The Michigan Prevailing Wage Act, which has been reinstated as of February 13, 2024, brings significant changes for contractors and subcontractors involved in state-funded construction projects. Originally repealed in 2018, the return of this Act aims to ensure workers receive fair wages and benefits consistent with local industry standards. This article will outline the critical aspects of the reinstated Act, its application to public school projects, and the role of the Michigan Department of Labor and Economic Opportunity (DLEO) in enforcement.
What Is the Michigan Prevailing Wage Act?
The reinstated Michigan Prevailing Wage Act requires contractors and subcontractors to pay employees the prevailing wage and benefit rates for most state-funded construction projects. These rates are determined by local labor conditions to ensure fair compensation.
Key Exemption:
Projects funded by millages approved before February 13, 2024, including public school construction projects, are exempt from the Act’s requirements.
Responsibilities for Contractors Under the Reinstated Act
To comply with the Michigan Prevailing Wage Act, contractors and subcontractors must:
- Post Wage Rates at Job Sites: Contractors are required to post the prevailing wage rates at each construction site for transparency.
- Maintain Payroll Records: Accurate records of wages and benefits paid must be kept for a minimum of three years.
- Include Compliance Language in Contracts: Future contracts must explicitly state that wages and fringe benefits meet or exceed the established prevailing wage and fringe benefit rates.
Role of the Michigan Department of Labor and Economic Opportunity (DLEO)
The DLEO has been granted the authority to enforce the reinstated Act. Their responsibilities include:
- Determining Prevailing Wages: The DLEO commissioner will establish prevailing wage and benefit rates for all classes of employees before any new state-funded construction projects are bid.
- Enforcing Compliance: The DLEO can conduct investigations into alleged violations of prevailing wage requirements.
- Providing Wage Schedules: Contractors must include wage and fringe benefit schedules in their project specifications and on bidding forms.
Why Compliance Is Essential
Compliance with the reinstated Michigan Prevailing Wage Act is crucial to avoid penalties, delays, and potential legal action. Contractors should prioritize understanding the updated requirements and maintaining meticulous payroll records to ensure smooth project execution.
