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Michigan lawmakers repeal right-to-work, revive prevailing wage

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The Detroit News | March 21, 2023
Beth LeBlanc & Craig Mauger

Lansing — The Democratic-led Michigan Legislature voted along party lines Tuesday on landmark legislation to restore prevailing wages for state construction projects and repeal the right-to-work law that barred union contracts from requiring membership fees as a condition of employment.

The Michigan Senate took a final vote on the bill to repeal the right-to-work law for private employers and sent the measure to Gov. Gretchen Whitmer’s desk on Tuesday afternoon. The Senate passed the bill 20-16 along party lines after the legislation cleared the House in a 56-52 party-line vote.

The House on Tuesday also approved two other labor bills in the package, one House bill that helps to require union-rate wages for public construction jobs and another bill that would repeal right-to-work for public sector employees.

The votes Tuesday were significant for the labor movement nationally, said Ron Bieber, president of the Michigan American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).

“It’s a huge day for the working people of Michigan,” Bieber said.

Rep. Regina Weiss, the Oak Park Democrat who sponsored the public sector right-to-work repeal, said the final passage of the bills Tuesday delivered on changes promised by the new Democratic majorities when they took office in January. Weiss rejected arguments that the right-to-work repeal would hurt the state’s economy.

“To me, it’s not a choice,” Weiss said. “You don’t have to choose to support business and then also choose to screw over workers. You can support business, you can support workers at the same time.”

The legislation headed to Whitmer’s desk would allow union contracts to require workers to pay agency fees for the cost of representation at the bargaining table with their employer.

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Michigan restores prevailing wage for state construction projects beginning Tuesday

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By: Ryan Jeltema
Mar 1, 2022

LANSING, Mich. (WJRT) – State construction projects must pay the prevailing wage beginning Tuesday.

Gov. Gretchen Whitmer reinstated prevailing wage for Michigan in October and the change officially took effect Tuesday. She said prevailing wage will increase pay for construction workers statewide.

“Reinstating prevailing wage for state construction projects puts working people first and helps us build high-quality, cost-effective infrastructure with the right mix and materials,” said Whitmer.

Prevailing wage must be paid on any construction project funded with state money, including road work, replacing lead water pipes, expanding high-speed internet service and installing electric vehicle charging stations.

“Good-paying jobs are the foundation of a strong middle class and state construction contracts must not be the exception,” Whitmer said.

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Gov. Whitmer to Reinstate Prevailing Wage for State Construction Projects

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FOR IMMEDIATE RELEASE
October 7, 2021
Contact: Press@Michigan.gov

Gov. Whitmer to Reinstate Prevailing Wage for State Construction Projects

State contractors and subcontractors required to pay prevailing wage, uplifting working people and ensuring Michigan has high-quality infrastructure

LANSING, Mich. - Today, Governor Gretchen Whitmer announced that the State of Michigan will require state contractors and subcontractors to pay prevailing wage for construction projects. The move reinstates the prevailing wage requirement, which was repealed in June 2018, and ensures that any construction worker working on a state construction project receives a fair wage. The governor is proud to lead by example at the state-level and deliver real change for working people in Michigan. 

“By reinstating prevailing wage, we are ensuring that working people get treated with dignity and respect, which starts with a fair wage,” said Governor Whitmer. “As governor, I am proud to stand shoulder to shoulder with working people and unions who built the middle class. By reinstating prevailing wage, we are ensuring working people can earn a decent standard of living, saving taxpayers money and time on crucial infrastructure projects, and offering Michigan a highly-trained workforce to rely on as we build up our roads and bridges, replace lead pipes, install high-speed internet, and more.” 

“We applaud Governor Whitmer’s decision to restore prevailing wage requirements on state projects.” said Tom Lutz, Executive Secretary-Treasurer of the Michigan Regional Council of Carpenters and Millwrights. “This decision protects Michigan’s investments in infrastructure because when prevailing wages are the expectation, contractors have to compete on a level playing field based on quality of their skilled work, not on the exploitation of their workers.” 

“The actions that have been taken today, help to restore confidence by workers and employers alike,” said Steve Claywell, President of the Michigan Building and Construction Trades Council. “The restoring of prevailing wage provides a fair and equal bidding process allowing for highly trained men and women to be paid a good wage. We appreciate the courage of this Governor and stand ready to build Michigan with her.” 

History of Prevailing Wage

Michigan’s prevailing wage was repealed by the Michigan legislature in June 2018. A total of 24 states have repealed their prevailing wage laws. Michigan’s repeal eliminated the state’s prevailing wage requirement, but left the door open for DTMB to require prevailing wage under its authority to develop the terms of state contracts. Governor Whitmer is proud to make that call and reinstate prevailing wage.

Today’s action rewards hard work and ensures working people can earn a decent standard of living, take care of their families, and have a secure retirement. By reinstating prevailing wage, Michigan can continue making progress on critical infrastructure, including roads, bridges, water infrastructure, high-speed internet, and more.

