The New Jersey Department of Labor (NJDOL) has launched a new public website, the Workplace Accountability in Labor List (WALL), that displays the names of businesses barred from contracting with New Jersey state agencies, counties, local government bodies or other subdivisions because they have outstanding state wage, benefit or unemployment insurance/gross income tax liabilities. The WALL is a new tool to encourage compliance authorized by legislation enacted in 2019 (S4226). (See N.J.S.A. 34:1A-1.16 implementing S4226.)

Program administration

The WALL website provides details about how the tool will be administered by the Office of Strategic Enforcement and Compliance (OSEC), a division of the NJDOL, and starting in September 2023, will start publicly listing the businesses that having met the criteria, are barred from public contracting with New Jersey governmental bodies. This list will be updated monthly, no later than the 15th day of the month, and can be viewed from the website or downloaded as an Excel file.

Laws applicable to the WALL

The WALL applies to outstanding liabilities incurred under New Jersey's state wage, benefit and tax laws, which under N.J.S.A. 34:1A-1.11, include:

Labor laws

• New Jersey Wage Payment Law (N.J.S.A. 34:11-4.1 et seq.)
• New Jersey Prevailing Wage Act (N.J.S.A. 34:11-56.25 et seq.)
• Earned Sick Leave Law (N.J.S.A. 34:11D-1 et seq.).
• Workers' Compensation Law (N.J.S.A. 34:15-1 et seq.)
• Unemployment Compensation Law (N.J.S.A. 34:43:21-1 et seq.)
• Temporary Disability Benefits Law (N.J.S.A. 43:21-25 et al.)
• Family Temporary Disability Leave Act (N.J.S.A. 43:21-39.1 et al.)

Tax law

Although the WALL is administered by the NJDOL, its reach extends to obligations administered by the New Jersey Department of the Treasury (Treasury) under the New Jersey Gross Income Tax Act (N.J.S.A. 54A:1-1 et seq).

The Gross Income Tax Act governs the following business obligations:

• Withholding New Jersey state income tax from wages, payments to unincorporated independent contractors, pensions and annuities
• Filing withholding tax returns
• Filing information returns (e.g., Forms W-2, 1099)
• Providing information statements to income recipients (e.g., Forms W-2, 1099)

For more information, see NJ-WT, New Jersey Income tax Withholding Instructions.

Getting on and off the WALL

Any business with a final order/judgement for an outstanding liability due to a violation of New Jersey's state wage, benefit and tax laws can be listed on the WALL. However, under N.J.S.A. 34:1A-1.16(g), the NJDOL will consider the following factors in making the final determination:

• A record of previous violations
• A previous listing on the WALL
• The frequency of violations as discovered in previous or pending cases
• The significance of the violation
• Failure to pay the obligation
• Failure to cooperate or respond to a request to produce records, forms, documents or proof of payments
• Submission to the NJDOL of falsified or altered records, forms, documents or proof of payment
• Failure to provide goods or services
• Failure to comply with contract specifications

Under the law, businesses cannot be listed on the WALL until the NJDOL provides them with a Notice of Intent (Notice). The Notice must be sent at least 15 days before listing the business on the WALL and provides information concerning the outstanding final order/judgment and the options available to avoid being listed, including how to pay outstanding liabilities or request a hearing. The Notice also informs businesses that they will be prohibited from public contracting and denied any financial assistance from the state if they do not resolve their outstanding liabilities.

If a business has not paid its outstanding liabilities within 20 calendar days of receiving the Notice, its name will be posted on the WALL and will remain there until full payment of the obligation is received.

If a business pays its outstanding liabilities, it will be removed from the WALL within 15 days of satisfying its obligation and will receive a Notice of Removal from the NJDOL stating that the business has regained its right to engage in public contracting with New Jersey governmental bodies.

Ernst & Young LLP insights

New Jersey is not the only state to use public listings as a taxpayer inducement to resolve outstanding tax liabilities. For example, Delaware, New York and Oregon  have public delinquent taxpayer listings. However, systematically posting the names of businesses with outstanding wage and benefit claims together with those having outstanding gross income tax liabilities is not commonplace.

Given its far reach and adverse impact on business reputation, New Jersey employers should closely monitor the WALL.

New Jersey businesses with a potential risk of being listed on the WALL include those that are:

• Undergoing a New Jersey unemployment insurance, state income tax withholding or wage-hour audit
• In receipt of unemployment insurance contribution delinquency notices from the NJDOL or withholding tax delinquency notices from the Treasury
• Engaging in widespread worker classification violations
• Aware of substantial wage and benefit claims that employees have filed with the NJDOL

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Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor