Another Brick in the WALL: New Jersey’s Latest Tool Targeting Businesses for Violating State Wage, Benefit, and Tax Law

On August 8, 2023, the Office of Strategic Enforcement and Compliance (OSEC) within the New Jersey Department of Labor and Workforce Development (the “NJDOL” or the “Department”) launched The WALL – the Workplace Accountability in Labor List.  The WALL (established under N.J.S.A. 34:1A-1.16) is a list that will include businesses with outstanding liabilities to the state for violations of state wage, benefit, and tax law enforced by the NJDOL.  Any business whose name appears on the WALL will be prohibited from public contracting, which includes contracting with any state agencies, counties, local government bodies, or other subdivisions of the state.

The WALL is yet another of the Department’s recent efforts to hold businesses accountable, enforce state labor laws, and promote what it sees as fair-minded business.  Similar efforts during Governor Murphy’s administration include enhanced penalties for misclassification of employees as independent contractors (N.J.S.A. 34:1A-1.18), and the expansion of the NJDOL’s authority to issue Stop Work Orders across several of an employer’s locations for violations of state wage, benefit and/or tax law (N.J.S.A. 34:11-56.35).

To be placed on the WALL, a business must have outstanding liabilities, which could include unpaid wages due to workers, unemployment insurance contributions due to the state, or workers’ compensation penalties.  A comprehensive list of the state wage, benefit, and tax laws enforced by the Department can be found in N.J.S.A. 34:1A-1.11.

The Department can place a business on the WALL only if a final order/judgment has been issued against the business.  A final order includes a final administrative determination of the Commissioner or other appropriate agency officer following adjudication of a matter as a contested case, or a finding regarding a violation or the levying of a penalty by the Department or another appropriate agency where the business has waived its right to a hearing by failing to request one in the appropriate time frame.  

While the Department can post the name of any business where a final order has been issued regarding outstanding liabilities, it will consider the following nine factors in doing so:

  1. Record of previous violations;
  2. Previous placement on the list by the Commissioner;
  3. Frequency of violations;
  4. Significance or scale of violations;
  5. Existence of failure to pay;
  6. Failure to cooperate or respond to a request to produce records, forms, documents, or proof of payments;
  7. Submission of falsified or altered records, forms, documents, or proof of payment;
  8. Failure to provide goods or services; and
  9. Failure to comply with contract specifications.

The NJDOL intends to publish the list beginning September 2023.  The list will be updated each month no later than the fifth day of the month.  As of this publication, The Department has already informed 40 businesses it intends to place their names on the WALL.  

The NJDOL is required to provide businesses advance notice of publication to the WALL.  At least 15 business days prior to placing the name of a business on the list, the NJDOL must send a Notice of Intent informing the business it will be placed on the WALL and explaining options to avoid the same.  If a business is unable to pay its outstanding liabilities in full within 20 calendar days of receiving the Notice, the NJDOL will post the business’s name on the WALL until full payment is made.  If a business satisfies its outstanding liabilities, the Department will remove it from the WALL within 15 days of determining satisfaction of outstanding liabilities in full and will issue a Notice of Removal, stating that the business’s right to engage in public contracting is restored.1

Alternatively, upon receipt of the Notice of Intent, a business may challenge its inclusion on the WALL by requesting a hearing within 20 days of receiving the Notice of Intent.  The NJDOL will thereafter conduct an informal settlement conference and transfer the matter to a hearing before the Office of Administrative Law if no resolution is reached.  The NJDOL will not post the business’s name on the WALL while a timely appeal is pending.

In light of this new tool in the Department’s arsenal, businesses are strongly encouraged to consult with counsel on their state wage, benefit, and tax law compliance to minimize the potential for being placed on the WALL, particularly if a business has already received a final order concerning wage, tax or benefit liabilities or is undergoing a NJDOL audit.

See Footnotes

​1 Even if a business’s name is removed from the WALL, there may be other reasons why a business may still be prohibited from public contracting, such as if the business has been debarred for a period of time under the New Jersey Prevailing Wage Act, or if the business’s registration or licenses is not in good standing.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.