A5801

An Act concerning the responsibility of owners for wage claims against subcontractors and supplementing chapter 11 of Title 34 of the Revised Statutes.

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

1. a. (1) For any contract entered into on or after January 1, 2020 for the erection, construction, reconstruction, alteration, maintenance or repair of any building in the State, including, but not limited to, any such work performed under a contract entered into on or after January 1, 2020 under which workers are required by any State law to be paid the prevailing wage rates set pursuant to the “New Jersey Prevailing Wage Act,” P.L.1963, c.150 (C.34:11-56.25 et seq.), the owner making or taking the contract shall assume, and be responsible for, any debt owed to a wage claimant, or third party on the wage claimant’s behalf, incurred by a subcontractor at any tier acting under, by, or for the owner for the wage claimant’s performance of labor under the contract.

(2) The owner’s responsibility under the provisions of this section shall extend only to unpaid wages, benefits and other contributions, plus any interest owed, but shall not extend to penalties or liquidated damages.

(3) An owner or any other person shall not evade, or commit any act that negates, the requirements of this section. This section does not prohibit an owner or subcontractor at any tier from establishing by contract or enforcing any otherwise lawful remedies against a subcontractor it hires for responsibility created by the nonpayment of wages, benefits and other contributions, by that subcontractor or by a subcontractor at any tier working under that subcontractor.

b. (1) The Commissioner of Labor and Workforce Development may enforce against an owner the responsibility for unpaid wages created by this section by any action that the commissioner is authorized to undertake regarding responsibility for unpaid wages under the provisions of chapter 11 of Title 34 of the Revised Statutes.

(2) A joint labor-management cooperation committee established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. s.175a) which includes a union representing any of the workers employed in a project subject to the provisions of this section may bring an action in any court of competent jurisdiction against an owner or subcontractor at any tier for unpaid wages, benefits and other contributions owed to a wage claimant by the owner or subcontractor for the performance of any work subject to the provisions of this section, including unpaid wages owed by the owner, pursuant to subsection a. of this section. The court shall award a prevailing plaintiff in such an action its reasonable attorney’s fees and costs, including expert witness fees. Prior to commencement of an action against an owner to enforce the responsibility created by subsection a. of this section, the committee shall provide the owner and subcontractor that employed the wage claimant with at least 30 days’ notice by first-class mail. The notice need only describe the general nature of the claim and shall not limit the responsibility of the owner or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor.

(3) No party other than the parties indicated in this subsection b. may bring an action against an owner to enforce the responsibility created by subsection a. of this section.

c. (1) Upon request by an owner, project manager, or contractor to a subcontractor, the subcontractor shall provide payroll records of its employees who are providing labor on work subject to the provisions of this section, which payroll records shall include wages and, as applicable, other benefit payments or contributions. The payroll records shall not be modified except to prevent disclosure of an individual’s full social security number, but shall provide the last four digits of the social security number.

(2) Upon request of an owner to a project manager, contractor, or subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide the owner information that includes the project name, name and address of the subcontractor, owner with whom the subcontractor is under contract, anticipated start date, duration, and estimated journeyworker and apprentice hours, and contact information for its subcontractors on the project.

(3) A subcontractor’s failure to comply with this section shall not relieve an owner from any of the obligations contained in this section.

(4) Any subcontractor who fails to provide records or information requested pursuant to this subsection f. within 14 days of when the request was made shall be subject to a civil penalty in an amount not to exceed $7,500 for each day the employer fails to provide the notification, collectible by the commissioner in a summary proceeding pursuant to the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A:58-10 et seq.). The commissioner shall have the authority to waive this penalty.

d. Unless otherwise provided by law, property of the owner may be attached, after trial, for the payment of any judgment received pursuant to this section.

e. An action brought pursuant to this section shall be filed within two years from the date of the occurrence of the incident alleged in the action.

f. This section shall not apply to work performed by an employee of the State, a special district, a city, a county, a city and county, or any political subdivision of the State.

g. For purposes of this section, “owner” means an entity that has a direct contractual relationship with a contractor or project manager and “subcontractor” means a contractor that does not have a direct contractual relationship with an owner, but has a contractual relationship with a project manager, a contractor or with another subcontractor for work performed on work subject to the provisions of this section.

h. Nothing in this section shall alter the obligation under any other provision of State law of an owner to pay in a timely manner a contractor, or of an owner to pay in a timely manner a subcontractor, or any penalties for failing to do so, except that the owner may withhold as “disputed” all sums owed if a subcontractor does not provide in a timely manner the information requested under paragraphs (1) and (2) of subsection c. of this section, until that information is provided.

2. If any clause, sentence, paragraph, section or other part of this act shall be adjudged by any court of competent jurisdiction to be invalid, including any judgment made pursuant to R.S.1:1-10 that the part is unconstitutional, invalid, or inoperative, the judgment shall not affect, impair or invalidate the remainder of this act, but shall be confined in its operation to the clause, sentence, paragraph, section or other part directly involved in the controversy in which the judgment shall have been rendered.

3. This act shall take effect immediately.

STATEMENT

This bill, for any contract for the erection, construction, reconstruction, alteration, maintenance or repair of any building in the State, including any such contract under which workers are required to be paid prevailing wage rates set pursuant to the “New Jersey Prevailing Wage Act,” requires the owner to be responsible for debt owed to a wage claimant that is incurred by any subcontractor acting under, by, or for the owner for the wage claimant’s performance of labor under the contract.

The bill authorizes the Commissioner of Labor and Workforce Development to bring an action under specified statutes or in a civil action to enforce this responsibility. It also authorizes a joint labor-management cooperation committee to bring a civil action to enforce the responsibility against an owner under the bill.

The bill requires a subcontractor, upon request from the owner, to provide specified information regarding the subcontractor’s and third party’s work on the project and provides that the owner may withhold disputed sums upon the subcontractor’s failure to provide the requested information.

The bill does not apply to any work being done by an employee of the State or any political subdivision of the State, and provides that its obligations and remedies are in addition to any other remedy provided by law.

The purpose of this bill is to advance the well-established State concern of ensuring the full payment of employees as required by law by enhancing available remedies in certain cases of illegal failure to provide compensation to employees, without reducing any existing remedies.