Going Public With It – OFCCP Publishes Notice Regarding FOIA Request for All Type 2 Consolidated EEO-1 Reports – and Sets September 19 Deadline to Object

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The National Law Review
Monday, August 29, 2022

On August 19, 2022, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) published a Notice in the Federal Register regarding a Freedom of Information Act (“FOIA”) request from Will Evans, a Senior Reporter and Producer with the Center for Investigative Reporting (“CIR”). The FOIA request seeks the disclosure of certain government contractor compliance reports submitted to the Equal Employment Opportunity Commission. The OFCCP is allowing affected contractors to submit objections to the FOIA request if they fear confidential commercial information may be disclosed and ultimately published.

The Scope of the Request
The FOIA request was initially made in January 2019 but has been amended multiple times and now seeks all Type 2 Consolidated EEO-1 Report demographic data submitted by federal contractors and first-tier subcontractors from 2016-2020. The request does not include EEO-1 requests from single-establishment (Type 1) contractors, other EEO-1 reports filed by Type 2 (multi-establishment) contractors or Component 2 reports with compensation data. Type 2 Consolidated EEO-1 Reports are consolidated reports of demographic data for all employees at headquarters as well as all establishments, categorized by race/ethnicity, sex, and job category. OFCCP estimates that nearly 15,000 companies filed reports subject to the FOIA request. A company can use the EEO-1 Online Filing System’s historic data to determine if they filed EEO-1 Reports between 2016 and 2020.

What If I Don’t Want My EEO-1 Reports Made Public?
FOIA grants the public the right to request access to records from any federal agency. However, there are certain exemptions that allow agencies to redact – or entirely withhold – certain requested information. In its Notice, the OFCCP states it believes that the information requested may be protected from disclosure under FOIA Exemption 4 – which protects disclosure of confidential commercial information.

Accordingly, OFCCP is now requesting that any federal contractor who filed a Type 2 Consolidated EEO-1 Report as a federal contractor between 2016 and 2020 and who wishes to object to the disclosure of the information submit an objection to the OFCCP by September 19, 2022.

How Do I Submit an Objection?
Because of the large number of affected companies, OFCCP has established a portal for contractors to submit written objections. While the OFCCP encourages the use of the portal, objections may also be submitted via email to OFCCPSubmitterResponses@dol.gov, or by mailing to “ATTN: FOIA Officer (FRN), Office of Federal Contract Compliance Programs, Division of Management and Administrative Programs, 200 Constitution Avenue NW, Room C3325, Washington, DC 20210. All objections, however submitted, must be received by OFCCP by September 19, 2022.

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New Regulation Proposal Would Require Project Labor Agreements for Federal Construction ‎Projects

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JD Supra | Aug. 25, 2022

On Thursday, August 19, 2022, as mandated by Executive Order 14063, issued by President Biden February 4, the Federal Acquisition Regulatory Council proposed a rule to amend the Federal Acquisition Regulations (FARs) to require that federal contractors and their subcontractors enter into project labor agreements (PLAs) with unions as a condition to receiving federal construction contracts worth $35 million or more. The new regulations, if adopted, would apply to solicitations issued after the effective date of the final regulations issued by the FAR Council. Comments on the proposed regulations are due October 18, 2022, such that, if the proposed regulations are enacted as drafted, federal contractors may begin to see the PLA requirement in new solicitation issued at the end of 2022 or the first quarter of 2023.

As discussed in our prior update on Executive Order 14063, a PLA is a pre-hire collective bargaining agreement between an employer and one or more trade unions that establishes terms and conditions of employment for a specific construction project. Under the current version of FAR 22.505, federal agencies have the discretion to require PLAs on construction contracts by including FAR 52.222-33 in the solicitation. That clause currently states:

Notice of Requirement for Project Labor Agreement (May 2010)

(a) Definitions. “Labor organization” and “project labor agreement,” as used in this provision, are defined in the clause of this solicitation entitled Project Labor Agreement.

