Project Labor agreement requirements, local labor regulation tweaks advance through Senate

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More than a year after the Senate Labor Committee sent a bill to repeal a ban on local project labor agreements to the floor for further consideration, members of the chamber have advanced the measure to the House, alongside a bill tweaking local government’s ability to regulate labor standards with their contractors and employees. 

While the project labor agreement effort — Senate Bill 170 — was initially packaged with a bill repealing the state’s preemption of local government control on labor standards, including their ability to set a higher-than-state minimum wage, a move supported by unions and some local government officials, the repeal was seemingly dropped in favor of Senate Bill 1173.

Senate Bill 1173 stops short of a full repeal of the preemption, instead granting local governments the ability to limit the hours and scheduling for employees working on projects subject to a project labor agreement, which are negotiated between construction unions and construction contractors to establish the terms and conditions of employment for a project. These types of agreements are intended to ensure timely completion of projects at or under budget. 

The bill also allows local governments to require higher-than-state minimum wage when providing prevailing wage as part of a project labor agreement. It would also allow local higher-than-state minimum wage requirements for employers who are contracted with, receive funding from, or are paid by bond revenue from a local government body, or a local body under the jurisdiction of another local government body. 

It also removes sections barring local governments from implementing regulations on prevailing wage, work stoppages and strikes; requiring educational apprenticeship programs; requiring employers to pay specific fringe benefits  and creating remedies for wage, hour, or benefit disputes.

“Simply put, local governments will be able to regulate employers who are in business with the local government and are benefiting from their taxpayer dollars,” said Sen. Jeremy Moss (D-Southfield), urging a yes vote on the bill. 

“Everybody is on the same page. Employers have a clear expectation and understanding when they accept taxpayer funding in that local community and local units of government will be able to invest in their local workforce and ensure their taxpayer dollars are spent how their community wants them to, responsibly and transparently,” Moss said. 

However, Republicans pushed back against both bills, with Sen. Roger Hauck (R-Mt. Pleasant) arguing the bill would worsen Michigan’s housing crisis by raising the costs to build homes and apartment buildings. 

While Senate Bill 1173 marks a narrower proposal than Senate Bill 171, Sen. Thomas Albert (R-Lowell) argued the bill could still create negative impacts for communities, including higher costs for taxpayer-funded projects, increased labor costs, and investors choosing to move their efforts elsewhere which Albert said would impact brownfield redevelopment and affordable housing efforts. 

However, Sen. Kristen McDonald Rivet (D-Bay City) noted that 60% of the jobs in Michigan pay less than $50,000 a year, ranking 37th in the nation for median income.

“This is the bill that starts to undo some really terrible policies that were crowned 12 years ago today when we passed Right to Work. So here we sit, no longer a Right to Work state. We have reinstated prevailing wage, and now we are bringing in a point where [we are] instituting policies that will bring workers wages up,” McDonald Rivet said. 

“People need higher wages, and if you work really hard in Michigan, the message we need to send is that that hard work is going to equal an opportunity to get to the middle class and stay there,” she said.

Albert similarly slammed Senate Bill 170, arguing the current law is designed to ensure neutrality and fairness in awarding of government construction projects, preventing discrimination against contractors who use or choose not to use union labor. 

“Government mandated project labor agreements would discourage competition from construction outfits that are not unionized — which is most of them. That includes many small companies and minority-owned companies,” Albert said, warning that this could also lead to higher project costs and lost opportunities for students in apprenticeship programs that are not directly tied to unions. 

Members voted along party lines 20-15 to approve both bills, with three Republican members excused. 

Aaron Pelo, the communications director of the Michigan AFL-CIO, said the federation was glad to see the bill advance from the Senate. 

“While the legislation is more narrow in scope than the full repeal we had initially pushed for, it will go a long way for construction workers and workers on projects that receive local public funding,” Pelo said.

“It’s a win for local governments who will have some restored flexibility to set prevailing wages and provide paid leave and other benefits in order to attract the workers they need on some of their most critical projects. And it’s a win for the workers who will benefit by the state government simply getting out of the way and restoring authority where it belongs – with local governments, workers, and their bargaining units,” Pelo said.