In 1965, the Michigan legislature enacted a law requiring contractors to pay workers engaged in state-funded construction projects the “prevailing wage rate” for their trade or occupation. The law was repealed in 2018; however, this March, Governor Whitmer signed a bill reinstating the prevailing wage law.
The law applies to all construction projects funded by the state. Prevailing wage rates must be paid for all hours worked including overtime. The “prevailing wage rates” are established by the Michigan Department of Labor and Economic Opportunity and are roughly commensurate with union wages.
Proponents argue that the reinstated law helps to ensure that workers receive a fair wage equal to pay for similar work in the same geographical area. Opponents insist that the law will result in increased costs for construction projects – at the expense of taxpayers.
Contractors and subcontractors who fail to comply with Michigan's prevailing wage law can face penalties, including fines and the loss of their contractor's license. Workers who believe they have been underpaid can file a complaint with the Michigan Department of Labor and Economic Opportunity, which is authorized to investigate and pursue enforcement action.
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