(b) Consistent with applicable law, the offeror shall negotiate a project labor agreement with one or more labor organizations for the term of the resulting construction contract.

(c) Consistent with applicable law, the project labor agreement reached pursuant to this provision shall-

(1) Bind the offeror and all subcontractors engaged in construction on the construction project to comply with the project labor agreement;

(2) Allow the offeror and all subcontractors to compete for contracts and subcontracts without regard to whether they are otherwise parties to collective bargaining agreements;

(3) Contain guarantees against strikes, lockouts, and similar job disruptions;

(4) Set forth effective, prompt, and mutually binding procedures for resolving labor disputes arising during the term of the project labor agreement;

(5) Provide other mechanisms for labor-management cooperation on matters of mutual interest and concern, including productivity, quality of work, safety, and health; and

(6) Fully conform to all statutes, regulations, Executive orders, and agency requirements.

(d) Any project labor agreement reached pursuant to this provision does not change the terms of this contract or provide for any price adjustment by the Government.

(e) The offeror shall submit to the Contracting Officer a copy of the project labor agreement with its offer.

Under the proposed rule, federal agencies would be required to include revised 52.222-33 and 52.222-34 FARs in solicitations for construction projects estimated to cost the government $35 million or more. This means that federal contractors working on construction projects costing $35 million or more, would need to enter into PLAs for those projects. Federal agencies will retain their discretion under FAR 22.505 to require PLAs (by including FAR 52.222-33 in the solicitation) for projects below the $35 million mark. For IDIQ (indefinite delivery, indefinite quantity) contracts, only individual task orders will be considered when calculating the size of the contract for purposes of applying the proposed revised 52.222-33 and 52.222-34 FARs. There is no exception for small businesses, such that if a small business receives a construction contract award of $35 million or greater, or is a subcontractor on such an award, the small business may be required to enter into PLAs if the contract award includes the proposed revised 52.222-33 and 52.222-34.

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Inflation Reduction Act Brings Big Changes to Clean Energy Tax Incentives

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JD Supra
August 22, 2022

Over the next decade, the United States, through enactment of the Inflation Reduction Act of 2022 (IRA), is primed to make a $369 billion investment in clean energy and climate change programs. The lion’s share of this investment comes in the form of tax credits (extending or expanding existing tax credits, reinstating expired tax credits, and establishing new tax credits) to incentivize behavior that makes significant progress in reducing greenhouse gas (GHG) emissions (with projections showing a nearly 40% decrease in GHG emissions compared to a 2005 baseline) while at the same time encouraging domestic manufacture of key climate change technologies.

Companies looking to execute projects to take advantage of these tax credits should note two significant differences from how these types of tax credits have been provided in the past.

First, with limited exceptions, most credits are set up with a low “base” credit that can be increased by satisfying certain requirements. For example, the investment tax credit has a “base” credit amount of 6%, which can be increased to 30% if the project meets both a prevailing wages requirement for its laborers, mechanics, contractors, and subcontractors and an apprenticeship labor requirement that a certain percentage of the total labor hours for construction, alteration, or repair work on a project are performed by qualified apprentices. The credit can be increased even further by satisfying a domestic content requirement, locating the facility in an “energy community” (which includes brownfields, areas with a history of significant fossil fuel employment, and properties on which a coal mine or coal-fired electricity generation has been recently located), or locating smaller scale projects in low-income communities or on Indian land. Similarly, some credits contain an enhanced credit for using certain technologies in project execution (e.g., the carbon oxide sequestration tax credit is enhanced for projects using direct air capture).

