State Building Service Contracts FAQs
What is the State Building Service Contracts Act?
What are "building services"?
How does the State Building Service Contracts Act differ from the Prevailing Wage Act?
How is the term "building" defined, for the purpose of compliance with the State Building Service Contracts Act?
What is meant by the term "engineering", for purposes of complying with the State Building Service Contracts Act?
Under the State Building Service Contracts Act, how does the Commissioner of Labor and Workforce Development designate the prevailing wage levels for covered employment?
Where can I find a listing of the wage determinations for the appropriate localities and classifications of building service employees?
Where can I locate more answers to my questions about the federal Service Contract Act?
Which occupations are included in the performance of "building services"?
What are some examples of the types of service activities, which would be excluded under the State Building Service Contracts Act?
If terms of a collective bargaining agreement specify a higher wage rate than the wage standard currently designated by the Commissioner, based on determinations made by the General Services Administration pursuant to the federal Service Contract Act, can the worker be paid the lower of the two rates?
Does the State Building Service Contracts Act require payment of overtime rates?
How must the contractor or subcontractor calculate the pay for a worker who performs at multiple classes of work requiring different wage rates under the same contract?
How must the contractor or subcontractor calculate the overtime pay for a worker who performs at multiple classes of work requiring different wage rates under differing contracts, when one contract is subject to the State Building Service Contracts Act and the other contract is not?
Does the State Building Service Contracts Act apply to every worker?
What records must a contractor or subcontractor who furnishes building services to covered premises keep?
What happens if the wage rates change after a contractor has submitted a bid or started work?
What date should be used to implement any "annual adjustments"?
What should workers do if they believe they may have not been paid properly?
What are the penalties for not complying with the provisions of the State Building Service Contracts Act?
Q. What is the State Building Service Contracts Act?
A. The State Building Service Contracts Act establishes prevailing wage levels for the employees of contractors and subcontractors furnishing building services for any property or premises owned or leased by the State.
Q. What are "building services"?
A. The term "building services" is defined within the Act as, "any cleaning or building maintenance work, including but not limited to sweeping, vacuuming, floor cleaning, cleaning of rest rooms, collecting refuse or trash, window cleaning, engineering, securing, patrolling, or other work in connection with the care, securing or maintenance of an existing building, except that "building services" shall not include any maintenance work or other public work for which a contractor is required to pay the "prevailing wage" as defined within the New Jersey Prevailing Wage Act [N.J.S.A. 34:11-56.25, et seq.]."
Q. How does the State Building Service Contracts Act differ from the Prevailing Wage Act?
A. The State Building Service Contracts Act establishes prevailing wage levels only for building service workers and only when such services are performed under a contract with the State (not municipalities or counties) for the performance of same for a property or premises owned or leased by the State.
The Prevailing Wage Act (N.J.S.A. 34:11-56.25 et seq.) establishes prevailing wage levels for workers engaged in "public works", which is defined under the Prevailing Wage Act to include construction, reconstruction, demolition, alteration, custom fabrication or repair work or maintenance work, including painting and decorating, done under contract and paid for in whole or in part out of the funds of a public body, except work performed under a rehabilitation program.
Q. How is the term "building" defined, for the purpose of compliance with the State Building Service Contracts Act?
A. The Department considers the term, "building" to include everything within the outer walls of the building structure, including the exterior of those walls, and any front, rear or side portico attached to the building itself. Consequently, washing the exterior windows of the building would be covered under the State Building Service Contracts Act, as would maintenance of the portico immediately outside of the building.
Q. What is meant by the term "engineering", for purposes of complying with the State Building Service Contracts Act?
A. For the purposes of compliance with the Act, the Department considers the term "engineering" to mean the daily, routine maintenance of the physical plant of a building including, but not limited to boilers, heating, ventilation, and air-conditioning (HVAC) systems, electrical service, and plumbing. Some of the "engineering" occupations that are covered by the Act are listed in the wage rate determinations and job title descriptions.
Excluded from the definition of "engineering" under the State Building Contracts Act are the following:
Q. Under the State Building Service Contracts Act, how does the Commissioner of Labor and Workforce Development designate the prevailing wage levels for covered employment?
A. The State Building Service Contracts Act requires that the Commissioner of Labor and Workforce Development base his or her prevailing wage for building services designations on the wage determinations made by the General Services Administration, pursuant to the federal "Service Contract Act of 1965" (41 U.S.C. s.351, et seq.) for the appropriate localities and classifications of building service employees.
