On June 6, 2018, the Michigan Legislature changed their approach to payments for construction contractors working on government-sponsored contract. Act 166, passed in 1965, required that construction workers on state-funded projects be paid higher minimum wages than those employed in residential or commercial efforts. How does this change affect your Michigan builder's firm? Here are some things you should know about these recent legal changes.
- Current contracts are not included in the repeal. While agencies may attempt to renegotiate the terms of individual contracts, jobs in progress will continue to be paid at the previously agreed-upon wage.
- These changes are likely to make it even harder for Michigan builders to find experienced skilled tradesmen. Consider investing in on-the-job training and apprenticeship programs to secure the right help before the busy season begins.
- In order to retain qualified staff, builders should consider keeping wages at the same rate for active employees. Instead, save labor costs by offering new hires a lower starting rate.
- Use benefit packages to make up for decreased wages. Group health care, insurance, and even shopping discounts keep employees happy without making too much of a dent in profit margins.
- The Wage and Hour Division of the Michigan Department of Licensing and Regulatory Affairs will continue to accept claims for prevailing wage projects that were completed or begun before June 6, 2018. Other projects are no longer subject to compliance and reporting requirements.
- Federally-funded projects are not affected by these changes. However, projects that are financed through a combination of state and federal funding might be impacted. Find more information on the federal wage system here.
Information on any further changes or legal rulings related to the repeal of Act 166 will be posted on the Michigan Department of Licensing and Regulatory Affairs website