Second, and a change that is poised to shake up how certain projects are financed and developed, new methods of monetizing tax credits have been added. For developers, the ability to transfer all or a portion of eligible credits to an unrelated third party provided in exchange for cash consideration (which consideration is not included in the transferee’s gross income nor deductible by the transferor) will be fairly significant in how a project is structured (even if projects may still need a tax equity component to monetize accelerated depreciation). The IRA will also help incentivize certain tax-exempt and government entities to execute projects by offering direct payment in lieu of certain tax credits. For-profit entities pursuing clean hydrogen production, carbon capture and sequestration, and domestic advanced manufacturing projects can also elect direct pay in lieu of tax credits for those types of projects. We expect direct payment to drive significant activity towards those types of projects. Ultimately, new ways of monetizing credits will give rise to several new transaction structures.

This update is intended to provide a high level overview of some of the IRA’s tax credit incentives targeting clean energy and climate change. We have also published separate updates regarding the Act’s energy storage incentives and a general overview of IRA incentives.

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FAR Council Proposes New Rule on Project Labor Agreements for Major Construction Projects

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By Alexandra Barbee-Garrett, Peter J. Eyre & Thomas P. Gies on August 23, 2022

On August 18, 2022, the FAR Council issued a proposed amendment to the FAR implementing Executive Order 14063, Use of Project Labor Agreements for Federal Construction Projects, which requires the use of project labor agreements (PLAs) on any large-scale federal construction projects valued at or above $35 million unless an exception applies. The Order, and the proposed rule, also give agencies discretion to use PLAs on projects under that $35 million threshold.

In addition to expanding definitions of “construction,” “labor organization,” and “large-scale construction project” to align with E.O. 14063, the proposed rule would revise FAR 22.503 to reflect the change in policy that mandates agencies to require the use of PLAs when awarding large-scale federal construction contracts—including individual orders under Indefinite Delivery, Indefinite Quantity contracts—unless an exception applies. The proposed rule would make the PLA requirement a mandatory flow-down. The proposed rule would also allow agencies to include any additional agency-specific requirements in a PLA through FAR 22.504(b)(6), and would strike the current FAR 22.504(c), which grants agencies discretion to specify PLA terms and conditions.

Both the E.O. and the proposed rule implementing it provide an exception from the PLA requirements. The proposed rule would allow the senior procurement executive of an agency to grant a written exception to the PLA requirement in each of the following circumstances, as provided in the E.O.:

1. Requiring a PLA would not achieve economy and efficiency in Federal procurement, as described in 22.504(d);

2. Requiring a PLA would substantially reduce the number of potential bidders so as to frustrate full and open competition, i.e., where adequate competition at a fair and reasonable price could not be achieved; or

3. Requiring a PLA would be inconsistent with statutes, regulations, other E.O.s., or Presidential Memoranda.

This change in policy will become effective with the publication of the Final Rule, following a 60-day public comment period.

We will continue to monitor developments concerning this initiative.

(See Article)

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US Department of Labor Obtains Court Order Preventing Federal Contractor from Retaliating Against, Intimidating Workers on Maryland Projects

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Agency: Wage and Hour Division
Date: August 23, 2022
Release Number: 22-1722-PHI

JAG Contractors Inc. attempted to obstruct federal wage investigation

ALEXANDRIA, VA – The U.S. Department of Labor obtained a temporary restraining order and preliminary injunction to prohibit a federal contractor and its owners from retaliating against former and current employees who cooperate with an investigation by the department’s Wage and Hour Division.

The division’s probe of the pay practices of JAG Contractors Inc. in Alexandria, and owner Jose Guzman began in February 2022. The company was contracted to build two federally funded projects in Maryland: the Frederick National Laboratory for Cancer Research at Fort Detrick in Frederick, and the Centers for Medicare and Medicaid Services site in Windsor Mill.

Investigators determined the company and its owners failed to pay workers on the projects all wages as required for all hours worked in violation of the Davis-Bacon Act and the Fair Labor Standards Act. They also learned that JAG either terminated or reassigned employees who complained to the employer’s management about their illegal pay practices or who cooperated with the investigation, from working on the company’s federal projects.