Q. Where can I find a listing of the wage determinations for the appropriate localities and classifications of building service employees?
A. The Department of Labor and Workforce Development provides the wage and benefit rates at www.nj.gov/labor/lsse/bldgwagerate.html.
Q. Where can I locate more answers to my questions about the federal Service Contract Act?
A. You may visit the federal website, which has its own list of FAQs at http://www.dol.gov/whd/regs/compliance/web/SCA_FAQ.htm
Q. Which occupations are included in the performance of "building services"?
A. The most common occupations involved in the performance of "building services" include, but are not limited to, the following:
Q. What are some examples of the types of service activities, which would be excluded under the State Building Service Contracts Act?
A. Activities that do not provide services related to the building structure itself, such as snow removal and outside lawn/landscaping maintenance are excluded.
Q. If terms of a collective bargaining agreement specify a higher wage rate than the wage standard currently designated by the Commissioner, based on determinations made by the General Services Administration pursuant to the federal Service Contract Act, can the worker be paid the lower of the two rates?
A. No, the worker may not be paid the lower of the two rates. Provisions of the State Building Service Contracts Act do not interfere with, impede, or in any way diminish the right of workers to establish and receive wages in excess of any applicable minimum under the Act. If a collective bargaining agreement has established a higher rate, the covered workers must receive the higher rates.
Q. Does the State Building Service Contracts Act require payment of overtime rates?
A. Yes. State wage and hour laws require the overtime rate of one and ½ times the hourly wage rate be paid for work over 40 hours in any workweek. Under the State Building Services Contracts Act, the regular or basic hourly rate of the employee shall not include any fringe benefit payments computed. Additionally, the federal Service Contract Act, upon which the wage and benefit rates are based, makes no distinction between temporary, part-time, and full-time employees. The wage and fringe benefit determinations apply equally to all such service employees engaged in work subject to the Act's provisions. A sample for calculating the payment of wages and the benefit rate when overtime is due follows:
Q. How must the contractor or subcontractor calculate the pay for a worker who performs at multiple classes of work requiring different wage rates under the same contract?
A. If an employee during a workweek works in multiple classes of work in the performance of the contract and two or more rates of compensation under the federal Service Contract Act are applicable to the separate classes of work, which he or she performs, the employee must be paid the highest of such rates for all hours worked in the workweek unless it appears from the employer's records or other affirmative proof which of such hours were included in the periods spent in each class of work. The rule is the same where such an employee is employed for a portion of the workweek in work not subject to the Act, for which compensation at a lower rate would be proper if the employer by his records or other affirmative proof, segregated the work time thus spent.
Q. How must the contractor or subcontractor calculate the overtime pay for a worker who performs at multiple classes of work requiring different wage rates under differing contracts, when one contract is subject to the State Building Service Contracts Act and the other contract is not?
A. Overtime rates paid to an employee, as described above, are paid in accordance with State law. No benefits rate is required on the overtime rate, by State law. The contractor or subcontractor is required to pay overtime to the employee, as described in the question above, using a "weighted averaged method", as shown in the following example. The total gross wage is divided by the total number of hours worked to obtain the average hourly rate. The average hourly rate is then divided in half to determine the additional premium (half-time) rate due the employee.
Example:
A. No, the State Building Service Contracts Act does not apply to every worker. The State Building Service Contracts Act provides that for occupations to which the new wage standards apply, the Commissioner or Director of the Division of Wage and Hour Compliance may issue a special license authorizing employment at wages less than the wage standard established for building services for a fixed period of time for those whose earning capacity is impaired by age or physical or developmental disability or injury.
Q. What records must a contractor or subcontractor who furnishes building services to covered premises keep?
A. Each contractor and subcontractor shall keep an accurate record showing the name, classification, and actual hourly rate of wages, daily and weekly hours worked and any hourly cost of benefits paid to each worker employed by him or her to perform building services pursuant to a State contract or subcontract, and shall preserve those records for two years after the date of payment, for work performed under the contract. The contractor shall also maintain certified payrolls covering the corresponding two-year period. However, general payroll records must be kept for six years. A sample of the payroll certification form is available at: http://www.state.nj.us/labor/lsse/forms/payrollcert.pdf.
