150 (C.34:11-56.37)
.

����
The prohibition period
shall be five years if, within any five-year period, a contractor or
subcontractor is found to have committed two or more violations involving:

����
(1) failure to submit
certified payroll records for consecutive payroll periods;

����
(2) knowingly submitting
false payroll records; or

����
(3) willful payment of less
than the prevailing wage.

���� For purposes of this section,
"interest" shall mean an interest in the firm, corporation or
partnership bidding on, or performing public work, whether having the interest
as an owner, partner, officer, manager, employee, agent, consultant or representative.�
The term may also include, but not be limited to, all instances in which the
contractor or subcontractor listed by the commissioner under section 13 of
[
this act
]

P.L.1963,
c.150 (C.34:11-56.37)
has received payments, whether those payments are in
the form of cash or any other form of compensation from the firm, corporation
or partnership, or when the contractor or subcontractor listed by the
commissioner under section 13 of
[
this
act
]

P.L.1963,
c.150 (C.34:11-56.37)
has entered into any contract or agreement with the
firm, corporation or partnership for services performed or to be performed, for
services that have been or will be assigned or subletted, or for the sale,
rental or lease of vehicles, tools, equipment or supplies during the period
from the initiation of the proceedings under section 13 of
[
this act
]

P.L.1963,
c.150 (C.34:11-56.37)
against the contractor or subcontractor until three
years have elapsed from the date that the contractor or subcontractor has been
listed by the commissioner under section 13 of
[
this act
]

P.L.1963,
c.150 (C.34:11-56.37)
.� The term "interest" shall not include
shares held in a publicly traded corporation if the shares were not received as
compensation after the initiation of proceedings under section 13 of
[
this act
]

P.L.1963,
c.150 (C.34:11-56.37)
from a firm, corporation or partnership bidding or
performing public work.

���� A rebuttable presumption that
a contractor or subcontractor listed by the commissioner under section 13 of
[
this act
]

P.L.1963,
c.150 (C.34:11-56.37)
has an interest in another firm, corporation or
partnership may arise if the two share any of the following capacities or
characteristics: (1) perform similar work within the same geographical area and
within the same monetary range, (2) occupy the same premises, (3) have the same
telephone number or fax number, (4) have the same email address or internet
website, (5) employ substantially the same administrative employees, (6)
utilize the same tools and equipment, (7) employ or engage the services of any
listed person or persons involved in the direction or control of the other, or
(8) list substantially the same work experience in order to obtain the
requisite pre-qualification rating from the Department of the Treasury, or any
other entity, to participate in any public work.

���� If a rebuttable presumption
has arisen that a contractor or subcontractor listed by the commissioner under
section 13 of
[
this
act
]

P.L.1963,
c.150 (C.34:11-56.37)
has an interest in another firm, corporation or
partnership, the adversely affected contractor or subcontractor, including the
firm, corporation or partnership, which would by virtue of a finding of
"interest" be prevented under this section from being awarded public
work, may request a hearing, which shall be conducted in accordance with the
"Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

(cf: P.L.2007, c.67, s.1)

���� 5.��� Section 4 of P.L.1999,
c.238 (C.34:11-56.51) is amended to read as follows:

���� 4.��� No contractor shall bid
on any contract for public work as defined in section 2 of P.L.1963, c.150
(C.34:11-56.26) , or for which payment of the prevailing wage is required by
any other provision of law, unless the contractor is registered pursuant to
[
this act
]

P.L.1999,
c.238 (C.34:11-56.48 et seq.).
� No contractor shall list
or utilize

a subcontractor in a bid proposal for the contract unless the subcontractor is
registered pursuant to P.L.1999, c.238 (C.34:11-56.48 et seq.) at the time the
bid is made
and throughout the performance of the contract
.� No
contractor or subcontractor, including a subcontractor not listed in the bid
proposal, shall engage in the performance of any public work subject to the
contract, unless the contractor or subcontractor is registered pursuant to that
act.

����
A contractor that knowingly
utilizes an unregistered subcontractor shall be subject to a civil penalty of
$10,000 per subcontract for a first offense and $25,000 per subcontract for
each subsequent offense within five years, and shall be jointly and severally
liable for any unpaid wages, benefits, and penalties arising from the
subcontractor�s violations.

(cf: P.L.2019, c.376, s.2)

���� 6.��� This act shall take
effect on the first day of the fourth month following enactment, except that
the Commissioner of Labor and Workforce Development may take any advance
anticipatory administrative action as may be necessary to implement the
provisions of this act.

STATEMENT

���� This bill concerns the
enforcement of public work project requirements and the submission of certified
payroll records.�

���� The bill increases penalties
for violations of the prevailing wage law and �The Public Works Contractor
Registration Act.�

���� Under current law, the maximum
administrative penalty that may be assessed for violations of the prevailing
wage law is $2,500 for a first violation and $5,000 for each subsequent
violation.� The bill raises the penalty range to between $5,000 and $10,000 for
a first violation, and between $10,000 and $25,000 for each subsequent
violation.

���� Further, the bill establishes
civil penalties related to the submission of certified payroll records.� A contractor
or subcontractor who fails to submit a certified payroll record within 10 days
of the payment of wages will be subject to a civil penalty of $1,000 per
project, for each day of noncompliance.� A contractor or subcontractor who
knowingly submits a false certified payroll record will be subject to a civil
penalty of $15,000 for a first offense and $25,000 for each subsequent offense
within five years.� Each payroll period and each affected worker constitutes a
separate violation.

���� The bill extends the period a
contractor or subcontractor may be prohibited from receiving a contract for
public work.� Under current law, the prohibition is three years if the
contractor or subcontractor failed to pay prevailing wages.� The bill includes
failure to submit certified payroll records in the existing three year
prohibition.� The prohibition period will be five years if, within any
five-year period, a contractor or subcontractor is found to have committed two
or more violations involving:

���� (1) failure to submit
certified payroll records for consecutive payroll periods;

���� (2) knowingly submitting false
payroll records; or

���� (3) willful payment of less
than the prevailing wage.

���� Finally, the bill provides
that a contractor that knowingly utilizes an unregistered subcontractor is
subject to a civil penalty of $10,000 per subcontract for a first offense and
$25,000 per subcontract for each subsequent offense within five years, and is
jointly and severally liable for any unpaid wages, benefits, and penalties
arising from the subcontractor�s violations.