In addition, investigators discovered JAG attempted to obstruct the investigation by falsifying documents, making intimidating statements about workers’ immigration status, and directing employees not to report to work on the day investigators interviewed employees.

Filed in the U.S. District Court for the Eastern District of Virginia, the department’s suit against JAG Contractors Inc. and its owner seeks an order that permanently prevents them from violating the FLSA’s anti-retaliation provisions or engaging in other activity protected by the Fair Labor Standards Act.

“Workers have the legal right to question their employer’s pay practices, submit a complaint and to take part in a federal investigation without fear of reprisal,” explained Wage and Hour Division District Director Alfonso J. Gristina in Wilkes-Barre, Pennsylvania. “When there are doubts about an employer’s compliance with federal wage and hour laws, we will intervene to ensure that employers respect their workers and their rights.”

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AG Healey Secures Nearly $3 Million in Penalties and Back Wages Within the Construction Industry in Fiscal Year 2022

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FOR IMMEDIATE RELEASE: 8/22/2022
Office of Attorney General Maura Healey
The Attorney General’s Fair Labor Division

AG’s Fair Labor Division Cited 100 Construction Companies for Violating State Labor Laws, Securing Restitution for More Than 850 Workers

BOSTON — As part of an ongoing initiative to combat wage theft in the construction industry, Attorney General Maura Healey announced today that her office issued 216 citations against 100 construction companies for violating the state’s wage and hour and prevailing wage laws over fiscal year 2022. As a result of these enforcement actions, more than 853 workers will receive more than $1.7 million in back pay and the companies will pay over $1.1 million in fines.

“Our Fair Labor Division works hard to advocate for construction workers across Massachusetts who are often vulnerable to wage theft and other forms of exploitation on the job,” said AG Healey. “Through continued enforcement, outreach, and education, we are committed to ensuring a fair working environment in the construction industry and a level playing field for responsible employers.”

The violations in these cases, handled by the AG’s Fair Labor Division, include the failure to pay wages in a timely manner, to pay overtime, and to furnish records for inspection, as well as retaliation. For work performed on public construction projects, violations include failure to pay the prevailing wage, to submit true and accurate certified payroll records, and to register and pay apprentices appropriately.

Some of the 2022 enforcement actions include citations against the following construction companies:

  • Rochester Bituminous Products, Inc., and its owners, President, Thomas Russo, Manager, Albert Todesca, and Treasurer, Michael P. Todesca, were issued 25 citations totaling more than $1.2 million in restitution and penalties for prevailing wage violations and failing to submit certified payroll records. The violations occurred on various public projects, including projects for the City of Boston, Town of Mattapoisett, Boston Water & Sewer Commission, as well as Abington, Bridgewater, Canton, Plymouth, Sharon, and Weymouth.
  • Superior Carpentry, Inc., and its President, Fernando Barroso, and Vice President, Felipe Drumond, were issued five citations for over $540,000 in restitution and penalties for failure to pay prevailing wages and for submittal of false payroll records to awarding authorities on public projects at the Middleborough and Westport police stations.
  • Railworks Track Systems, Inc., will pay more than $220,000 in restitution and penalties for failing to pay the proper overtime rate to workers, failing to properly account for different hourly rates of pay earned by employees during the same work week, and failing to submit true and accurate payroll records for work performed on public works projects in Hyannis, Falmouth. Framingham, Great Barrington, Lee, Lenox, Pittsfield, Sheffield, and Stockbridge.
  • Gonza Construction Inc. was issued five citations totaling $143,000 in restitution and penalties for prevailing wage, record-keeping, earned sick time, and paystub violations on a public project in Stoughton.

