The Building Tradesman Newspaper

Friday, July 07, 2000

Prevailing wage language not open to interpretation appeals court says

By Marty Mulcahy, Editor

There may not be any money or state personnel assigned to enforce Michigan's Prevailing Wage Act, but for now at least, no one can mess with the letter of the law.

That's the outcome of a Michigan Court of Appeals ruling last month that firmly established wage and benefit levels set by the Prevailing Wage Act. By a 3-0 vote, the appellate court affirmed that the prevailing wage for state-sponsored construction work must mirror wages paid in local collective bargaining agreements.

"The good thing about this case is that it doesn't give the Michigan Department of Consumer and Industry Services the discretion to establish a prevailing wage that's different from local collective bargaining agreements," said Michigan Building Trades Council attorney John Canzano, who litigated the case.

From the time the law was established in 1966, until 1994, nothing much changed about the interpretation or enforcement of the state prevailing wage law. In 1994, the Department of Consumer and Industry Services changed its policy toward the law.

For example, instead of requiring contractors on state-funded projects to pay double-time for holiday work, as some collective bargaining contracts require, the state said contractors need only pay time-and-a-half for all overtime.

Worse, Canzano said, is that the state decreed that wage rates paid to workers do not need to include collectively bargained check-off payments to apprenticeship programs. Also excluded by the state were contributions for labor-management cooperation committees and supplemental unemployment benefits.

Shortly after the state instituted its new policy, the Michigan Building Trades Council asked for, and received, an injunction to prevent the policy's implementation from Wayne County Circuit Court Judge James Rashid. He ordered the state to reinstate the old prevailing wage policy.

The state Department of Consumer and Industry Services then took the case to the Michigan Court of Appeals, which ruled 3-0 last month that under the "plain language" of the Prevailing Wage Act, the state had no discretion to define wages and fringes independently.

"The language in the law is very clear, it requires the use of prevailing wage rates that are in accordance with collective bargaining agreements, " Canzano said. "And the court's ruling reflected that very clearly; the state was wrong."

The state Department of Consumer and Industry Services may appeal the case to the Michigan Supreme Court.

In our last edition, we detailed how the state Prevailing Wage Act has endured countless, withering political attacks, but has survived - although its effectiveness is greatly diminished because of almost a total lack of enforcement by the state.