Wage Theft in the Building Trades: When NJ General Contractors Are Liable for a Sub's Unpaid Workers

Under New Jersey law, wage theft in the building trades extends beyond the direct employer, placing legal obligations on general contractors. Our attorneys at Brandon J. Broderick regularly review cases where workers are paid by an agency, but perform work that benefits several companies on the job site. When a subcontractor fails to pay construction workers, a New Jersey general contractor may share legal responsibility for the unpaid wages.

In this guide, we discuss when general contractors become responsible for unpaid salaries, what workers need to prove to recover their paychecks, where liability is disputed, and when to speak with a wage and hour lawyer in New Jersey. 

How New Jersey Holds Employers Responsible for Wage Theft in the Building Trades

A construction worker is often hired and paid by a subcontractor while a general contractor manages the project. If the subcontractor fails to pay, New Jersey law sometimes holds the general contractor responsible as well.

N.J.S.A. 34:11-67.1 applies to the company that signs the construction contract directly with the property owner. On most projects, this company is the general contractor. It is responsible for covering wage debts left by subcontractors working on the project, including subcontractors hired by other subcontractors.

The law covers New Jersey contracts entered into on or after Jan. 1, 2020, for construction, reconstruction, demolition, alterations, maintenance, painting, decorating, and repairs. It reaches private construction as well as public work, subject to the New Jersey Prevailing Wage Act. It doesn’t cover construction or repair work at a home where the property owner lives. 

Liability depends on several facts:

• The worker performed labor covered by the main construction contract.
• A subcontractor failed to pay salaries connected to that work.
• The general contractor had a direct contract with the property owner.
• The construction contract was entered into on or after Jan. 1, 2020.
• The work was not covered by a collective bargaining agreement with another lawful way to recover the unpaid compensation.

It doesn’t matter which company issued the worker’s checks. A general contractor doesn’t avoid responsibility because it never placed the worker on its payroll.

Contract provisions and multiple layers of subcontractors do not change the worker's protections. A general contractor may seek reimbursement from the third-party provider that failed to pay, but that does not affect the employee's claim. Unsafe conditions, confined space injuries, and unpaid compensation each involve different legal rules. A wage and hour attorney in New Jersey can explain how those claims fit together. 

Which Pay Violations Create General Contractor Liability in NJ

Wage theft includes more than a missing paycheck. A worker might receive regular pay but no overtime. Records might omit preparation, cleanup, or travel between jobsites during the workday. Cash payments without pay stubs also hide the hours and rate used.

Common problems on construction projects include:

• Paying less than New Jersey’s 2026 minimum rate of $15.92 an hour.
• Failing to pay time and one-half after 40 hours in one workweek.
• Leaving hours off a time sheet or certified payroll record.
• Deducting the cost of tools, equipment, transportation, or damaged materials unlawfully.
• Paying less than the hourly rate promised when the worker was hired.
• Using the wrong trade classification or hourly rate on public work.
• Calling an employee an independent contractor and issuing a 1099 form.

Section 67.1 makes the general contractor responsible for the unpaid wages, interest, penalties, and liquidated damages tied to the subcontractor’s violation. New Jersey’s Wage Theft Act allows recovery of the missing paychecks, reasonable attorney fees, and liquidated damages of up to 200% of the amount owed. If a worker is shorted $10,000, the wages and liquidated damages together reach as much as $30,000.

Liquidated damages aren’t automatic for a first violation. To avoid them, the employer must:

• Prove that the underpayment resulted from an unintentional error.
• Show it had reasonable grounds for its actions.
• Acknowledge the violation.
• Pay all compensation owed within 30 days after receiving notice. 

Misclassification is closely tied to construction wage claims. A 1099 form or independent contractor agreement doesn’t settle a worker’s status. New Jersey’s ABC test assumes the worker is an employee by default. The employer must prove the worker is free from its control, works outside its usual trade or locations, and operates an independent business of their own. Failure on one part means employee status.

In East Bay Drywall, LLC v. Department of Labor, the New Jersey Supreme Court treated 16 drywall installers as employees rather than independent contractors. The decision upheld a $42,120.79 assessment for unpaid unemployment and disability contributions.

