Work on Old Town High Street in Hemel Hempstead by Jackson Civil Engineering is also being re-phased to minimise disruption.
Local businesses have reported workers with their feet-up in diggers for hours.
Jackson Civil Engineering told the BBC that using CCTV was a “collective decision” to “monitor” the work.
Barry Garvin, from Fretts music shop, said he regularly saw men in diggers “with their feet up”, texting and walking around “just chatting” or leaning on shovels with “no sense of urgency”.
He said: “Last week there was a guy sitting in a digger, he was there for four hours and didn’t move, I honestly thought he’d died, I was going to see if he was OK then I saw him stir.”
Work to install the one-way system, run by Hertfordshire County Council (HCC) for Dacorum Borough Council, started in June and was due to finish at the end of October.
The work is running five weeks late and there will now be a break between the end of November and the New Year
A statement for the contractors said: “We took the collective decision to install cameras on the project to ensure the progress of the job can be monitored in the most efficient way possible.”
HCC said it was “not a covert operation” as all the workers were aware of the cameras, they were not manned on a live basis and it just meant the council could see if a complaint was valid.