Michigan agency gathering info this month to set prevailing wage

Beth LeBlanc
The Detroit News

Gov. Gretchen Whitmer's administration earlier this month began to survey union contractors about what they pay employees in an attempt to set a prevailing wage for state contracts moving forward. 

The survey sent by the Michigan Department of Labor and Economic Opportunity wage and hour division asked unions to provide information on prevailing wage and fringe benefits that were in place 60 days prior to survey completion. 

The survey asks the unionized groups to list rates by employee classification and geographic areas and to provide copies of the collective bargaining agreement in which those rates were set. 

The emailed survey appears to be the first concrete action the Whitmer administration has taken to implement the prevailing wage policy she announced Oct. 7 — a signal the governor is "really going to put this in play," said Jimmy Greene, president for Associated Builders and Contractors of Michigan, which represents most non-union contractors in Michigan. 

Michigan's 1965 prevailing wage law essentially requires union-level wages be paid to construction workers on publicly funded projects.

The group has been watching how the policy is implemented as it mulls possible legal action to challenge the policy.

"We really know what the cost of construction is now," Greene said. "But you implement prevailing wage and you’re right back to artificially inflated costs.”

The same survey process was used to establish prevailing wage for decades prior to the law's repeal in 2018, said Jason Moon, a spokesman for the Department of Labor and Economic Opportunity. It was sent Nov. 4 to the president of the Michigan Building and Construction Trades Council, which will distribute the survey to several labor unions. 

"The survey process, which has been in place for decades, utilizes local area collectively bargained wage rates between bona fide employee organizations and employer associations for the various construction trades to establish area construction wage standards," Moon wrote.

The state hopes to have the rates established and available online by early December, Moon said. After that, the Department of Technology, Management and Budget will determine an effective date for the policy. 

"We are working to get them online to allow time for corrections if necessary and ensure they are available well ahead of any DTMB implementation of prevailing wage," Moon said.

Whitmer's Oct. 7 announcement stirred controversy as it reversed a policy GOP lawmakers repealed in 2018 that required state contractors to pay union wages and benefits on state-funded construction projects. 

Under the new policy, the Department of Technology, Management and Budget will "require" prevailing wage under "its authority to develop the terms of state contracts."

The directive will only restore prevailing wage rules for "state-owned projects" instead of all state-funded projects that were impacted by the 2018 prevailing wage repeal.

"The policy rewards hard work and ensures working people can earn a decent standard of living, take care of their families, and have a secure retirement," Moon said. "By reinstating prevailing wage, Michigan can continue making progress on critical infrastructure, including roads, bridges, water infrastructure, high-speed internet, and more."

Federal policies already require local prevailing wages be paid on projects through federally funded or assisted contracts in excess of $2,000 for the construction, alteration or repair of public buildings or public works, according to the U.S. Department of Labor.

That will likely be the case for much of the federal infrastructure money coming into Michigan over the next year, making the effect of Whitmer's policy difficult to predict, Greene said. 

Greene posited that Whitmer's real motivation was to win back union support after her decision to shut down Line 5 ran counter to the desires of contractor unions.

"This seems to be unnecessary really in many respects,” Greene said. "If any of our guys bid on those projects, they know they’ll have to use that Davis-Bacon (federal) marker.”

But unions remain hopeful the policy will have a distinct effect on their work. 

"We lost out on a lot of school work," after the 2018 repeal became effective, said Byron Osbern, business representative for IBEW 58. "Once prevailing wage was repealed, the doors were wide open. It was essentially a race to the bottom with contracting.”

Osbern pushed back against criticisms of prevailing wage, arguing that it ensured quality work was done on state construction projects. 

"It helps the end user in my opinion because now you have a workforce that is highly skilled, efficient," he said. "It’s an investment.”