Sponsored by:
Assemblywoman DAWN FANTASIA
District 24 (Morris, Sussex and Warren)
SYNOPSIS
Establishes “Subcontractor Licensing Enforcement Act.”
CURRENT VERSION OF TEXT
As introduced.
An Act concerning contractor and subcontractor licensing and supplementing Title 45 of the Revised Statutes and amending P.L.1999, c.238.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) P.L. , c. (C. ) (pending before the Legislature as this bill) shall be known and may be cited as the “Subcontractor Licensing Enforcement Act.”
2. (New section) The Legislature finds and declares that:
a. The State of New Jersey requires licenses for various regulated construction-related trades, including HVACR contracting, electrical contracting, plumbing, fire and burglar alarm installation, and other specialties.
b. The use of unlicensed subcontractors on construction projects poses risks to public safety, worker safety, building and home integrity, and consumer protection.
c. Current law does not clearly prohibit subcontractors from performing regulated work under the license of a prime contractor, allowing unlicensed entities to evade State oversight.
d. It is in the public interest to ensure that all entities performing regulated trade work hold valid licenses for the specific trade performed, regardless of whether they operate as contractors or subcontractors.
e. Strengthening licensing compliance will improve safety, increase accountability, prevent fraud, and promote lawful business operations in New Jersey’s construction industry.
3. (New section) As used in P.L. , c. (C. ) (pending before the Legislature as this bill):
“Contractor” means any person or business entity engaged in or offering to engage in regulated trade work for compensation.
“License” means a current and valid professional or occupational license issued by the State of New Jersey permitting the performance of a regulated trade.
“Regulated trade work” means work provided in the following trades: HVACR contracting; electrical contracting; plumbing; fire and burglar alarm installation; sheet metal work; or any activity requiring licensure or certification under Title 45 of the Revised Statutes or rules of the requisite boards for these trades.
“Subcontractor” means any person or business entity performing work under a contract with a contractor or another subcontractor on a construction project.
b. A contractor’s license shall not, under any circumstance, authorize a subcontractor to perform regulated trade work under the contractor’s license.
c. A contractor shall not hire, permit, direct, or contract with a subcontractor to perform specific regulated trade work unless the subcontractor is independently licensed for that trade.
d. Each subcontractor performing regulated trade work shall provide proof of licensing to:
(1) the contractor prior to commencement of work;
(2) the permitting authority when permits are filed; and
(3) any State or local enforcement agency upon request.
5. (New section) a. All permit applications for regulated trade work shall contain:
(1) the name and license number of the subcontractor performing the regulated work; and
(2) proof of the subcontractor’s physical license.
b. A permit shall not be issued unless the named subcontractor holds the required license.
c. It shall be a violation of P.L. , c. (C. ) (pending before the Legislature as this bill) for any contractor to submit a permit application using the contractor’s own license for work that will be performed by an unlicensed subcontractor.
6. (New section) a. A violation of P.L. , c. (C. ) (pending before the Legislature as this bill) shall constitute:
(1) an act of professional misconduct; and
(2) grounds for disciplinary action by the applicable licensing board.
b. Penalties for a violation of P.L. , c. (C. ) (pending before the Legislature as this bill) shall include:
(1) fines of up to $5,000 for the first offense, up to $10,000 for the second offense, and up to $25,000 for each subsequent offense;
(2) suspension or revocation of the contractor’s or subcontractor’s license or registration; and
(3) stop-work orders issued by a State or local enforcing agency.
c. Each day of continued violation shall constitute a separate offense.
7. (New section) Contractors shall maintain records of each subcontractor hired for regulated work, including copies of licenses, contracts, and permit documentation for a period of three years. A contractor who knowingly hires or retains an unlicensed subcontractor to perform regulated trade work shall be jointly and severally liable for any violation committed by that subcontractor.
8. Section 8 of P.L.1999, c.238 (C.34:11-56.55) is amended to read as follows:
8. a. Each contractor shall, after the bid is made and prior to the awarding of the contract, submit to the public entity, including, but not limited to, any authority, board, or commission, the certificates of registration for all subcontractors listed in the bid proposal. Applications for registration shall not be accepted as a substitute for a certificate of registration for the purposes of this section.
b. No subcontractor may perform regulated trade work in the performance of any public work unless licensed for that trade and listed on all required documentation for the bidding and application to perform public work.
c. A public body and any construction manager subject to a contract for public work shall verify subcontractor licensing prior to awarding or approving a subcontract.
d. As used in this section, “regulated trade work” means work provided in the following trades: HVACR contracting; electrical contracting; plumbing; fire and burglar alarm installation; sheet metal work; or any activity requiring licensure or certification under Title 45 of the Revised Statutes or rules of the requisite boards for these trades.
(cf: P.L.2019, c.376, s.3)
9. The Director of the Division of Consumer Affairs, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), shall adopt rules and regulations to effectuate the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill).
10. This act shall take effect on the 90th day next following the date of enactment, except that the Director of the Division of Consumer Affairs may take any anticipatory administrative action in advance as may be necessary for the implementation of this act. This act shall apply to contracts or agreements between contractors and subcontractors initiated or renewed on or after the date of enactment.
STATEMENT
This bill regulates the licensing and work of subcontractors for HVACR contracting, electrical contracting, plumbing, fire and burglar alarm installation, sheet metal work, or any activity requiring licensure or certification under State law or the rules of the requisite boards for these trades. Specifically, the bill provides that no subcontractor is permitted to perform, offer to perform, advertise, or engage in any regulated trade work unless the subcontractor holds the appropriate New Jersey license required for that trade.
Further, the bill provides that a contractor’s license does not, under any circumstance, authorize a subcontractor to perform regulated trade work under the contractor’s license, and that a contractor may not hire, permit, direct, or contract with a subcontractor to perform specific regulated trade work unless the subcontractor is independently licensed for that trade.
The bill provides penalties for enforcement of violations of its provisions, as well as recordkeeping requirements for contractors.
Finally, the bill amends the “Public Works Contractor Registration Act” to prohibit a subcontractor from performing specific regulated trade work in the performance of any public work unless licensed for that trade and listed on all required documentation for the bidding and application to perform public work, and a public body and any construction manager subject to a contract for public work is required to verify subcontractor licensing prior to awarding or approving a subcontract.