United States: Bill Would Impose Significant Apprenticeship Requirements On New Jersey Contractors

On December 17, 2018, the New Jersey Legislature paved the way for a game-changing prerequisite for N.J. public works contractors.  The State Assembly and Senate passed Assembly Bill A-3666 and forwarded it to Governor Murphy for his signature.  If signed into law as is expected, the bill—which would impose new apprenticeship and training requirements on public works contractors—would be among the most restrictive of its kind in the country. Governor Murphy has until the end of January to sign the legislation, which would become effective 90 days thereafter.

What Are the New Contractor Obligations?

The bill, which blazed its way through the lawmaking process, would require a contractor to certify its participation in a U.S. Department of Labor (DOL)-approved apprenticeship program in order to obtain or renew its public works contractor registration certificate.  Further, apprenticeship programs would have to include training for every classification of worker a contractor employs on a public works jobsite.  Thus, if a contractor employs workers in a single job classification, participation in a program limited to just that one classification would suffice.  If, however, a contractor employs workers in multiple classifications on a covered job site, the contractor would have to certify participation in an apprenticeship program that encompasses each and every such classification.  

It is anticipated that many of the state's 10,000+ registered contractors do not currently participate in a DOL-approved program, and would not therefore be able to register/renew their public works contractor registration certificates.  Instead, only those contractors that participate in a DOL-approved program (whether through or in conjunction with a trade association or a labor union) or that maintain their own apprenticeship program will be able to obtain and/or renew their public works contractor registration certificates.  It is important to note that there is nothing in the law to suggest that currently registered contractors will be precluded from continuing to perform prevailing wage work while their current registration is in effect.  However, once the new law is in effect, contractors will not be able to obtain or renew their registration unless they are able to certify that they participate in an apprenticeship program.

What Are a Contractor's Options?

Contractors that are not currently participating in an approved apprenticeship program but wish to remain eligible for prevailing wage work have several options.  First, a contractor could sign with a building trades union.  Most of the building trades unions operating in New Jersey maintain DOL-approved apprenticeship programs.  There are, of course, implications beyond apprenticeship that accompany union relationships.  Before signing with a union, contractors are advised to seek counsel to fully understand the obligations that go along with forming a collective bargaining relationship. 

Second, contractors could team up with an association/industry group that maintains DOL-registered apprenticeship programs.  These groups are currently few in number in New Jersey, although the pending law has spurred a flurry of activity.  Existing groups like the Associated Builders & Contractors are reported to be awaiting final approval on an apprentice program covering multiple classifications, and new groups with similar plans are rumored to be on the horizon. 

Third, contractors can create their own DOL-approved apprenticeship program.  While maintaining an apprenticeship program is frequently the option offering the greatest flexibility for an individual contractor, those that opt to go this route must be prepared to navigate the process of designing and registering a program, and to comply with mandatory record-keeping and other requirements once their program is operating. 

In the interim, contractors whose public works contractor registration certificates expire in the first quarter of 2019—before the law's likely effective date—are encouraged to renew at the earliest possible time (i.e., 30 days prior to expiration).  Where possible, contractors should consider renewing for a two-year period.  By doing so, they may be able to buy time until their next renewal to address the apprenticeship issue. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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