New Jersey Authorities Uncover Over $1.3 Million in Back Wages and Penalties in Construction Site Sweep

The New Jersey Departments of Labor and Workforce Development (NJDOL), Treasury, Banking and Insurance, and the Office of the Attorney General (OAG) have assessed over $1.3 million in back wages and penalties to 20 contractors who performed construction work at 88 Regent Street in Jersey City. The assessment was made after a multi-agency team of over 60 investigators conducted an unannounced sweep at the construction site in response to allegations of workers being misclassified.

The investigation, which is the first of its kind among cooperating state agencies, started shortly after Governor Murphy signed a second package of misclassification bills into law in July 2021. The joint investigation found that 14 out of the 21 subcontractors had pending tax issues, and one out-of-state contractor was served a jeopardy assessment warrant for non-compliance. The 14 non-compliant businesses were assessed a total of $104,092 in back taxes, and $46,597 has been collected to date.

Grand Street Construction, LLC, the owner and general contractor of the project, can be held responsible for the unlawful actions and back wages of its subcontractors as per N.J.S.A. 34:11-67.1. Subcontractor P & B Partitions of West Berlin, which hired several of the other subcontractors, was cited for records violations, misclassifying employees, and unpaid and late wages, and assessed more than $324,000 in penalties and fees, in addition to a $8,692 misclassification penalty to be paid to 22 workers. P & B Partitions is contesting that assessment, but the liability also lies with both P & B Partitions and Grand Street Construction since they failed to challenge the alleged violations against them.

Another subcontractor, BWK Construction, LLC, was found to have failed to pay employees overtime, failed to provide them with Earned Sick Leave, and to have misclassified employees by paying them in cash off the books. Grand Street Construction was notified of these alleged violations, but they failed to respond, which resulted in total back wages, fees, and penalties of $350,171.49.

The Department was represented by the Office of the Attorney General's Affirmative Civil Rights and Labor Section within the Division of Law's Affirmative Civil Enforcement Practice Group, and the NJDOL will continue to pursue the collection of the assessed back wages and penalties as cases settle. Each contractor has the right to appeal the allegations.

For more information on New Jersey's wage and hour laws, visit myworkrights.nj.gov.