This is first in a series of articles about the fair enforcement of Michigan's Prevailing Wage Act of 1965. It talks about improvements in the complaint and prevailing wage interpretation process - matters of vital importance to Michigan construction workers. (Editor)

By David Plawecki, Deputy Director
Michigan Department of Labor & Economic Growth

Since taking office in 2003, one of Gov. Jennifer Granholm's objectives has been to improve the health, safety and welfare of Michigan workers. To this end, the Michigan Department of Labor & Economic Growth has sought to strengthen enforcement of the state's Prevailing Wage Act and protect our skilled construction trades and responsible contractors.

Under the previous administration, Michigan's Prevailing Wage Act seemed to discourage complaints and encourage possible abuses. Today, the Prevailing Wage law is being reinvigorated, and Michigan's Wage & Hour Division is working with contractors and workers to ensure fair and equitable enforcement of the act.

Third parties can file complaints.

Under the previous administration, Michigan's Wage & Hour Division could only accept complaints about possible prevailing wage violations from individual workers. Understandably, workers might feel intimidated as there was nothing to prevent an employer from punishing the worker for registering a complaint. In addition, if a complaint was filed, the division would only check the complainant's wages and not those of same classification co-workers.

Today, the intimidation factor has been removed as third parties, such as unions and business agents, can now file complaints on behalf of the worker or workers. In addition, to ensure pay equity, the Wage & Hour Division can check the wages paid to an entire classification of workers at the job site and not just the one(s) filing the complaint.

Wages must be visibly posted.

In the past, there was little enforcement of rules requiring contractors to post for everyone to easily see the job classifications as well as the wages and fringe benefits paid to each job classification working at the job site. Consequently, workers would not necessarily know what they should be paid for the job they were hired to do, and in some cases, not even be aware that the job required prevailing wage.

Michigan's Prevailing Wage law requires contractors to conspicuously post the job classifications at the work site along with the wage and fringe benefit rates. Thus, everyone at the work site is assured they are being paid the correct wages and benefits for their jobs.

Apprentices must be apprentices.

It was possible under the last administration that an employer, in the extreme case, could say that everyone at a work site was an apprentice. The employer could then pay workers less than the prevailing wage. Unfortunately, there was no enforcement at the time to prevent such statements.

Today, Michigan's Wage & Hour Division has implemented a policy that all apprentices must be certified by the U.S. Department of Labor's Bureau of Apprenticeship Training (BAT). They must also carry an apprentice card and work under the direction of a journey worker. Uncertified apprentices must be paid at the higher journey-level wage.

Fringe benefit abuses.

Until now, a contractor could take all of a worker's fringe benefit costs, regardless of whether they were earned on the prevailing wage job or not, and allocate them to the prevailing wage job. Through such an allocation, the contractor would, in effect, avoid paying the full prevailing wage.

For example, suppose the worker spends 40 hours on a prevailing wage job and 40 hours on a non-prevailing wage job. An "avoidance" employer might count all 80 hours of fringe benefits in the 40 hours on the prevailing wage job. In effect, the contractor has inflated the fringe benefits on the prevailing wage to allow paying lower actual wages.

Now, fringe benefits hours must be prorated to the jobs in which they were earned. In addition, state Wage & Hour investigators are looking more carefully at fringe benefit payments when doing onsite audits of payroll records.

Other changes made to prevailing wage

The Granholm administration has made other Prevailing Wage improvements, as well.

• Truck drivers can now take into consideration their time on and off the project site, if they did more than merely unload the delivery.
• The ratio of apprentices to journey workers at a project site has been reduced, increasing the number of higher-paid journey workers on site.
• The definition of a foreperson has been more clearly defined. At a minimum, they must spend 40 percent of their daily duties in a supervisory capacity. The clear definition prevents a contractor from calling everyone at the job site a foreperson, allowing the contractor to pay less than the prevailing wage.

These changes protect workers and contractors by keeping the playing field level.