Key Takeaways
- NJDOL issued a stop-work order against MCH Masonry Group (Conshohocken, PA) on June 17, 2026, at a Sprouts Market job site in Mercerville, NJ — 11 workers affected
- The violations: worker misclassification and failure to maintain required employment records
- This follows a April 2026 double stop-work order in Newark against two out-of-state contractors, affecting 81 workers combined
- NJDOL and the US DOL signed a formal cooperation agreement in May 2026 for joint misclassification enforcement
- Operating in violation of a stop-work order costs $5,000 per day — on top of back wages and per-worker penalties
- New Jersey's formal ABC test rules (N.J.A.C. 12:11) take effect October 1, 2026 — about 80 days from now
What Happened
On June 17, 2026, the New Jersey Department of Labor and Workforce Development (NJDOL) issued a stop-work order against MCH Masonry Group Inc., a masonry contractor based in Conshohocken, Pennsylvania. The order halted work at a Sprouts Market construction site at 373-374 Highway 33 in Mercerville, NJ. NJDOL announced the action in a press release dated June 25, 2026.
The order cited two violations: misclassifying workers and failing to maintain required employment records. Eleven workers at the site were affected. Work could not resume until the company came into compliance.
Two details matter here for every NJ contractor, not just masonry firms. First, MCH Masonry isn't a New Jersey company — it's based in Pennsylvania. NJDOL doesn't limit its enforcement to NJ-headquartered businesses; it monitors active job sites and acts on what it finds there, regardless of where the contractor is based. Second, the trigger wasn't just misclassification on its own — it was misclassification combined with missing payroll records. Sloppy recordkeeping is, on its own, enough to draw a stop-work order.
This Isn't Isolated — NJDOL Enforcement Is Accelerating
The MCH Masonry action is not a one-off. On April 14, 2026, NJDOL issued stop-work orders against two other out-of-state contractors — DM Windows (Staten Island, NY) and BLK1 Construction Corp (New York) — working at a Newark apartment complex. That action affected 43 and 38 workers respectively, for a combined 81 workers across the two companies at a single site.
The pattern is consistent: NJDOL is actively monitoring active construction sites across the state and issuing stop-work orders in real time when it finds misclassification, not waiting for complaints to come in. And the enforcement infrastructure behind this is getting stronger. In May 2026, NJDOL and the U.S. Department of Labor signed a formal memorandum of cooperation for joint enforcement on worker misclassification, according to a report from Jackson Lewis. That means state and federal labor agencies are now coordinating — not operating in separate silos — on the exact issue at the center of the MCH Masonry case.
NJDOL also has the authority to issue company-wide stop-work orders, not just site-specific ones, for contractors found to be repeat violators. A contractor that gets caught once and doesn't fix the underlying practice risks a much broader shutdown the second time.
What a Stop-Work Order Actually Means
A stop-work order isn't a warning letter. It's an immediate, enforceable halt on work at the cited location (or, for repeat violators, across the company). Here's how it plays out in practice:
- Work must stop immediately at the affected site once the order is issued and posted
- $5,000 per day in civil penalties accrues for any contractor who continues working in violation of the order
- The order stays in effect until the contractor pays all outstanding back wages owed to affected workers and all assessed penalties — not one or the other
- Stop-work orders are public actions — NJDOL publicizes them, and they show up in press releases and public enforcement records
For a GC or project owner, a stop-work order on a sub's crew doesn't just stop that sub's work — it stops progress on the whole job. Schedules slip, other trades get delayed, and the project owner starts asking hard questions about who else on the site might have the same problem.
