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Michigan’s Prevailing Wage Law 101

Dec 12, 2017

You may have heard a little something about Michigan’s Prevailing Wage Law in the news. We’ll explain why, but first let’s dig into that law and what it’s about.

What is the Prevailing Wage Law?

Michigan’s Prevailing Wage Law was enacted in 1965. It states that the Department of Labor and Regulatory Affairs (LARA) determines the rate at which construction workers are paid on state funded or sponsored projects.

According to the LARA website, “prevailing rates are compiled from the rates contained in collectively bargained agreements which cover the locations of the state projects. The prevailing rates provide an hourly rate which includes wage and fringe benefit totals for designated construction mechanic classifications. The overtime rates also include wage and fringe benefit totals.”

Having this law in place gives workers precedent to petition for missing wages if they were not initially paid the prevailing wage.

Advocates of the law say the prevailing wage ensures a high quality of workmanship.

Why is it in the news?

Proponents of this law are advocating for its repeal through a voter-initiated referendum. In Michigan, that requires a little more than 250,000 valid signatures from registered voters. Once those signatures are certified by the Bureau of Elections, the initiative heads to the Legislature in Lansing.

The group collecting signatures submitted more than 380,000.

This group believes that by removing the prevailing wage, the wages for workers would be set by the free-market and save taxpayer money. Their opponents who defend the law think its repeal would exacerbate the problem with the shortage of skilled trades workers.

What’s Next?

The Bureau of Elections has 60 days to certify those signatures. Stay tuned to see if and when the initiative makes its way to the statehouse for debate.

 

Michigan Legislative Consultants is a bipartisan lobbying firm based in Lansing, Michigan. Our team of lobbyists and procurement specialists provide a wide range of services for some of the most respected companies in America. For more on MLC, visit www.mlcmi.com or connect with us on LinkedIn and Twitter.

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