Q. What happens if the wage rates change after a contractor has submitted a bid or started work?
A. The State Building Service Contracts Act requires that a contract shall provide for "annual adjustments" to the prevailing wage rate during the term of the service contract.
Q. What date should be used to implement any "annual adjustments"?
A. The anniversary date of the contract shall determine the date of any "annual adjustments".
Q. What should workers do if they believe they may have not been paid properly?
A. Workers should file a Wage Claim (form MW-31B) for monies due. Click here to obtain a copy of the form or contact the Division of Wage and Hour Compliance at (609) 292-2305. Mail your completed form to the address listed at the top of the form.
Q. What are the penalties for not complying with the provisions of the State Building Service Contracts Act?
A. A violator of the Act will be charged with a disorderly persons offense, and upon conviction could be fined not less than $100 and up to $1,000, or be imprisoned for not less than 10 nor more than 90 days, or be subject to both the fine and imprisonment. The Act also provides that the LWD Commissioner can assess a violator with administrative penalties up to a maximum of $250 for a first violation and up to a maximum of $500 for each subsequent violation. Additionally, for violations of the Act, when the commissioner supervises the payment of amounts of wages due to workers, contractors or subcontractors will be required to pay the commissioner an administrative fee equal to not less than 10% or more than 25% of any gross unpaid wages.
What are "building services"?
How does the State Building Service Contracts Act differ from the Prevailing Wage Act?
How is the term "building" defined, for the purpose of compliance with the State Building Service Contracts Act?
What is meant by the term "engineering", for purposes of complying with the State Building Service Contracts Act?
Under the State Building Service Contracts Act, how does the Commissioner of Labor and Workforce Development designate the prevailing wage levels for covered employment?
Where can I find a listing of the wage determinations for the appropriate localities and classifications of building service employees?
Where can I locate more answers to my questions about the federal Service Contract Act?
Which occupations are included in the performance of "building services"?
What are some examples of the types of service activities, which would be excluded under the State Building Service Contracts Act?
If terms of a collective bargaining agreement specify a higher wage rate than the wage standard currently designated by the Commissioner, based on determinations made by the General Services Administration pursuant to the federal Service Contract Act, can the worker be paid the lower of the two rates?
Does the State Building Service Contracts Act require payment of overtime rates?
How must the contractor or subcontractor calculate the pay for a worker who performs at multiple classes of work requiring different wage rates under the same contract?
How must the contractor or subcontractor calculate the overtime pay for a worker who performs at multiple classes of work requiring different wage rates under differing contracts, when one contract is subject to the State Building Service Contracts Act and the other contract is not?
Does the State Building Service Contracts Act apply to every worker?
What records must a contractor or subcontractor who furnishes building services to covered premises keep?
What happens if the wage rates change after a contractor has submitted a bid or started work?
What date should be used to implement any "annual adjustments"?
What should workers do if they believe they may have not been paid properly?
What are the penalties for not complying with the provisions of the State Building Service Contracts Act?
Q. What is the State Building Service Contracts Act?
A. The State Building Service Contracts Act establishes prevailing wage levels for the employees of contractors and subcontractors furnishing building services for any property or premises owned or leased by the State.
Q. What are "building services"?
A. The term "building services" is defined within the Act as, "any cleaning or building maintenance work, including but not limited to sweeping, vacuuming, floor cleaning, cleaning of rest rooms, collecting refuse or trash, window cleaning, engineering, securing, patrolling, or other work in connection with the care, securing or maintenance of an existing building, except that "building services" shall not include any maintenance work or other public work for which a contractor is required to pay the "prevailing wage" as defined within the New Jersey Prevailing Wage Act [N.J.S.A. 34:11-56.25, et seq.]."
Q. How does the State Building Service Contracts Act differ from the Prevailing Wage Act?
A. The State Building Service Contracts Act establishes prevailing wage levels only for building service workers and only when such services are performed under a contract with the State (not municipalities or counties) for the performance of same for a property or premises owned or leased by the State.
The Prevailing Wage Act (N.J.S.A. 34:11-56.25 et seq.) establishes prevailing wage levels for workers engaged in "public works", which is defined under the Prevailing Wage Act to include construction, reconstruction, demolition, alteration, custom fabrication or repair work or maintenance work, including painting and decorating, done under contract and paid for in whole or in part out of the funds of a public body, except work performed under a rehabilitation program.
