Following the enactment of one of the most significant labor measures in state history, New Jersey municipalities now have a powerful new tool to manage public construction projects.
On January 20, 2026, outgoing Governor Phil Murphy signed Bill S4864, expanding the ability of local government entities to use Project Labor Agreements (PLAs) on public works projects. The legislation authorizes municipalities, counties, school districts, and fire districts across New Jersey to enter into PLAs with local Building Trades Councils for projects below $5 million.
The bill received overwhelming bipartisan support in the Legislature — passing the General Assembly by a 63–10 vote and the Senate by a 35–4 margin — an uncommon show of unity in today’s political climate.
A Shift in Public Construction Policy
Prior to S4864, public entities in New Jersey were limited in their ability to implement PLAs on smaller-scale projects due to a $5 million minimum project cost requirement. By removing that barrier, lawmakers have significantly broadened local governments’ discretion in structuring construction contracts.
Supporters say the change gives municipalities greater flexibility to ensure labor stability and project efficiency — particularly on infrastructure improvements, school upgrades, and emergency facility construction that often fall below the former threshold.
What Is a Project Labor Agreement?
A Project Labor Agreement is a pre-hire collective bargaining agreement that establishes the terms and conditions of employment for a specific construction project. PLAs set standardized wages, define work rules, provide dispute resolution procedures, and prohibit strikes and lockouts for the duration of the project.
Advocates describe PLAs as an “insurance policy” for project owners and taxpayers. By establishing clear labor standards upfront, they aim to prevent costly delays and disruptions. PLAs typically require contractors to follow prevailing area wage and safety standards while ensuring access to a highly trained workforce.
Despite common misconceptions, PLAs do not exclude non-union contractors from bidding. Both union and non-union firms may compete for projects covered by a PLA, though contractors must agree to abide by the agreement’s terms for that project.
Promoting Workforce Development and Veteran Hiring
Under PLAs, contractors can draw workers from local union hiring halls and registered apprenticeship programs, providing access to skilled tradespeople trained in safety and craftsmanship standards. The agreements also encourage participation from veterans through workforce initiatives such as Helmets to Hardhats, which connects former service members with careers in the construction trades.
Proponents argue that these provisions not only strengthen project performance but also help promote local hiring, workforce development, and pathways into middle-class careers.
What It Means for Municipalities
With S4864 now in effect, municipalities and other public entities have a new strategic option when planning capital improvements. For projects ranging from road resurfacing and public safety facilities to school renovations and infrastructure upgrades, local leaders can now consider PLAs as a risk-management and workforce tool — even when project costs fall below $5 million.
As public infrastructure investment continues statewide, the expanded authority is expected to influence how local governments structure bids and manage construction projects in the years ahead.
