States, counties, and cities across the United States continue to implement safety precautions to slow the spread of the coronavirus outbreak (COVID-19). The coronavirus is affecting construction projects, and many are wondering if they can still work. Here, we’ve collected the orders issued within the state of New Jersey to determine whether construction is considered an essential business in NJ.
Federal guidelines for essential businesses
On March 28th, the Cybersecurity & Infrastructure Security Agency (CISA) – part of the Department of Homeland Security (DHS) – issued an advisory memorandum on what constitutes “essential critical infrastructure workers” during the COVID-19 pandemic. This list was intended to be a guide for state and local officials to protect their communities while ensuring the continuity of functions critical to public health and safety, as well as economic and national security.
However, states differ in their interpretation of “essential.” Some have adopted a broader definition, including construction in the list of essential businesses.
The CISA list identifies 16 different sectors that are considered essential. These include:
- Chemical Sector
- Commercial Facilities Sector
- Communications Sector
- Critical Manufacturing Sector
- Dams Sector
- Defense Industrial Base Sector
- Emergency Services Sector
- Energy Sector
- Financial Services Sector
- Food and Agriculture Sector
- Government Facilities Sector
- Healthcare and Public Health Sector
- Information Technology Sector
- Nuclear Reactors, Materials, and Waste Sector
- Transportation Systems Sector
- Water and Wastewater Systems Sector
For details under each sector, see: CISA: Advisory Memorandum on Identification of Essential Critical Infrastructure Workers During COVID-19 Response
Does New Jersey consider construction essential?
On April 8, 2020, Governor Phil Murphy issued the New Jersey Executive Order No. 122 which requires that all non-essential construction projects must suspend all activities starting April 10th. The order identified which types of construction projects are considered essential, and thereby allowed to continue.
New Jersey considers the following construction projects essential:
- Projects necessary for the delivery of health care services
- Includes hospitals and health care facilities
- Transportation projects
- Includes roads, bridges, and physical infrastructure
- Utility projects
- Residential projects exclusively for affordable housing
- Projects involving schools and higher education
- K-12 schools in NJ Schools Development Authority districts and higher education facilities
- Projects already underway:
- Involving individual single-family homes, or an individual apartment unity where an individual already resides, with a construction crew of 5 or fewer individuals; and
- Involving a residential unit for which a tenant or buyer has already entered into a legally binding agreement to occupy the unit by a certain date,m and construction is necessary to ensure the unit’s availability by that date.
- Construction projects involving data centers or facilities critical to a businesses’s ability to function
- Projects necessary for the delivery of essential services
- Projects necessary to support law enforcement agencies or first responder units
- Public projects (ordered by any level of government)
- Any work to secure and project a non-essential construction project for its suspension
- Any emergency repairs necessary to ensure the health and safety of residents
County and municipality restrictions
After the initial Stay-at-Home order was issued (Executive Order No. 107) back in February, the Governor also signed Executive Order No. 108. This order states that the executive order 107, and any subsequent updates or amendments, will invalidate any county or municipal restriction that will or might conflict with these requirements.
Counties and municipalities cannot make any additions or deletions from the list of essential retail businesses, or impose any additional limitations on businesses beyond the Governor’s Order, among other limitations. Therefore, the county or city restrictions on construction should all conform with the statewide orders issued by the Governor.
What New Jersey contractors should do now
Whether your construction project is considered essential business or not, contractors and suppliers in New Jersey should act now to get paid and protect cash flow.
If your NJ project is canceled
What if New Jersey doesn’t consider your project essential construction? Be sure to halt all construction activities immediately. Individuals found violating these requirements may be subject to criminal penalties such as fines up to $1,000, 6 months of imprisonment, or both.
If you haven’t been paid for work you’ve already completed, the best thing New Jersey contractors can do right now is to file a mechanics lien. Everyone is trying to get for the work they’ve already done – filing a lien will put you first in line.
Apply for an SBA Paycheck Protection Loan, and explore other avenues to get cash. Funding will get harder to access as more time passes.
If your NJ project is considered essential
If your construction project is allowed to continue, pay close attention to social distancing and hygiene requirements. In addition, it’s critical that you take every step you can to get paid for your work — and get paid faster. The only thing that’s certain right now is that nothing is certain. Set up a strict payment process to send:
and other documents on every single project. Pay close attention to New Jersey deadlines to file a mechanics lien or bond claim.
Amidst coronavirus chaos, the construction businesses that communicate, document, and diligently pursue their payments are the ones that are most likely to come out on the other side, ready to thrive.