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Offshore Wind and the US Inflation Reduction Act

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Mayer Brown | 8/19/22
Authors – Amanda L. Rosenberg, Lauren A. Bachtel and Daniel T. Kiely

The Inflation Reduction Act of 2022 (IRA), which was signed into law by President Joe Biden on August 16, 2022, has the potential to shape offshore wind development for the foreseeable future. Among other things, the IRA modifies the investment tax credit requirements for offshore wind projects, ties offshore wind leasing to offshore oil and gas leasing while also opening new areas for potential offshore wind development, and appropriates additional funds for the planning and development of interregional electricity transmission and transmission of electricity generated by offshore wind.

Tax Credits

There are now more onerous requirements for offshore wind projects to qualify for investment tax credits (ITCs) at the full rate but a renewed opportunity to claim production tax credits (PTCs).

Previously, offshore wind projects under construction by the end of 2025 qualified for a 30% ITC but were ineligible for PTCs at the full rate unless they were under construction by the end of 2016. Wind projects under construction between 2017 and 2021 qualified for PTCs at a reduced rate. Most offshore wind projects are expected to claim the ITC given the high capital costs of constructing such projects.

Now, offshore wind projects under construction by the end of 2024 are eligible for a reduced base credit (6% ITC or 0.3 cent PTCs, adjusted for inflation) that is subject to increase if certain criteria are met. In order to be eligible for the full ITC or PTCs, offshore wind projects must meet certain prevailing wage and apprenticeship requirements or else be under construction no later than 60 days after the Treasury secretary issues guidance on the prevailing wage and apprenticeship requirements.

Prevailing wage requirement: A taxpayer, as well as its contractors and subcontractors, must pay prevailing wages to laborers and mechanics in the construction of the facility and, during the first five (in the case of ITC projects) or 10 (in the case of PTC projects) years of operation after the facility is placed in service, the alteration and repair of the facility. Prevailing wages are determined by the secretary of Labor. Taxpayers have the ability to correct a shortfall in wages by paying to the laborer or mechanic the difference between the prevailing wage amount and what the laborer or mechanic was actually paid plus interest and a penalty to Treasury. The amount owed to the laborer or mechanic for a shortfall is multiplied by three and the penalty is higher, if there was “intentional disregard” of the prevailing wage requirement.

Apprenticeship requirement: A certain percentage of the total labor hours for the construction, alteration or repair work with respect to the facility (including work by contractors or subcontractors) must be performed by qualified apprentices. The percentage is 10% for projects under construction before 2023, 12.5% for projects under construction in 2023, and 15% for projects under construction after 2023. A “qualified apprentice” is an apprentice employed by the taxpayer or its contractors or subcontractors and who participates in certain registered apprenticeship programs. Additionally, any taxpayer, contractor or subcontractor who employs four or more individuals to perform construction, alteration or repair work with respect to the facility must employ at least one qualified apprentice. There is an exception to the apprenticeship requirement if (i) the taxpayer requested qualified apprentices from a program and either the request was denied or there was no response from the apprenticeship program within five days or (ii) the taxpayer otherwise pays a penalty to Treasury for failing to meet the labor hours and minimum participation requirements. The penalty is multiplied by 10 if the taxpayer intentionally disregarded the apprenticeship requirement.

Practical considerations: For wind projects, the determination of whether the prevailing wage requirement and apprenticeship requirements are satisfied is made on a “qualified facility” basis. The IRS generally considers each turbine, pad and tower a separate facility. It is unclear how the requirements will apply to the balance of the wind project. Another consideration is whether the start of construction rules that have been used for qualification purposes over the last nine years, including the “single project” rule, will apply for purposes of determining whether a project was under construction in time to avoid having to meet the prevailing wage and apprenticeship requirements. Recordkeeping will be critical in deals claiming the full tax credit rates. Investors are likely to ask sponsors to make representations that the prevailing wage and apprenticeship requirements are met, if applicable. Beginning of construction analysis will be important for projects looking to avoid having to meet the requirements. Sponsors will need to coordinate with contractors to ensure the requirements are met and may attempt to push these risks on to contractors. It is worth noting that the start of construction deadline for claiming an ITC for an offshore wind project was pulled forward by one year, but projects under construction in 2025 or later may be eligible for a technology-neutral ITC or PTCs as discussed below.

