Stop Work Orders on Public Projects Serve as a Warning to Public Entities and Contractors

In early October, the New Jersey Department of Labor and Workforce Development (NJDOL) stopped work on the construction of an elementary school in Dunellen and a high school in Belleville.  These recent shutdowns follow similar stop work orders that were issued by the NJDOL back in August on an elementary school project in Edison and a public golf course in Mahwah. The reason? The general contractor or a subcontractor on the project was performing work without a Public Works Contractor Registration Certificate.

Pursuant to the Public Works Contractor Registration Act (PWCRA), a contractor and subcontractor performing work on a public works project, which includes the construction, reconstruction, demolition, alteration, maintenance, or repair, must be registered with the NJDOL and have a New Jersey Public Works Contractor Registration Certificate (Certificate). Without such a Certificate, a contractor is not permitted to bid on a public works contract and neither the contractor nor a subcontractor is permitted to perform work on a public works contract.

Yet, there has been a growing trend in recent years of unregistered contractors and subcontractors performing work on public construction projects, in violation of the PWCRA.  As a result, the NJDOL is cracking down on violators and issuing stop work orders.  These recent shutdowns should serve as a warning to public entities and contractors alike. It is likely the NJDOL’s investigations of worksites will continue and stop work orders issued for any violations, as well as the assessment of monetary penalties against contractors who have failed to register.

These stop work orders should be particularly concerning to both public entities and contractors and they will inevitably delay the project.  Considering the current rise in market prices for raw materials, supply chain issues, and the labor shortage, any stoppage of work has the real potential to drive up the project’s costs.

There is an easy solution for public entities and contractors – confirm,  when obtaining a quote and/or at the time of bidding, that the general contractor and any named subcontractors hold an up-to-date Certificate.  This information can be easily verified on the NJDOL’s website, which provides a list of registered contractors. Taking this action early will prevent issues from arising once the project has started.

In the meantime, please contact Katy Fina if you have any questions or need assistance.