New Enforcement Powers Given To New Jersey DOL Exercised In Broad Fashion For First Time: The Coming Of The Storm?

Fox Rothschild LLP

Fox Rothschild LLP

In July 2019, the New Jersey Legislature amended and expanded the State’s wage-hour laws to give the enforcing agency the power to stop an errant contractor, especially those doing prevailing wage work, from actually doing any more work until the violations are remedied. In its first exercise of this awesome authority, the agency has directed Cunha Construction to stop doing work, across the State, based on its record of persistent and continuing wage-hour transgressions.

The DOL stated that this is the first time such a broad stop-work order has been issued; previously, such orders were issued on a project-by-project basis. The Order stays effective until the employer has evidenced compliance and paid all back-due wages to employees as well as paying the penalties assessed.

The Legislature gave the agency the power to order any employer to stop doing work when the DOL discovers major wage violations, including a failure to pay benefits or other violations. As this contractor was not a registered public works employer, the NJDOL did not possess the “tools” to bring the employer into compliance and, so this weapon was a valuable one for the agency to use. As Governor Murphy stated, “this stop-work order from the Department of Labor & Workforce Development is the first of its kind under a law signed by Gov. (Phil) Murphy to strengthen our ability to enforce the state’s labor laws. The message to employers should be clear: We are committed to using all of the tools at our disposal to protect New Jersey’s workers.”

The agency conducted field visits at two project and interviewed workers. The investigation revealed that the employer was paying off the books and by cash and also, most significantly, did not have workers’ compensation insurance. The employer was found also not to have paid overtime, did not keep proper records, paid late, and sought to impede the investigation.

The Takeaway

This is a powerful tool for the Department of Labor. In theory, the purpose is to ensure that workers are better protected from employers to seek to take advantage of them and gyp them from their hard-earned wages, especially in the construction industry where I see this power will be exercised more frequently.

Time will tell…

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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