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FACT SHEET: The Inflation Reduction Act Supports Workers and Families

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The White House Briefing Room
8-19-22

By signing the Inflation Reduction Act, President Biden is delivering on his promise to build an economy that works for working families. President Biden is the most pro-worker, pro-union President in history, and the Inflation Reduction Act builds on that legacy. President Biden and Congressional Democrats beat back special interests to pass this historic law that lowers costs for families, creates good-paying jobs for workers, and grows the economy from the bottom up and the middle out.

The Inflation Reduction Act lowers prescription drug costs, health care costs, and energy costs. It’s the most aggressive action on tackling the climate crisis in American history, which will lift up American workers and create good-paying, union jobs across the country. It’ll lower the deficit and ask the ultra-wealthy and corporations to pay their fair share. And no one making under $400,000 per year will pay a penny more in taxes.

CREATE CLEAN ENERGY JOBS

The Inflation Reduction Act creates good-paying union jobs that will help reduce emissions across every sector of our economy. As President Biden promised when running for president, the law includes some of the strongest labor protections and incentives ever attached to clean energy tax credit programs. It will:

  • Incentivize prevailing wages. The expanded tax credits for energy efficient commercial buildings, new energy efficient homes, and electric vehicle (EV) charging infrastructure will include bonus credits for businesses that pay prevailing wages and hire registered apprentices, ensuring local wages are not undercut by low-road contractors.
  • Stop companies from ripping off workers. It will penalize companies that promise to pay prevailing wages but don’t follow through, and workers who are owed prevailing wages will receive the difference, plus interest.
  • Make it in America. For the first time ever, the Inflation Reduction Act establishes Make it in America provisions for the use of American-made equipment for clean energy production. The law provides expanded clean energy tax credits for wind, solar, nuclear, clean hydrogen, clean fuels, and carbon capture, including bonus credits for businesses that pay workers a prevailing wage and use registered apprenticeship programs.

…

REVITALIZE AMERICAN MANFACUTURING

President Biden made a promise to re-energize American manufacturing, and he kept his promise. The President already has the strongest record of growing manufacturing jobs in modern history, and this law invests in American workers and industry. The Inflation Reduction Act will:

  • Build American clean energy supply chains, by incentivizing domestic production in clean energy technologies like solar, wind, carbon capture, and clean hydrogen.
  • Support American workers with targeted tax incentives aimed at manufacturing U.S.-sourced products such as batteries, solar, and offshore wind components, and technologies for carbon capture systems.
  • Strengthen America’s manufacturing base. The Inflation Reduction promotes domestic sourcing and American jobs. For example, clean energy tax credits are increased if the amount of American steel used in wind projects meets the domestic content threshold, and bonus credits apply to employers who use of prevailing wages and apprenticeships, ensuring that federal tax policy supports good-paying, high-skilled jobs.
  • Create good-paying union jobs in energy communities. Clean energy tax credits will be increased by 10% if the clean energy projects are established in communities that have previously relied upon the extraction, processing, transport, or storage of coal, oil, or natural gas as a significant source of employment, creating jobs and economic development in the communities that have powered America for generations.

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L&I Partners With U.S. Department Of Labor To Coordinate Labor Law Enforcement In Pennsylvania

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Pennsylvania Pressroom
8/19/22

​Harrisburg, PA – Department of Labor & Industry (L&I) Secretary Jennifer Berrier today announced a Memorandum of Understanding (MOU) between L&I and the U.S. Department of Labor’s Wage and Hour Division (DOL) to share information regarding violations of labor and workers’ compensation laws that fall under the investigation purview of both departments.

