(888) 745-0754

MICHIGAN PREVAILING WAGE

FREQUENTLY ASKED QUESTIONS ON STATE PREVAILING WAGE

Whether you are just starting out as a prevailing wage contractor or just looking to keep yourself updated, we have compiled these resources about state prevailing wage. Here are the most common questions of prevailing wage contractors and workers to help expand your knowledge!

The prevailing wage and fringe benefits rate is the established amount to be paid to workers of public work projects in the state of Michigan. These rates are determined by the Michigan Department of Licensing and Regulatory Affairs, and are overseen by the Wage & Hour Division.

The Michigan prevailing wage law covers employees working on new construction, repair, maintenance, alteration, installation, and other kinds of work on public works or state projects. Here are some things you should know about Prevailing Wage in Michigan.

What are the requirements that projects must meet before they can be covered by the Michigan Prevailing Wage Law?

The Michigan Prevailing Wage Law only covers a particular project if it meets five qualifications.

  • First, that state project must be authorized by a contracting agent.
  • Second, construction workers must be hired and involved in the project.
  • Third, it must be partly or fully sponsored by the state.
  • Fourth, it must enter a contract related to the advertisement and invitation to bid.
  • Lastly, prevailing wage rates must be paid to all workers to be covered by the prevailing wage law.
How are the prevailing wage rates determined?
Prevailing wage rates are determined by the compiled rates obtained in collective bargaining agreements. Prevailing wage rates are issued for each trade or classification or work, and are valid for 90 days upon issuance. Once the 90-day deadline expires, the prevailing wage rates must be determined again. If you think a work classification has been neglected in the official determination, you can request for rates from the governing body.

The prevailing wage rate includes the hourly rate, as well as the fringe benefits for the workers of prevailing wage contractors. Fringe benefits and hourly wages must also be included in overtime rates. Since prevailing wage rates are always being updated, it would be preferable for prevailing wage contractors to request the most current rates from the Michigan Department of Labor.

Is there a threshold requirement in the Michigan Prevailing Wage Law?
Unlike other Davis-Bacon Act states, the state of Michigan does not have a threshold requirement for projects.
Are there increases in prevailing wage Michigan?
Increases in Michigan prevailing wage only occur if there are increases on the updated rates by the Wage & Hour Division. If there are no increases in the most current rate, there would be no additional increase in the prevailing wage rate.
What are the rates for overtime, weekend work, shift differentials, and legal holiday work?
The overtime rates are different depending on the trade of the worker. The Wage & Hour Division uses a digit code for each trade classification to determine how the overtime rate will be applied for varying times. To know more, visit the website of the Wage & Hour Division.

For weekend work, the rate for Saturday work varies depending on the schedule that you were initially assigned. Sundays, on the other hand, are easier to determine. Usually, if employees work on a Sunday, their payment must be doubled by prevailing wage contractors. The same goes for working on legal holidays.

However, when it comes to shift differentials, the Michigan prevailing wage law does not establish different wage rates for different shifts. The wage rates of morning and evening shifts are the same.

What are the fringe benefits offered in Michigan prevailing wage?
Apart from the hourly rate, the Michigan prevailing wage law also offers fringe benefits. Some examples of fringe benefits include vacation and sick pay, paid leave, health and welfare contributions, medical insurance, and retirement contributions, among others. The prevailing wage in Michigan will be fulfilled if the wages and benefits paid to a worker is equal or greater than the prevailing wage required.
What should I know about Michigan apprenticeship requirements?
In order to be paid the apprentice wage rate, individuals must be registered with the US Department of Labor Apprenticeship Program under the Wage & Hour Division. Prevailing wage contractors must include training contributions as part of the prevailing wage rate. These contributions differ, depending on the trade classification of the employee.
What are the duties and responsibilities of contractors and subcontractors?
Although the Wage & Hour Division does not regulate the licenses required for contractors, prevailing wage contractors must still be licensed especially if their work on residential or commercial buildings. Contractors are subcontractors have specific duties as the overseers of the project. These duties include posting the prevailing wage rate and the Michigan Workforce Opportunity Wage Act on accessible areas in the construction site, paying the prevailing wage, and maintaining the record of the hourly wages and fringe benefits paid to all workers.

Apart from that, they must also ensure that these records and documents will be ready for inspection and auditing upon request of the contracting agency of the Department of Labor.

Who is responsible for solving disputes on the classification of workers?
The contracting agent in the project is the one responsible for the determination of the classification needed in the project. The Wage & Hour Division will not resolve issues on classification disputes, and will also not classify the workers in the project.
What are the penalties for non-compliance to the Michigan Prevailing Wage Law?
Any party that fails to comply with the regulations set by the Michigan Prevailing Wage Law is guilty of misdemeanor. The contracting agency also has the right to terminate the rest of the contract even if the guilty party is still in the middle of executing the project.

The Michigan prevailing wage law does not have a debarment provision for non-compliant companies. However, in order to help contracting agencies know the companies who have been guilty of non-compliance, a list of violators will be posted on the website of the Wage & Hour Division.

How does one file a complaint for nonpayment of hourly wage or fringe benefits?
If prevailing wage contractors are guilty of not paying or paying below the agreed upon prevailing wage rate, involved parties can file a complaint against the company. The complaint will be filed at the Wage & Hour Division, and must be filed within 12 months or a year of the alleged prevailing wage law violation.

If a person has been fired or has received reduced payment because of a complaint, he/she must file another complaint within 30 days of the wage reduction or discharge. Prevailing wage contractors are required to cooperate and provide records and other information that can be relevant to the complaint.

Both the aggrieved party and the guilty party can be called for a meeting for fact clarification and settlement plans. If the issue cannot be resolved within the meeting frame, the Wage & Hour Division will provide a wage determination that can be appealed by the prevailing wage contractor. Filing a complaint is free of charge.

Who is a contracting agent and what are his/her responsibilities?
A contracting agent is a person or an organization authorized to enter into a state project contract that is partly or fully subsidized by the state. The contracting agent is responsible for the request of prevailing wage rates for all classifications, the request of a re-determination rate if the contract has not started after 90 days, the inclusion of a copy of the prevailing wage rates in the contract, and the inclusion of the payment of the prevailing wage rate in the contract.

ARCHER JORDAN CAN HELP YOUR COMPANY COMPLY WITH MICHIGAN PREVAILING WAGE LAW

ARCHER JORDAN has years of experience when it comes to providing valuable information in government contracting businesses. Let us help you understand how you can work within the bounds of the law, and how you can use it to your advantage. Contact us now for inquiries!