Prevailing wage (“PW”) law is an almost anachronistic subset within the field of wage hour law. Prevailing wages mean those wages that “prevail” in union contracts within a defined geographical area (i.e., a county) and are wages that must be paid on all public work, such as construction contracts to build roads, bridges, and, as discussed herein, in ameliorating the damage caused to New Jersey by Hurricane Sandy. Many see these statutes as union boondoggles because they artificially mandate an unusually high level of wages.
The NJ Department of Labor is very aggressive in its enforcement of the State’s prevailing wage law. Individuals (and classes of employees) may bring private lawsuits under the law and now, a construction company reconstructing the Seaside Heights, N.J., boardwalk in the aftermath of Superstorm Sandy has been hit with a class action alleging a failure to pay PW rate. The case is entitled Beza et al v. Jamali Developers LLC and was filed in Superior Court in Middlesex County, New Jersey.
The named plaintiffs, both carpenters, charge that overtime was not paid and more importantly PW rate was not paid. They allege there are 75 workers that are involved in the class, i.e., people who performed public work. The Complaint actually seeks a class wider than just “hands-on” workers at the public works site. It alleged that the “defendants’ actions in failing to pay proper overtime as required by the FLSA was not uniquely applied to the individual plaintiffs, but rather as a policy and practice applied to hourly employees as a whole.”
There are not many defenses against an allegation that prevailing rate was not paid. If the project qualifies as ‘public work,” meaning it was financed by public money beyond a tiny threshold, then (with very few exceptions) the PW rate has to be paid. The defenses lie in arguing that not as many hours were worked as claimed and that the craft rate that is alleged to be owed is the wrong classification and that the proper PW rate is a lower one, e.g. Carpenter (higher) rate vs. Laborer (lower) rate. For this defense to work, the work at issue must be claimed in the work jurisdictions of both unions.
The best option for the employer here is probably a quick settlement, or its money will be blown away by Sandy-force winds of litigation and then, in the end, it will still be liable for back due wages.