Q. How is the term "building" defined, for the purpose of compliance with the State Building Service Contracts Act?
A. The Department considers the term, "building" to include everything within the outer walls of the building structure, including the exterior of those walls, and any front, rear or side portico attached to the building itself. Consequently, washing the exterior windows of the building would be covered under the State Building Service Contracts Act, as would maintenance of the portico immediately outside of the building.
Q. What is meant by the term "engineering", for purposes of complying with the State Building Service Contracts Act?
A. For the purposes of compliance with the Act, the Department considers the term "engineering" to mean the daily, routine maintenance of the physical plant of a building including, but not limited to boilers, heating, ventilation, and air-conditioning (HVAC) systems, electrical service, and plumbing. Some of the "engineering" occupations that are covered by the Act are listed in the wage rate determinations and job title descriptions.
Excluded from the definition of "engineering" under the State Building Contracts Act are the following:
- Workers under any contract for construction, reconconstruction, demolition, alteration, or repair of public buildings or public works, including painting and decorating. These are covered by the Prevailing Wage Act, N.J.S.A. 34:11-56.25 et seq.
Q. Under the State Building Service Contracts Act, how does the Commissioner of Labor and Workforce Development designate the prevailing wage levels for covered employment?
A. The State Building Service Contracts Act requires that the Commissioner of Labor and Workforce Development base his or her prevailing wage for building services designations on the wage determinations made by the General Services Administration, pursuant to the federal "Service Contract Act of 1965" (41 U.S.C. s.351, et seq.) for the appropriate localities and classifications of building service employees.
Q. Where can I find a listing of the wage determinations for the appropriate localities and classifications of building service employees?
A. The Department of Labor and Workforce Development provides the wage and benefit rates at www.nj.gov/labor/lsse/bldgwagerate.html.
Q. Where can I locate more answers to my questions about the federal Service Contract Act?
A. You may visit the federal website, which has its own list of FAQs at http://www.dol.gov/whd/regs/compliance/web/SCA_FAQ.htm
Q. Which occupations are included in the performance of "building services"?
A. The most common occupations involved in the performance of "building services" include, but are not limited to, the following:
- Boiler Tender
- Guard I
- Guard II
- Janitor
- Laborer
- Pest Controller
- Stationary Engineer
- Swimming Pool Operator
- Ventilation Equipment Tender
- Window Cleaner
Q. What are some examples of the types of service activities, which would be excluded under the State Building Service Contracts Act?
A. Activities that do not provide services related to the building structure itself, such as snow removal and outside lawn/landscaping maintenance are excluded.
Q. If terms of a collective bargaining agreement specify a higher wage rate than the wage standard currently designated by the Commissioner, based on determinations made by the General Services Administration pursuant to the federal Service Contract Act, can the worker be paid the lower of the two rates?
A. No, the worker may not be paid the lower of the two rates. Provisions of the State Building Service Contracts Act do not interfere with, impede, or in any way diminish the right of workers to establish and receive wages in excess of any applicable minimum under the Act. If a collective bargaining agreement has established a higher rate, the covered workers must receive the higher rates.
Q. Does the State Building Service Contracts Act require payment of overtime rates?
A. Yes. State wage and hour laws require the overtime rate of one and ½ times the hourly wage rate be paid for work over 40 hours in any workweek. Under the State Building Services Contracts Act, the regular or basic hourly rate of the employee shall not include any fringe benefit payments computed. Additionally, the federal Service Contract Act, upon which the wage and benefit rates are based, makes no distinction between temporary, part-time, and full-time employees. The wage and fringe benefit determinations apply equally to all such service employees engaged in work subject to the Act's provisions. A sample for calculating the payment of wages and the benefit rate when overtime is due follows:
- The "A" company pays a service employee $12.16 an hour in cash under a wage determination, which requires a monetary rate of not less than $9 and a fringe benefit contribution of $3.16. The contractor pays the $3.16 in cash because he made no contributions for fringe benefits specified in the determination and the contract. Overtime compensation in this case would be computed on a regular or basic rate of $9 an hour. At the above rates, the worker would be entitled to $16.66 (1 ½ times $9.00 = $13.50, plus the $3.16 in cash totals $16.66).
Q. How must the contractor or subcontractor calculate the pay for a worker who performs at multiple classes of work requiring different wage rates under the same contract?
