April 19, 2019

April 18, 2019

Subscribe to Latest Legal News and Analysis

April 17, 2019

Subscribe to Latest Legal News and Analysis

April 16, 2019

Subscribe to Latest Legal News and Analysis

Michigan Repeals Prevailing Wage Act

On June 6, 2018, the Michigan Legislature repealed the state’s Prevailing Wage Act through the Michigan Repeal Prevailing Wages and Fringe Benefits on State Projects Initiative (the “Initiative”). Michigan’s Prevailing Wage Act required project owners to pay workers union-scale wages and benefits for state-funded construction projects. The repeal took effect on June 6, but it does not affect preexisting contracts.

The Initiative was a result of resident petitions (the petition received over 300,000 signatures), and rather than place the Initiative on the November ballot, the Legislature repealed the Act. While Governor Snyder publicly opposed repealing wages, the repeal became law without his signature or his ability to veto it.

Supporters of the Initiative claim that paying prevailing wages for state projects overcharges taxpayers and limits the number of projects that can be funded or supported. Supporters argue that the Initiative will promote the free market and fair competition. Opponents of the Initiative argue that prevailing wages provide construction workers with fair and standardized wages and benefits so that workers can comfortably provide for their families and that taking away prevailing wages will drive qualified workers away from the state. Opponents also argue that the repeal will ultimately lead to lower quality work because unions will no longer be able to fund adequate training and apprenticeships.

The Prevailing Wage Act repeal did not affect the federal Davis-Bacon Act, which requires payment of prevailing wages on federally funded projects. It also does not affect municipal and township laws that might require payment of prevailing wages. Many projects receive both state and federal funding, and such projects (such as highway construction) will likely still require payment of prevailing wages.

Michigan is now one of 23 states without prevailing wage laws. Michigan is part of a trend of states repealing prevailing wage laws with six states repealing such laws since 2015.

Mallory Campbell contributed to this article. 

© Copyright 2019 Dickinson Wright PLLC

TRENDING LEGAL ANALYSIS


About this Author

Christina McDonald, Commercial and Business Litigation, Dickinson Wright, law firm
Associate

PROMINENT ASSIGNMENTS Assisted Fortune 150 company obtain zoning approvals, tax incentives, and ordinance compliance for development of new world headquarters. Assisted major manufacturing company with federal regulatory compliance for new product development. Assisted in successful defense of land development company in Michigan Supreme Court litigation. Counsel to companies in employment matters. Assisted medical company in acquiring a rehabilitation facility. Provided real estate and contractual due diligence for a significant wind farm development. Successfully...

616-336-1039