On January 8, 2024, Governor Phil Murphy signed S1438 / A5794, which amended New Jersey’s State Prevailing Wage Act to permit unions to file prevailing wage claim suits on behalf of workers on covered projects regardless of whether the workers belong to the union. The law took effect immediately. The Prevailing Wage Act requires employers to pay certain minimum rates, as determined by the New Jersey Department of Labor and Workforce Development (NJDOLWD), to workers working on public works projects. Prevailing wage rates are usually determined by reference to union contracts covering workers performing the same kind of work in the geographic area in which the work is taking place. These rates can vary based on which county the project is based in and the type of work for a specific project.  

New Jersey law has always permitted a union representing workers on a project to commence an action in court on their behalf, but the new law goes one step further. Regardless of whether the union represents the worker(s) employed on the project, the organization now has a green light to sue a contractor or subcontractor for any unpaid wages owed to such individuals. The only caveat, according to the law, is that prior to a union representing a worker who is not a member of its organization, the worker must consent in writing to such representation.

If found liable, employers that violate the Prevailing Wage Act are on the hook for unpaid wages plus any interest owed, and penalties or liquidated damages. Additionally, if a court finds a contractor or subcontractor at fault, the prevailing party (which now may include labor organizations) is entitled to reasonable attorney’s fees and costs, including expert witness fees. The only procedural requirement for a labor organization prior to initiating a lawsuit is to provide the contractor or subcontractor with at least 30 days’ notice “by first-class mail,” which needs only:

describe the general nature of the claim and shall not limit the responsibility of the contractor or preclude subsequent amendments of an action to encompass additional workers employed by the subcontractor, unless the worker's performance of labor under the contract is pursuant to a collective bargaining agreement to which the employing contractor or subcontractor is signatory, wherein there are lawful remedies by which unpaid wages may be collected.

In short, the law effectively creates a new “watch dog” for the NJDOLWD for prevailing wage violations by allowing unions to sue on behalf of any worker.

New Jersey contractors engaged in public works are strongly encouraged to review their pay practices and if necessary, consult with experienced wage and hour counsel. Whether a business has a unionized workforce is entirely immaterial to whether they must pay prevailing wages on a public works project, and with the enactment of this new law as any contractor or subcontractor performing prevailing wage work can be sued by a union.