A. If an employee during a workweek works in multiple classes of work in the performance of the contract and two or more rates of compensation under the federal Service Contract Act are applicable to the separate classes of work, which he or she performs, the employee must be paid the highest of such rates for all hours worked in the workweek unless it appears from the employer's records or other affirmative proof which of such hours were included in the periods spent in each class of work. The rule is the same where such an employee is employed for a portion of the workweek in work not subject to the Act, for which compensation at a lower rate would be proper if the employer by his records or other affirmative proof, segregated the work time thus spent.
Q. How must the contractor or subcontractor calculate the overtime pay for a worker who performs at multiple classes of work requiring different wage rates under differing contracts, when one contract is subject to the State Building Service Contracts Act and the other contract is not?
A. Overtime rates paid to an employee, as described above, are paid in accordance with State law. No benefits rate is required on the overtime rate, by State law. The contractor or subcontractor is required to pay overtime to the employee, as described in the question above, using a "weighted averaged method", as shown in the following example. The total gross wage is divided by the total number of hours worked to obtain the average hourly rate. The average hourly rate is then divided in half to determine the additional premium (half-time) rate due the employee.
Example:
- An employee performs one building-service contract job for $10.00 per hour and performs another job not covered by the contract for $7.75 per hour. The employee works 30 hours at $10.00 per hour and 16 hours at $7.75 per hour for a total of 46 hours during the week. The overtime rate due the employee is calculated as follows:
30 hours x $10.00 per hour = $300.00
16 hours x $7.75 per hour = $124.00
Total gross = $424.00
The total gross ($424.00) is divided by the total hours (46) to obtain the average hourly rate. The average hourly rate is $9.22 per hour.
Q. Does the State Building Service Contracts Act apply to every worker?The employee is still due the additional premium pay (half-time) for the 6 overtime hours. The average hourly rate ($9.22) is divided in half. The half-time rate is $4.61.
Six overtime hours x $4.61 = $27.66
The $27.66 (premium pay) is added to the original gross amount of $424.00. The new gross amount is $451.66. This is the amount that must be paid to the employee for the week.
A. No, the State Building Service Contracts Act does not apply to every worker. The State Building Service Contracts Act provides that for occupations to which the new wage standards apply, the Commissioner or Director of the Division of Wage and Hour Compliance may issue a special license authorizing employment at wages less than the wage standard established for building services for a fixed period of time for those whose earning capacity is impaired by age or physical or developmental disability or injury.
Q. What records must a contractor or subcontractor who furnishes building services to covered premises keep?
A. Each contractor and subcontractor shall keep an accurate record showing the name, classification, and actual hourly rate of wages, daily and weekly hours worked and any hourly cost of benefits paid to each worker employed by him or her to perform building services pursuant to a State contract or subcontract, and shall preserve those records for two years after the date of payment, for work performed under the contract. The contractor shall also maintain certified payrolls covering the corresponding two-year period. However, general payroll records must be kept for six years. A sample of the payroll certification form is available at: http://www.state.nj.us/labor/lsse/forms/payrollcert.pdf.
Q. What happens if the wage rates change after a contractor has submitted a bid or started work?
A. The State Building Service Contracts Act requires that a contract shall provide for "annual adjustments" to the prevailing wage rate during the term of the service contract.
Q. What date should be used to implement any "annual adjustments"?
A. The anniversary date of the contract shall determine the date of any "annual adjustments".
Q. What should workers do if they believe they may have not been paid properly?
A. Workers should file a Wage Claim (form MW-31B) for monies due. Click here to obtain a copy of the form or contact the Division of Wage and Hour Compliance at (609) 292-2305. Mail your completed form to the address listed at the top of the form.
Q. What are the penalties for not complying with the provisions of the State Building Service Contracts Act?
A. A violator of the Act will be charged with a disorderly persons offense, and upon conviction could be fined not less than $100 and up to $1,000, or be imprisoned for not less than 10 nor more than 90 days, or be subject to both the fine and imprisonment. The Act also provides that the LWD Commissioner can assess a violator with administrative penalties up to a maximum of $250 for a first violation and up to a maximum of $500 for each subsequent violation. Additionally, for violations of the Act, when the commissioner supervises the payment of amounts of wages due to workers, contractors or subcontractors will be required to pay the commissioner an administrative fee equal to not less than 10% or more than 25% of any gross unpaid wages.
