LANSING – Should state law trump local law when it comes to governments setting prevailing and minimum wages, sick time rules or other employee benefits?
Among Michigan's ruling Republican lawmakers, the answer is yes. That's the basic philosophy behind House Bill 4052, which bounced around the state Legislature during the last month before it was approved June 17 by both the House and Senate and was headed for the likely signature of Gov. Snyder.
For the building trades, the most important takeaway to this legislation is that some last-minute changes to the law keep local prevailing wage laws in place, at least temporarily, in 18-20 communities. Originally, the new law would have retroactively killed prevailing wage laws in those communities, but there's speculation that Snyder wanted them saved. However, the new law prohibits local communities from enacting their own prevailing wage laws or other rules outside of state law going forward from Dec. 31, 2014.
The legislation enacts the "Local Government Labor Regulatory Limitation Act." According to the legislation, it would "prohibit a local governmental body from adopting, enforcing, or administering an ordinance, policy, or resolution that imposed certain requirements or regulations on an employer, including a requirement to pay more than the minimum hourly wage, provide paid or unpaid leave time, or provide benefits that imposed a cost on the employer, or that regulated the employment relationship in a way that exceeded State or federal requirements."
Proponents say HB 4052 would remove the "patchwork" of laws in various localities around the state. "It is a bill that would make employment rules in Michigan clear," said its sponsor, state Rep. Earl Poleski (R-Jackson). The bill was adopted mostly along party lines, with the GOP overwhelmingly in support.
Opponents, including labor leaders, say the bill undermines local control and could have unintended consequences down the road. The bill is reminiscent of the GOP-backed law in 2011 which bans local governments from entering into construction project labor agreements on taxpayer-funded projects.
“This is blatant power grab by Lansing Republicans, plain and simple,” said Michigan AFL-CIO President Ron Bieber. “House Bill 4052 will take away local control of schools, and make it harder to ensure local jobs go to local workers. While Republicans say they want smaller government, this bill actually takes power away from our local communities, and hands it over to politicians and special interests in Lansing."
Added state Sen. Rebekah Warren (D-Ann Arbor): "Perhaps the most insulting thing about this legislation is that it deigns to suggest that those of us in this room know what is best for diverse communities across the state."
The new law imposes a one-size-fits-all approach on the lawmaking abilities of all local units of government in Michigan. Going forward local lawmakers will be unable to adopt ordinances in areas like local prevailing wage and living wage, sick day allowances, non-discrimination, and local contractor and local worker hiring preferences.
Rep. Robert VerHeulen, R-Walker, told the Detroit Free Press, "certain things have to be controlled at the state level. We need regulations that are simple, uniform and easy to understand," he said. "What company is going to decide to invest in a town if four members of a city council or township board control wage and benefit levels."
The bill was adopted by the state House, then saw changes in the state Senate that addressed concerns of local government leaders. According to MIRS News Service, changes included refining the definition of employer, regulating only the employment relationship between businesses and employees, and clarifying that the bill does not apply to hours of operation limitations. At least one local leader still was not happy.
“Cities like Jackson need the freedom and flexibility to adopt policies that create good jobs for local workers that pay fair wages,” said Jackson Mayor Jason Smith. “Unfortunately, this bill guts local control, and makes it harder for local communities to pass ordinances that protect working families and small businesses. The Legislature should reject this shortsighted bill, and if it reaches his desk, Gov. Snyder should veto it to protect local control.”
As the statewide Michigan Prevailing Wage Act is currently threatened with a repeal by a petition drive, those 18-20 local prevailing wage laws are by no means safe, either.
A court case is currently pending before the Michigan Supreme Court - Associated Builders and Contractors vs. the City of Lansing - which seeks to end the ability of local municipalities to adopt prevailing wage laws. In May 2014, a state appeals court ruled against the ABC, which maintained that the regulation of third party wage and benefit rates "is a matter of state, not municipal concern." If the Supremes rule in the ABC's favor, local prevailing wage laws would be wiped out anyway, without legislative input.