Frequently Asked Questions
1. What is the New Jersey Prevailing
Wage Act?
2. What is the difference between the Davis-Bacon Act and
the New Jersey Prevailing Wage Act?
3. What is public work?
4. What is a public body?
5. As a public body, we are required to award contracts to
the lowest responsible bidder. What does “responsible” mean?
6. Are all projects subject to prevailing rate?
7. How does the DOL Commissioner determine "locality"
for the purposes of determining prevailing wage rates?
8. What are wage determinations?
9. Is there any requirement to post the wage rates for the
various classifications of workers?
10. What do I do when I am unsure of which classification
to use?
11. What responsibilities do contractors and subcontractors
have while performing covered public projects?
12. What happens if the wage rates change after I have submitted
my bid or started work?
13. How often do I have to pay my employees on a public
construction project?
14. What is a certified payroll record?
15. How often are certified payroll submitted to the public
entity?
16. Do owner/operators who perform covered work have to
be included on certified payrolls?
17. The prime contractor requires the subcontractor to file
certified payrolls with them. Does this satisfy the subcontractor's filing
requirements with the awarding public body?
18. As a corporate officer who performs craft type work
on public construction, must I report myself on the certified payrolls?
19. On many public projects, particularly highways, state
and federal laws both apply but require different rates and standards?
20. Can I pay my employee a training wage while he is learning
the job?
21. Do foremen have to be paid prevailing rates of pay?
22. What should I do if I don't know whether or not a project
is subject to the New Jersey Prevailing Wage Act?
23. What should workers do if they believe they may have
not been paid properly?
24. As a worker on a public works project what records should
I keep?
25. What happens if a contractor/subcontractor fails to
pay all of its employees properly?
26. Is any further action taken against the violating contractor?
27. What types of fringe benefits may a company take credit
for, towards the Prevailing Wage frbenefit rate?
Q. What is the New Jersey Prevailing
Wage Act?
A. The Act which affects prime contractors
and subcontractors who perform work on any state or political subdivision
construction contracts which exceed the current contract threshold amount.
This law protects construction workers such as carpenters, plumbers, power
equipment operators, laborers, etc. Covered workers must receive the appropriate
craft prevailing wage rate as determined by the Commissioner of Labor.
Prevailing wage means the basic hourly rate of pay, and the bona fide
benefit rate of contribution.
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Q. What is the difference between
the Davis-Bacon Act and the New Jersey Prevailing Wage Act?
A. The Davis-Bacon Act (DBA) pertains to
public construction projects awarded by a federal agency, such as work
on military bases and U.S. Postal Service buildings. Certified payrolls
must be filed with the proper federal agency. The New Jersey Wage and
Hour office does not monitor projects which are covered exclusively by
the DBA.
The New Jersey Prevailing Wage Act applies to public works contracts awarded
by the state, a political subdivision of the state or a regional school
board. Examples of projects covered by the New Jersey Prevailing Wage
Act include schools, roads, water and sewer systems, airports, dams, and
public buildings. Certified payrolls must be filed weekly with the appropriate
awarding public body.
Some projects such as airports and highways, may be subject to both the
DBA and the New Jersey Prevailing Wage Act. In these cases, the law which
provides more protection or sets the highest standards applies.
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Q. What is public work?
A. N.J.S.A. 34:11-56.26(5) defines public
work as "…construction, reconstruction, demolition, alteration,
or repair work, or maintenance work, including painting and decorating,
done under contract and paid for in whole or in part out of the funds
of a public body…"
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Q. What is a public body?
A. N.J.S.A. 34:11-56.26(4) defines a public
body as "…the State of New Jersey, any of its political subdivisions,
any authority created by the Legislature of the State of New Jersey and
any instrumentality or agency of the State of New Jersey or of any of
its political subdivisions."
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Q. As a public body, we are required
to award contracts to the lowest responsible bidder. What does “responsible”
mean?
A. Responsible means per statute, the ability
to complete the contract in accordance with its requirements, including
but not limited to requirements pertaining to:
• Experience;
• Moral Integrity
• Operating Capacity;
• Financial Capacity;
• Credit;
• Workforce;
• Equipment; and
• Facilities Availability
See N.J.S.A. 18A:18A-3x.
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Q. Are all projects subject to
prevailing rate?
A. In order for a project to be covered
three conditions must exist:
1. There must be an agreement between a public body and a contractor;
2. The contract must be to perform "public work" as defined
as the construction, reconstruction, demolition, alteration, or repair
work, or maintenance work, including painting and decorating, done under
contract and paid for in whole or in part out of the funds of a public
body, except work performed under the rehabilitation program. "Public
work" shall also mean construction, reconstruction, demolition, alteration,
or repair work, done on any property or premises, whether or not the work
is paid for from public funds, if, at the time of the entering into of
the contract:
i. Not less than 55 percent of the property or premises is leased by a
public body, or is subject to an agreement to be subsequently leased by
the public body; and
ii. the portion of the property or premises that is leased or subject
to an agreement to be subsequently leased by the public body measures
more than 20,000 square feet.
3. The total value of the project must be at least $10,743, if the work
is being done for a municipality or $2,000 if the work is being done for
any other public entity, including boards of education and municipal utility
authorities.
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Q. How does the Commissioner determine
"locality" for the purposes of determining prevailing wage rates?
A. Prevailing wage rates are generally set
for each of the State's twenty-one (21) counties.
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Q. What are wage determinations?
