New Jersey Division of Local Government Services Local Finance Notice 2021-20

This notice reminds local government and school district contracting units of public works contractor registration, prevailing wage, debarment, and equal opportunity/affirmative action requirements.

Public Works Contractor Registration and Prevailing Wage

• New Jersey’s Public Works Contractor Registration Act requires contractors and subcontractors working on public works projects covered under the Prevailing Wage Act to be registered with the Department of Labor.
• The Prevailing Wage Act applies to public works contracts for construction, reconstruction, demolition, alteration, custom fabrication or repair work, or maintenance work.
• P.L. 2019, c.44 amended the definition of custom fabrication to include “any other fabrication”, and P.L. 2021, c.253 added “one or more signs in a project which cost a total of more than $30,000” to the definition.
• Maintenance work encompasses the repair of existing facilities when the size, type or extent of such facilities is not changed or increased, and any work on a maintenance-related project exceeding $50,000.
• A prevailing wage of $16,263 applies to contracts awarded directly by municipalities, and $2,000 applies to all other public entities.
• All contractors, subcontractors, and lower tier subcontractors who bid on or engage in the performance of any public works contract subject to Prevailing Wage Act, and after April 1, 2020, any contract for which another State law requires payment of prevailing wage, must register with the Department of Labor.
• A contractor must have its prevailing wage certificate before responding to a competitive quotation or agreeing to perform work for school districts or other non-municipal public entities.
• The contractor and all subcontractors must provide certified payroll records for each employee performing work on a prevailing wage project. The contracting unit must collect, file, and store all certified payroll records.
• A contractor must provide a written certification to the contracting unit that they are not debarred at the federal level from contracting with a federal government agency. This is done by identifying any individuals or entities that own more than 50% of the contractor.
• When awarding an emergency contract, the contracting unit should use the SAM database to verify that the contractor is not debarred on the federal level. If the contractor is debarred, the contracting unit should consult legal counsel to determine whether the debarred contractor must be paid.

Recent Amendments to Project Labor Agreement Law

• A local government or school district contracting unit may enter into a project labor agreement for any public works project that requires payment of prevailing wage under State law and has a total project cost of $5 million or more.
• The governing body should put their determination on the record and pass a resolution memorializing their determination that a project labor agreement will promote labor stability and advance the contracting unit’s interests.
• A project labor agreement shall be made binding on all contractors and subcontractors on a public works project by including appropriate language in the bid specifications and bid documents.
• Project labor agreements may permit contractors to retain a percentage of their current workforce and require that the successful bidder be unaffiliated with labor organizations.

Local Finance Notice 2021-20

Please follow the link below to read more about these items and guidance on how your local unit can implement them: https://www.nj.gov/dca/divisions/dlgs/lfns/21/2021-20.pdf

Contact Wielkotz & Company, LLC Today

For further information on Local Finance Notice 2021-20 and its implementation feel free to reach out to Steven Wielkotz at (973)-835-7900 ext. 201 or sdw@w-cpa.com.