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What does ‘prevailing wage rate’ mean?

August 30, 2015

New Jersey public works projects are subject to a law called the New Jersey Prevailing Wage Act. This law provides what’s called a “prevailing wage” level for craftsmen, laborers and apprentices who work on projects that are completely or partially funded by public entities.

The law is designed to prevent unfair competition among those bidding for these projects. This helps protect both workers and their employers. The rates vary by type of job and in some cases by county. Some jobs types, including general laborers, are paid in accordance with prevailing statewide rates.

The Prevailing Wage Rate Determinations are made based on collective bargaining agreements for people in specific trades or crafts in a particular area of the state. Both contractors and subcontractors are required to abide the rates.

The Public Contracts Section of New Jersey’s Division of Wage and Hour Compliance works to ensure that at least minimum prevailing wage rates and fringe benefits are being paid to those working on public works projects in part through site inspections.

If a contractor isn’t in compliance, the business can be subject to penalties and fines. If the non-compliance is serious enough, it can potentially be subject to a three-year prohibition from working or even bidding on public works projects in the state.

Public works projects can involve construction, demolition, reconstruction, repair, alteration or maintenance. This can include things like painting and decorating.

The New Jersey Department of Labor & Workforce Development’s Division of Wage & Hour Compliance has information on its website with prevailing wage rates for counties throughout the state. However, employers should make that information accessible to workers. The site also offers a form that people can use to report that an employer has not paid the prevailing wage rate.

If you believe that you have not been paid fairly according to the prevailing wage rate and you have not been able to resolve the issue, you may want to consider seeking legal guidance from an experienced New Jersey employment attorney. He or she can help you determine what your options are to get the wages and benefits to which you’re entitled.

Source: New Jersey Department of Labor and Workforce Development, “Prevailing Wage Rates on Construction-Related Public Works Projects – General Information,” accessed Aug. 30, 2015

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