Project Labor Agreements Expanded to More Public Construction in New Jersey

In one of his final official acts, on January 20, 2026, New Jersey Governor Phil Murphy signed legislation amending the state’s Project Labor Agreement (PLA) statute, N.J.S.A. 52:38‑1 et seq. The amendment allows municipalities, counties, school districts, and fire districts to require a PLA on public works projects regardless of project cost. Prior to the amendment, PLAs could be required only on projects with a total cost of $5 million or more exclusive of land acquisition. This significant expansion of the use of PLAs could potentially reduce the number of contractors willing or able to perform public works projects in New Jersey.

What Is a PLA?

A PLA is a form of pre‑hire collective bargaining agreement advocated by unions in the building trades. A PLA governs a particular construction project and typically includes procedures to resolve jurisdictional disputes between unions, no-strike provisions, and uniform work rules applicable to the covered project. PLAs also incorporate by reference the separate labor contracts of building trade unions whose members will work on the project, and almost always mandate that work on the project be performed exclusively by labor obtained through hiring halls operated by those same unions.

Background

The New Jersey legislature first authorized public bodies to enter into PLAs for certain large public works projects in 2002 with the stated objective of promoting labor stability, efficiency, and workforce development. In 2021, the legislature expanded the definition of “public works project” to include additional categories of construction work that previously had not been subject to PLAs. The latest amendment expands the reach of PLAs significantly by removing the $5 million threshold that had reserved them for large projects.

What Employers Should Know

Currently, only a few of the state’s municipalities have codified a preference for requiring PLAs for their public works projects. That number can be expected to grow – perhaps exponentially – with the $5 million project cost threshold eliminated and the state’s building trades unions actively advocating greater use of PLAs. Contractors who perform public work should anticipate that future public construction in New Jersey will include more PLA mandates.

Contractors who are currently union signatories may see little difference in how they pursue or perform PLA-covered work. These contractors must of course review how a specific PLA will operate, particularly where the PLA takes precedence over the terms of labor contracts with individual unions.

Contractors who are not union signatories are not precluded from working under PLAs, but are strongly advised to consider:

• Reviewing PLA Terms & Application to Your Scope: All project managers and supervisory personnel should be briefed on labor staffing requirements, hiring hall procedures, applicable apprenticeship and Minority and Women-owned Business Enterprises (M/WBE) requirements and any other project-specific rules established under the PLA.
• Assessing Staffing: Understand how contracted work will be completed under a system where most labor will be supplied through a union hiring hall. Evaluate whether the PLA allows an otherwise non-union subcontractor to use its own non-supervisory employees to any extent on the project. Also ascertain which building trade union claims jurisdiction over work to be performed and discuss any potential jurisdictional disputes between unions at the customary pre-job assignment meeting.
• Evaluating Exposure: PLAs typically require contributions to multi-employer benefit funds maintained by signatory building trade unions. These funds could under some circumstances pose the risk of withdrawal liability when the obligation to contribute permanently ceases, such as upon expiration of a PLA.  Contractors should understand how to assess the potential for such liability based on the scope of work they would perform under a PLA, as well as the funds to which they could be required to contribute.
• Setting Pricing Accordingly: Update cost models to reflect not only wage and benefits required by a PLA, but also the financial impact of work rules contained either in the PLA itself or in one of its incorporated trade union labor contracts. The concept of union work jurisdiction itself (i.e. only members of the union with jurisdiction can perform covered work), as well as provisions such as minimum manning and show-up pay frequently result in added costs that non-union contractors otherwise do not incur.
• Informing Subcontractors: Under a PLA, subcontractors are required to adopt and become bound by the PLA. Accordingly, contractors should inform subcontractors at the outset of the applicability of a PLA, provide copies and advise of anticipated issues. Contractors should also secure from subs the required Letter of Assent – the document by which all participating contractors adopt and agree to be bound by a PLA.
• Designating a Compliance Lead: Assign a dedicated resource to coordinate PLA compliance, including but not limited to managing hiring hall requests, benefit fund contributions, grievances that may arise, certified payroll reporting, apprentice utilization and M/WBE participation.

Experienced labor counsel can assist with the above and with the administration of PLA requirements during the course of a covered project.

Conclusion

With more projects now covered by PLAs, contractors in New Jersey should be mindful of how these changes may affect bidding and project execution. We will continue to monitor developments and provide updates as they emerge.