“Our partnership with the federal Department of Labor extends greater protections for Pennsylvania’s workers and ensures more robust compliance assistance for employers,” Berrier said. “Sharing information and resources between federal and state agencies charged with enforcing similar laws allows us to better achieve our joint mission of protecting Pennsylvania workers effectively and efficiently.”

Created due to the overlap in some of the services that the DOL administers, and laws enforced by L&I’s Bureau of Labor Law Compliance and Bureau of Workers’ Compensation, the MOU establishes a five-year agreement, allowing DOL and L&I to partner where applicable. The agreement allows the departments to, among other things, perform joint investigations throughout the commonwealth, share training materials, assist employers and employees with compliance assistance information, coordinate enforcement activities, and suggest referrals for violations.

“We look forward to working with Pennsylvania Labor & Industry as our partner. Our combined efforts will enhance our own resources and ensure increased compliance by employers throughout the commonwealth,” said DOL’s Northeast Wage and Hour Division Regional Administrator Mark Watson. “Our agencies share a common purpose of ensuring the proper working conditions for workers in Pennsylvania. Our working together and sharing resources to achieve efficiency in that common purpose makes sense.”

The Department of Labor & Industry enforces 14 labor laws, including the Construction Workplace Misclassification Act (Act 72), Prevailing Wage Act, Child Labor Act, Minimum Wage Act, Wage Payment Collection Law, Prohibition of Excessive Overtime in Health Care Act (Act 102), Medical Pay Law, Apprenticeship and Training Act, Equal Pay Law, Industrial Homework Law, Personnel File Inspection Act, Seasonal Farm Labor Act, Construction Industry Employee Verification Act, and Workers’ Compensation Act, and the regulations expressed for each.

(See Article)

NJDOL Uses Expanded Powers to Stop Worker Exploitation at Job Sites

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August 17, 2022

NJDOL Uses Expanded Powers to Stop Worker Exploitation at Job Sites
Authority Extended Three Years Ago Helps Curtail Wage, Benefits Violations & Misclassification

TRENTON – In the three years since Governor Murphy signed a law expanding NJDOL’s powers to stop work on a job site when there is strong evidence workers are being exploited, the department has issued 71 stop-work orders, through which agents found nearly $1 million in back wages owed to 235 workers.

The law gave NJDOL’s Division of Wage and Hour and Contract Compliance the power to immediately halt work at any public or private work site – both construction and non-construction sites – when an initial investigation finds evidence that the employer has violated any state wage, benefit or tax laws.

“With the authority to issue stop-work orders as soon as we identify a violation, the NJDOL gained the ability to shut down a job when it finds workers are being exploited,” said Labor Commissioner Robert Asaro-Angelo. “The legislation signed by Governor Murphy in the Summer of 2019 has given NJDOL a powerful enforcement tool to uphold its mission of protecting our workforce, strengthening our businesses, and promoting the dignity of work.”

The most common violations leading to stop-work orders are: employers not having workers’ compensation insurance or misclassifying employees as independent contractors. Other examples include employers who fail to pay prevailing wage or overtime; those who have outstanding judgements against them; or those whose workers were not paid, were paid late or were shorted, or were paid in cash off the books. Often, these unscrupulous employers have not made their required contributions to the state unemployment trust fund, from which unemployment payments are drawn.

Prior to the law’s enactment, the NJDOL had little recourse to stop or prevent violators from shirking these policies. Work stoppages were rarely utilized because they could be applied only in cases when an employer amassed a history of violations. This made stopping out-of-state violators doing work in New Jersey particularly difficult, as they often left the state before the department could enforce state regulations.

Stop-work orders have been used to shut down work sites of all types, such as construction jobs, restaurants, an internet radio station, and medical offices. Typically, stop-work orders are resolved in a matter of a few days, and are often resolved on the spot when the order is delivered to a business – as was the case in August 2021 when the NJDOL issued stop-work orders to four separate businesses for wage violations, with each business paying the back wages owed to their workers immediately to avoid closure.

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