A5583

An Act concerning prevailing wage requirements for certain fabrication and amending P.L.1963, c.150.

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

1. Section 2 of P.L.1963, c.150 (C.34:11-56.26) is amended to read as follows:

2. As used in this act:

(1) "Department" means the Department of Labor and Workforce Development of the State of New Jersey.

(2) "Locality" means any political subdivision of the State, combination of the same or parts thereof, or any geographical area or areas classified, designated and fixed by the commissioner from time to time, provided that in determining the "locality," the commissioner shall be guided by the boundary lines of political subdivisions or parts thereof, or by a consideration of the areas with respect to which it has been the practice of employers of particular crafts or trades to engage in collective bargaining with the representatives of workers in such craft or trade.

(3) "Maintenance work" means the repair of existing facilities when the size, type or extent of such facilities is not thereby changed or increased. "Maintenance work" also means any work on a maintenance-related project that exceeds the scope of work and capabilities of in-house maintenance personnel, requires the solicitation of bids, and has an aggregate value exceeding $50,000.

(4) "Public body" means 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.

(5) "Public work" means construction, reconstruction, demolition, alteration, custom fabrication, duct cleaning, 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 a rehabilitation program. "Public work" shall also mean construction, reconstruction, demolition, alteration, custom fabrication, duct cleaning, 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 the property or premises is owned by the public body or

(a) Not less than 55% 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

(b) 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.

(6) "Commissioner" means the Commissioner of Labor and Workforce Development or his duly authorized representatives.

(7) "Workman" or "worker" includes laborer, mechanic, skilled or semi-skilled, laborer and apprentices or helpers employed by any contractor or subcontractor and engaged in the performance of services directly upon a public work, regardless of whether their work becomes a component part thereof, but does not include material suppliers or their employees who do not perform services at the job site. For the purpose of P.L.1963, c.150 (C.34:11-56.25 et seq.), contractors or subcontractors engaged in custom fabrication shall not be regarded as material suppliers.

(8) "Work performed under a rehabilitation program" means work arranged by and at a State institution primarily for teaching and upgrading the skills and employment opportunities of the inmates of such institutions.

(9) "Prevailing wage" means the wage rate paid by virtue of collective bargaining agreements by employers employing a majority of workers of that craft or trade subject to said collective bargaining agreements, in the locality in which the public work is done.

(10) "Act" means the provisions of P.L.1963, c.150

(C.34:11-56.25 et seq.) and the rules and regulations issued hereunder.

(11) "Prevailing wage contract threshold amount" means:

(a) In the case of any public work paid for in whole or in part out of the funds of a municipality in the State of New Jersey or done on property or premises owned by a public body or leased or to be leased by the municipality, the dollar amount established for the then current calendar year by the commissioner through rules and regulations promulgated pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), which amount shall be equal to $9,850 on July 1, 1994 and which amount shall be adjusted on July 1 every five calendar years thereafter in direct proportion to the rise or fall in the average of the Consumer Price Indices for Urban Wage Earners and Clerical Workers for the New York metropolitan and the Philadelphia metropolitan regions as reported by the United States Department of Labor during the last full calendar year preceding the date upon which the adjustment is made; and

(b) In the case of any public work other than a public work described in paragraph (a) of this subsection, an amount equal to $2,000.

(12) "Custom fabrication" means:

(a) the fabrication of any of the following: plumbing, heating, cooling, ventilation or exhaust duct systems, mechanical insulation, or one or more signs in a project which cost a total of more than $30,000 and are part of a project upon completion; or

(b) any other fabrication which is [either of components] one or more entire modules or structures pre-fabricated to specifications for a particular project of public work [or of other materials finished into components without further modification] with minimal construction work remaining other than installation for use in a project of public work or for use in a type or classification of a project of public work. It shall not include components or materials that cannot be fabricated on the public work site, such as structural steel members or precast concrete, or smaller prefabricated components.

(cf: P.L.2022, c.113, s.1)

2. This act shall take effect immediately and shall apply retroactively to the effective date of P.L.2019, c.44.

STATEMENT

This bill amends the “New Jersey Prevailing Wage Act” to clarify that certain offsite fabrication that historically had not been subject to prevailing wage requirements was not intended to be covered. In 2019, the “New Jersey Prevailing Wage Act” was amended to provide coverage under the law for custom fabrication which is either of components or structures pre-fabricated to specifications for a particular project or other materials finished into components without further modification for use in a project or type of classification of a project. This bill amends that language to clarify that the “New Jersey Prevailing Wage Act” applies only to fabrication which is one or more entire structures or modules of the building or work, as opposed to smaller pre-fabricated components, with minimal construction work remaining other than the installation or assembly of the structure or modules.

It is the sponsor’s intent to clarify that the purpose of the 2019 amendment was to ensure that companies were not able to avoid the “New Jersey Prevailing Wage Act” by constructing entire portions of public buildings or works off-site that previously had been performed on-site and subject to the law. The amendment was not intended to expand the coverage of prevailing wage requirements to activities that have long been understood to be outside the scope of the “New Jersey Prevailing Wage Act.” This bill provides that clarification. The bill applies retroactively to the effective date of P.L.2019, c.44.