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Prevailing Wage for DTMB Construction Contracts
Prevailing Wage for DTMB Construction Contracts
Beginning March 1, 2022, the State of Michigan will require state contractors and subcontractors to pay prevailing wage on construction-based contracts issued by the Department of Technology, Management & Budget. These changes do not impact or change any provisions in place to comply with the Federal Davis-Bacon act.
Administrative Guide Citation - Effective March 1, 2022
1.3.13 Prevailing Wage
With the exception of lease build-outs, if a project greater than $50,000 involves employing construction mechanics (e.g., asbestos, hazardous material handling, boilermaker, carpenter, cement mason, electrician, office reconstruction and installation, laborer including cleaning debris, scraping floors, or sweeping floors in construction areas, etc.) and is sponsored or financed in whole or in part by State funds, state contractors must pay prevailing wage.
Additional information on the requirements of prevailing wage can be found on the Labor and Economic Opportunity - Bureau of Employment Relations - Wage and Hour Division website.
State-funded Project Prevailing Wage Requirements - Effective March 1, 2022
- The Contractor (and its Subcontractors) represents and warrants that it pays all mechanics and laborers employed directly on the site of the work, unconditionally and at least once a week, and without subsequent deduction or rebate on any account, the full amounts accrued at time of payment, computed at wage rates not less than those stated in the advertised specifications as prevailing wages based on locality, regardless of any contractual relationship which may be alleged to exist between the Contractor or subcontractor and the laborers and mechanics.
- The Contractor represents and warrants that Contractor will post the scale of wages to be paid in a prominent and easily accessible place at the site of the work.
Frequently Asked Questions
Q: Why is Michigan requiring prevailing wage rates for construction projects?
A: Prevailing wage rates are shown to support working people by ensuring that jobs created are well paid. Prevailing wage rates also support local employers by ensuring that all qualified bids received are competitive with area labor standards so local employers and workers are not underbid by low wage employers.
Q: How are Michigan’s prevailing wage rates established?
A: Rates are established for each County in Michigan through a process of submission and review of established wages, benefits, and training investments from bona fide employee and employer organizations. The establishment of rates drills down to the smallest locality possible, so in some cases may be established for specific townships or cities as well. Further questions can be sent to WHINFO@michigan.gov.
Q: Do the established rates apply to any State or publicly funded construction projects?
A: The state of Michigan has made a change to procurement policy that requires vendors to pay prevailing wages on construction-based contracts issued by the Department of Technology, Management & Budget. If other entities apply prevailing wage rates to their projects they can visit Prevailing Wage page on the Labor & Economic Opportunity site for the most recent wage rate schedule.
Q: Don’t prevailing wage rates increase the cost to the state for these projects?
A: Independent studies from organizations such as the Midwest Economic Policy Institute suggest have been conducted on the impact of prevailing wage rates in both Federal and other State contracts and no discernable cost savings are found when prevailing wages are eliminated.
Q: How do prevailing wages help workers?
A: Because prevailing wage rates are established based on local wages, fringe benefits, and training investments, prevailing wage ensures that all workers are paid according to local standards. Ensuring that workers are receiving strong wages and other benefits supports our local communities and enhances our ability to attract and retain critical workers in these industries.
Q: What is DTMB’s policy?
A: DTMB will require prevailing wages to be paid in all construction-related contracts initially posted for bidding after March 1, 2022.
Q: What projects will be required to pay DTMB prevailing wage rates?
A: All construction-related projects initially posted for bidding after March 1, 2022. Any contract requiring prevailing wage will have that information clearly explained in the bidding documents so all potential vendors are aware when developing and submitting bids.
Q: When will this take effect?
A: All construction contracts initially posted for bidding after March 1, 2022 will require prevailing wage.
Q: What will be the penalties if a business does not comply with the DTMB contract requirements
A: Failure to pay prevailing wage would be a breach of contract and may result in contract termination.
Q: How can I find out if a DTMB contract requires prevailing wage?A: Contracts requiring prevailing wage will include wage schedules and prevailing wage language in the bid documents. Further questions can be sent to email@example.com.
Q: I am a worker on a State of Michigan construction project, how will I know if prevailing wages are required, and how will I know what the prevailing wage is if required?
A: Employers on covered projects will be required to notify workers of the prevailing wage obligation as well as the rates. Further, the rates must be posted on the project in a place that can be viewed by workers.
Q: Who can file a complaint, and how is a complaint filed?
A: A complaint may be filed by a person working on the project as well as by a third party on behalf of the worker. Complaints may be sent to WHINFO@michigan.gov.
Q: How long do I have to file a complaint?
A: Workers or third parties should file a complaint as soon as they become aware of the potential violation. Further, complaints are best filed while the project is in progress and still under contract.
Q: What happens if an employer is found to be in violation?
A: Following a complaint and investigation, Wage & Hour will send the determination to DTMB who may then pursue the issue under the terms of the contract.