Update Applicable to:	Effective Date
All Employers Involved in Data Center Construction Projects	April 1, 2026

What happened?

On January 20, 2026, New Jersey Senate Bill S4928 (P.L.2025, c.335) was signed into law. This legislation establishes prevailing wage requirements for designated data center construction projects that meet the statutory thresholds.

The act becomes effective on the first day of the third month following its enactment; with an enactment date of January 20, 2026, the expected effective date is April 1, 2026.

Overview

• New Jersey requires employers to pay the prevailing wage on qualifying data center construction projects, as determined by the Commissioner of Labor and Workforce Development.

• Data Center: A qualifying project is one involving construction or related work on data facilities that process, store, or distribute electronic data and have either an electrical capacity of at least 250 kilowatts or are designed to use an average of 500 kilowatt-hours or more after construction.

• The law establishes specific compliance standards for contractors working on qualifying data center construction projects.

• Overall, the law ensures wage fairness and strengthens safety, transparency, and compliance requirements for contractors on large scale data center projects.

Why this matters

• Employers commissioning or overseeing data center projects must ensure prevailing wage compliance, which may increase labor cost projections.

• Employers must verify contractor eligibility, safety record requirements, and payroll documentation standards to avoid penalties.

• Because a project now qualifies once it meets a 250‑kilowatt electrical capacity or 500‑kilowatt‑hour usage design, more mid‑sized data center builds may fall under prevailing wage rules than employers expect.

Action Steps for Compliance

• Determine whether the planned data center project meets either qualifying threshold: an electrical capacity of at least 250 kilowatts or a design with average usage of 500 kilowatt‑hours or more after construction.

• To ensure compliance with the law, employers should implement the following actions when selecting or onboarding contractors:

• Verify that all contractors hold a valid Public Works Contractor Registration.
• Require confirmation that certified payroll reporting processes are in place and compliant.
• Obtain proof that the contractor’s workers’ compensation experience modifier rate is 0.95 or lower.
• Update contract templates to include prevailing wage obligations and compliance clauses.
• Confirm required safety documentation including Occupational Safety and Health Administration logs, safety plan, training certifications.
• Confirm the contractor maintains required daily sign-in sheets documenting worker´ names, employer, and time on site.
• Verify required insurance and bonding, including $2 million in coverage and a 150% performance/payment bond.
• Ensure the contractor meets experience and labor standards, including similar project experience and subcontracting limits.

• Coordinate with HR, Payroll, and Legal Teams to ensure prevailing wage schedules from New Jersey Department of Labor & Workforce Development (NJDOL) are referenced and applied.

• Ensure field leaders understand wage obligations and certified payroll requirements.

• Adjust the budgets to reflect prevailing wage obligations.

Source References

• NJ S4928 – Requires payment of prevailing wage for certain data center construction.

Resources

• New Jersey Department of Labor & Workforce Development – Prevailing Wage Information.

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