Different Pay Rules for New Jersey’s Public Work and Data Centers

Workers on covered public projects receive the prevailing wage for their trade and location. The New Jersey Prevailing Wage Act requires certified payroll records within 10 days after compensation is paid.

Senate Bill 4928, enacted as P.L. 2025, c.335 and effective April 1, 2026, adds special rules for qualifying data centers designed to use at least 5 megawatts each year. It requires prevailing wages and makes contractors responsible for wages, benefits, and other amounts left unpaid by subcontractors.

Recovering Subcontractor Unpaid Wages Under New Jersey Law 

Section 67.1 limits who enforces a claim against the general contractor. New Jersey’s labor commissioner pursues these debts through NJDOL. A worker starts by filing a complaint identifying the project, employer, general contractor, and known third-party providers.

A 2023 amendment, P.L. 2023, c.210, allows a union to bring a claim even if it doesn’t represent project employees. A nonunion worker must give written consent before receiving representation. Joint labor-management cooperation committees hold similar rights.

Before filing, the union or committee must give the general contractor and employing subcontractor at least 30 days’ notice describing the claim. A successful case brings litigation costs and expert witness fees.

An individual worker doesn’t have a separate right to sue the general contractor based on Section 67.1. Workers still have the right to pursue claims against their employer, including claims for unpaid wages and, in some cases, withheld or unpaid bonuses. A direct claim against the general contractor may also exist if the facts show it acted as an employer or shares liability under another law. 

Different cases have different deadlines. Under New Jersey law, workers generally have up to six years to recover unpaid minimum wages or overtime, but the lawsuit usually must be filed within two years of the violation. Our attorneys at Brandon J. Broderick often see workers wait because a subcontractor keeps promising payment, only to find that some claims are no longer available. Claims under the federal Fair Labor Standards Act must be filed within two years, or three years if the violation was willful. 

NJDOL accepts complaints online, by mail, and by fax. Public construction workers use the prevailing wage form. Each person files individually, although investigators might review an entire crew’s payroll after finding a broader problem. Immigration or citizenship status doesn’t prevent filing. Anonymous complaints limit the department’s ability to request missing information.

Workers should include copies of their time records, pay stubs, text messages, and any documents showing which construction project they worked on. Keep the original records. These documents help the New Jersey Department of Labor determine how much is owed and identify the contractors involved during the unpaid pay periods.

New Jersey law also protects workers from retaliation. An employer cannot fire, threaten, demote, cut a worker's hours, or punish them for reporting, helping with an investigation, or talking with coworkers about their rights. If the employer takes action within 90 days of the protected activity, the law presumes it was retaliation. The employer can overcome that presumption only by proving, with clear and convincing evidence, that it acted for a different reason. 

The Records That Help Prove Wage Theft in New Jersey's Building Trades

Construction records can become incomplete or difficult to piece together. Crews move from one project to another, and smaller businesses don’t always keep accurate time records. Our team regularly encourages workers to keep their own records before important details are forgotten or lost. 

Useful evidence includes:

• A personal log listing start times, meal periods, end times, and each worksite.
• Pay stubs, checks, bank deposits, and records of cash payments.
• Texts, emails, and messages assigning work or discussing hours and pay.
• Job badges, orientation papers, sign-in sheets, and safety documents.
• Photographs of any related signs, vehicles, and prevailing wage notices.
• Names of foremen, coworkers, project managers, and subcontractors.
• Certified payroll records or prevailing wage determinations from a public project.

New Jersey lets general contractors review payroll information from subcontractors. Requested records must cover employees working on the project. Subcontractors must also disclose project information, their relationships with other agencies, estimated worker hours, and lower-tier subcontractor contacts.

Building a Strong Construction Wage Claim in New Jersey

In April 2025, the New Jersey Department of Labor and the attorney general sued a Jersey City general contractor and five subcontractors. The lawsuit alleged off-the-books pay, unpaid overtime, worker misclassification, and other wage violations. Investigators identified at least 34 contractors and subcontractors connected to the project, and 16 received wage, benefit, or tax assessments. Even though the general contractor reportedly had no construction workers on its own payroll, the state still sought payment from it.

A worker's claim is stronger when it shows both the unpaid wages and every company connected to the project.  Contact us today for a free consultation if you would like our team to review your situation.