A. A "wage determination" lists
the wage and fringe benefit rates for each classification of laborer and
craftsman which the Commissioner of Labor has determined to be prevailing
in a given locality. The public body must provide a copy of the wage determination
issued for a project at the time of bidding. Note: the public body’s
failure to supply rates is not sufficient defense for the contractor's
failure to pay prevailing rate.
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Q. Is there any requirement to post the wage rates for
the various classifications of workers?
A. Yes. The scale of wages must be posted
in a prominent and accessible place at the work site or at such places
that are used by employers to pay workers their wages.
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Q. What do I do when I am unsure of which classification
to use?
A. Contact the Division of Wage and Hour
Compliance at (609) 292-2259 or 292-2283.
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Q. What responsibilities do contractors and subcontractors
have while performing covered public projects?
A. Contractors and subcontractors must:
1. be registered with the Department of Labor, pursuant to the Public
Works Contractor Registration Act;
2. pay prevailing wage rates based upon work classifications actually
worked for all actual hours of work;
3. post a wage determination in a prominent place where workers have access;
4. submit certified payroll records to the public body within 10 days
of payday;
5. permit on-site inspection and employee interviews by authorized representatives
of the Commissioner of Labor; and
6. produce payroll-related records to authorized representatives of the
Commissioner within 10 days of a request.
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Q. What happens if the wage rates change after I have
submitted my bid or started work?
A. The Craft Prevailing Wage Rate in effect
at the time the contract is awarded applies, but the contractor is responsible
to comply with any projected wage rate increases indicated in that wage
determination.
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Q. How often do I have to pay my employees on a public
construction project?
A. All employers must pay wages to all employees
in full at least twice a calendar month.
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Q. What is a certified payroll record?
A. A "certified payroll record"
is a payroll record which is certified by a principal or authorized agent
of any business entity employing covered workers on a public project,
to be true and accurate.
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Q. How often are certified payroll submitted to the public
entity?
A. Such records shall be submitted for each
payroll period within ten (10) days of the payment of wages.
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Q. Do owner/operators who perform covered work have to
be included on certified payrolls?
A. Yes. The information required for owner/operators
is the same as for employees, with no exceptions.
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Q. The prime contractor requires the subcontractor to
file certified payrolls with them. Does this satisfy the subcontractor's
filing requirements with the awarding public body?
A. No. The law requires that all subcontractors
and contractors file certified payrolls within 10 days of pay dates with
the awarding public body. An original signature certifying the accuracy
of the payroll records is required on the payroll filed with the public
body.
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Q. As a corporate officer who performs craft type work
on public construction, must I report myself on the certified payrolls?
A. Yes. You are an employee of the corporation.
Therefore, you must report and pay yourself just as you would any other
employee.
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Q. On many public projects, particularly highways, state
and federal laws both apply but require different rates and standards?
A. The highest standard applies, whichever
rate is higher must be paid.
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Q. Can I pay my employee a training wage while he is
learning the job?
A. No. Unless your employee is enrolled
in a bona fide apprenticeship plan which your company or collective bargaining
unit has been approved or certified by the Division of Vocational Education,
New Jersey Department of Education or by the Bureau of Apprenticeship
and Training, U.S. Department of Labor.
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Q. Do foremen have to be paid prevailing rates of pay?
A. Yes. Foremen who are performing "hands
on" work must be paid prevailing rates of pay in the appropriate
classification (s) for the "hands on" work.
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Q. What should I do if I don't know whether or not a
project is subject to the New Jersey Prevailing Wage Act?
A. The Department of Labor can determine
whether a project is subject to the New Jersey Prevailing Wage Act. Contact
the Division of Wage and Hour Compliance at (609) 292-2283.
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Q. What should workers do if they believe they may have
not been paid properly?
A. File a compliant with the ACC, or contact
the Division of Wage and Hour Compliance at (609) 292-2283.
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Q. As a worker on a public works
project what records should I keep?
A. Workers should keep a record of their
hours and save their pay stubs to help verify the amount of wages received.
If work is being performed in more than one classification, the worker
should identify at what time of the day he was doing the various jobs,
as well as the total hours worked in each classification.
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Q. What happens if a contractor/subcontractor fails to
pay all of its employees properly?
A. The Department of Labor will investigate
and take the necessary action to recover wages determined to be due.
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Q. Is any further action taken against the violating
contractor?
A. Contractors who violate the provisions
of the Prevailing Wage Act are subject to the following: administrative
fees and civil and/or penalties, and may be prohibited from engaging in
future public works projects.
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Q. What types of fringe benefits may a company take credit
for, towards the Prevailing Wage fringe benefit rate?
A. A company may take credit for the actual
cost of providing their employees certain fringe benefits, such as: Medical/Hospitalization
coverage, Dental coverage, Pension or Retirement plan, Paid Time Off (vacation,
holidays, sick days), or Life Insurance. To calculate the benefit cost
per hour, divide the annual cost of the benefits by 2,000 hours, for each
employee. This amount should be entered in Column 10 of the Certified
Payroll Form, for each employee.
Items such as use of company vehicles or cell phones, lodging reimbursement,
or company-provided tools may not be credited towards the Prevailing Wage.
Under no circumstances may statutory deductions (Unemployment Insurance,
Income Tax, etc.), Workers' Compensation Insurance, or the portion of
any fringe benefit that is deducted from the employee's pay, be credited
towards the Prevailing Wage.
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