In a significant update for municipalities across New Jersey, the Department of Labor and Workforce Development (NJDOL) has announced that the municipal prevailing wage threshold will rise to $19,375 effective July 1, 2024. This increase, up from the current threshold of $16,263, means that any contracts awarded directly by municipal governing bodies must meet or exceed this new value to fall under the coverage of the New Jersey Prevailing Wage Act. Contracts below this threshold will not be subject to the Act’s stipulations.
Why the Change?
The adjustment of the municipal prevailing wage threshold happens every five years and is based on the Consumer Price Index (CPI). This ensures that the wage threshold keeps pace with inflation and the changing economic environment. It’s important to note that this adjustment only affects municipal governing bodies; other public agencies such as county-level authorities, municipal boards of education, and utility authorities continue to operate under a static threshold of $2,000, which does not adjust with CPI.
Impact on Workers and Employers
Robert Asaro-Angelo, Commissioner of the NJDOL, emphasized the importance of this adjustment, stating, “The established wages under the Prevailing Wage Act ensure equitable compensation for workers, while leveling the playing field among employers. It is important that our municipalities uphold their obligations under the law, which aligns these wages with industry standards to prevent the erosion of skilled labor while promoting economic fairness.”
The prevailing wage rates are grounded in collective bargaining agreements specific to the craft or trade involved in public work. These rates are not uniform across the state; they vary by county and type of work. The NJDOL website provides access to both current and archived wage rates for reference.
Key Details for Contractors
For contractors, it’s crucial to understand that the applicable wage rates and fringe benefits are those in effect on the date the contract is awarded to a general contractor. All predetermined rate increases must be implemented from the specified dates. These rates are valid for two years, after which a new rate determination is required.
Contractors aiming to bid on or engage in public work under the Prevailing Wage Act must ensure they are registered with the NJDOL’s Division of Wage and Hour Compliance, as mandated by the Public Works Contractor Registration Act.
For further details please contact the lawyers at Tobia & Lovelace Esq., LLC at 973-389-6940.