The Full Cost of Getting Caught
The stop-work order itself is just the opening move. The financial exposure for misclassification in New Jersey stacks on top of it, and it adds up fast:
| Exposure | Amount |
|---|---|
| Per-employee penalty (first violation) | $250 per misclassified worker |
| Per-employee penalty (subsequent violations) | Up to $1,000 per misclassified worker |
| Penalty paid directly to the worker | Up to 5% of the worker's gross earnings over the past 12 months |
| Stop-work violation fine | $5,000 per day the company keeps working under the order |
| Back wages, payroll taxes, WC premium adjustments | Full retroactive liability — varies by case, often the largest line item |
| Public "name and shame" listing | Publicly listed on NJDOL's website; bars the company from public contracts |
| Insurance fraud penalty (if intentional) | $5,000 (first offense) to $15,000+ (subsequent) under the NJ Insurance Fraud Prevention Act |
Notice that the per-employee civil penalty is often the smallest number on this list. Back wages, unpaid payroll taxes, and workers' comp premium adjustments are usually where the real money is. And if NJDOL determines the misclassification was intentional rather than a mistake, the case moves into insurance fraud territory — a different, and more serious, category of liability entirely.
Being listed publicly matters more than it might seem. NJDOL's public enforcement list is checked by GCs, project owners, and public agencies vetting bidders. A listing there can quietly close doors on work you'd never even know you lost.
The October 1 ABC Test — The Bigger Context
The MCH Masonry stop-work order landed under the existing legal standard. But New Jersey has now formally codified that standard in writing, and it becomes operative on October 1, 2026, under N.J.A.C. 12:11.
Under the new rules, every worker is presumed to be an employee. The burden is on the hiring contractor to prove otherwise, by satisfying all three prongs of the ABC test:
Free from control — in contract and in fact
Not just what the contract says — what actually happens on the job. If you set the worker's schedule, supply their tools, or direct their day-to-day work, this prong is at risk.
Outside your usual course of business, or outside all your business locations
If you're a masonry contractor hiring a masonry sub to do masonry work, that work is inside your usual course of business — a hard prong to pass in most trades.
Customarily engaged in an independently established trade or business
Multiple clients, their own tools, their own advertising, their own employees. A worker who works only for you, under your direction, is an employee — no matter what the paperwork says.
A written 1099 agreement or a 1099 tax form does not determine legal status on its own. Labels don't matter — NJDOL looks at how the relationship actually functions. And these rules don't apply narrowly: they reach across NJ's Unemployment Compensation Law, Wage and Hour Law, and Wage Payment Law simultaneously, which means one misclassification finding can trigger exposure in all three areas at once.
The Contractor Self-Audit Checklist
You have roughly 80 days before the new rules take effect — and enforcement is already happening under the current standard. Here's what to check now:
- List every 1099 sub you've used in the past 12 months and test each one against all three ABC prongs — honestly, not how the contract reads
- Ask: are you setting their schedule, supplying their tools, or directing their work daily? If yes, that relationship looks like employment
- Ask: do they have their own business, their own other clients, and their own insurance? That's a stronger contractor case
- Fix your payroll recordkeeping now — missing employment records is exactly what triggered the MCH Masonry stop-work order
- Confirm every worker on your NJ job sites has proper workers' comp coverage, including subs whose status might be borderline
- If a relationship is genuinely close to the line, consider bringing that worker on payroll rather than betting on a 1099 classification holding up
GC Liability — Your Subs' Problem Becomes Your Problem
If you're a general contractor, your exposure doesn't stop at your own payroll. Under New Jersey law, misclassification by your subcontractors can create joint liability that reaches you too — especially if you knew, or should have known, how those subs were operating on your job.
That means vetting your subs' classification practices isn't just good practice — it's risk management for your own business. Before you bring a sub onto a job, it's worth asking basic questions: do they carry their own workers' comp, do they have other active clients, and do they maintain their own payroll records? If a sub gets hit with a stop-work order on your site, your project timeline, your reputation with the property owner, and potentially your own liability are all on the line.
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Get a Free Quote →This article is for general informational purposes only and does not constitute legal or insurance advice. Worker classification rules are fact-specific and enforcement details can change. Consult a qualified NJ labor attorney before making decisions about how you classify your workers. Source: NJDOL press release, June 25, 2026.