Budget

Last week, the governor signed the Fiscal Year 2022 budget bill that delivers on the kitchen-table fundamental issues that matter most to working families. The budget puts 167,000 Michiganders on a tuition-free path to higher-education or skills training through the Michigan Reconnect and Futures for Frontliners programs, expands low or no-cost childcare to 105,000 kids, repairs or replaces 100 bridges while creating 2,500 jobs, and more. …

(See Press Release)

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AG Nessel Joins Effort Urging Regulators To Protect Workers From Harmful Anticompetitive Labor Practices

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July 18, 2019 at 10:20 am

LANSING, Mich. – Michigan Attorney General Dana Nessel joined 17 other Attorneys General earlier this week in urging collaboration between Federal Trade Commission (FTC) regulators and state attorneys general to protect workers from anticompetitive labor practices that depress wages and limit job mobility and opportunities for advancement.

In a comment letter filed in connection with the FTC’s hearings on competition in the 21st Century, the coalition argues that the FTC should increase its focus on antitrust enforcement in labor markets and use their authority to crack down on non-compete and no-poach contract agreements-in addition to considering how workers are impacted by proposed mergers.

“In an era where wages continually decline and workers’ protections, like prevailing wage, are routinely stripped, we must begin reviving antitrust regulation in labor markets,” said Nessel. “We must do this to protect workers from harmful anticompetitive practices such as targeting low-income workers by forcing them to sign non-compete agreements and ultimately limiting their earning potential.”

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Michigan Legislature Considers Package of Bills Addressing Wage Theft, Independent Contractors, and Noncompetes (MI)

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The National Law Review
Friday, September 6, 2019

On August 29, 2019, legislators from the Michigan House of Representatives announced an ambitious package of 12 bills aimed at creating new criminal and civil penalties to combat employers that fail to properly pay wages and overtime pay. The legislation would also establish enhanced protections and penalties under Michigan’s whistleblower statute and create new civil remedies against employers for overzealous enforcement of noncompete agreements and for misclassifying employees as independent contractors.

Background

The bills’ highly publicized announcement, which was coordinated with local labor union leaders to occur just before the Labor Day holiday, aligns with Michigan Attorney General Dana Nessel’s Payroll Fraud Enforcement initiative. Nessel introduced the initiative in April 2019 when she created a payroll fraud hotline for reporting suspected violations of existing payroll and wage theft laws in effect in Michigan.

The new legislation would make employee-friendly modifications to several Michigan statutes, including the Payment of Wages and Fringe Benefits Act (PWFBA), the Whistleblowers’ Protection Act (WPA), the Michigan Antitrust Reform Act (MARA), and the Improved Workforce Opportunity Wage Act (IWOWA), and would amend the Michigan Code of Criminal Procedure to create a new felony offense for employers that commit a second or subsequent violation of certain provisions of the PWFBA.

Summary Analysis of the Bills

Below is a summary of the initial drafts of the ten House bills in the package that would have the most significant effect on private employers. It is important to note, however, that these are initial drafts of proposed legislation and are a long way from being enacted into law, especially given the current composition of the Michigan Legislature. However, the intense interest from the attorney general’s office and any changes in the makeup of the House and Senate could give the bills momentum.

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Final Thoughts

As Jimmy Stewart taught us all in his 1939 film Mr. Smith Goes to Washington, bills introduced on the legislative floor have a long way to go before they become law. To be sure, the potential for civil fines ranging from $5,000 to $10,000 per violation, mandatory assessment of attorneys and lost wages, and the possibility of felony criminal penalties make the legislative package something that will garner a lot of attention. Moreover, given the intense interest from the attorney general’s office and Michigan labor leaders, it is unlikely that the bills will die without significant debate and perhaps some provisions being passed into law.

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Gov. Whitmer Signs Executive Directive to Put Michigan Jobs First (MI)

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Posted: 9:39 PM, Jul 29, 2019
By: FOX 47 News

LANSING, Mich. – Today Governor Gretchen Whitmer signed the Michigan Jobs First executive directive at Lecom Utility Contractors in Roseville to revamp the State’s purchasing policies to ensure that the State awards contracts to companies that create good-paying jobs in Michigan and are good stewards of the state. Currently, only 70 percent of state contracts are awarded to in-state businesses.

“Michigan is home to the hardest working people and best businesses in the world, and our state should work to ensure that more of our Michigan tax dollars support Michigan workers and businesses at every opportunity,” Whitmer said. “We want Michigan to be a home for opportunity for everyone, which begins with supporting businesses that provide fair wages and good benefits. This executive directive will strengthen our commitment to these priorities and bring the greatest possible benefit to Michigan’s businesses, workers, and families.”

Executive Directive 2019-15 expands the list of factors used to determine whether a bid from a potential supplier would provide the best value to the state. Under this new directive, the state must also take into account the overall economic impact of the potential supplier’s bid on Michigan businesses and workers, the wages and benefits offered by the supplier to its workers, the supplier’s track record of labor and environmental compliance, and the supplier’s commitment to economically-disadvantaged zones.

In addition to expanding best value factors, the executive directive also ensures that Michigan businesses receive the full preference to which they are entitled under law when the State makes its purchasing decisions.

“Across Macomb County and the great state of Michigan, there are thousands of incredible businesses with innovative products and outstanding services,” said Macomb County Executive Mark A. Hackel. “It makes sense for the state to prioritize our homegrown job creators and I applaud this effort. Our business development team will engage Macomb County companies and take advantage of the Michigan Jobs First executive directive.”

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Sen. Gary Peters wants to hear from workers victimized by wage theft (MI)

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By Anne Runkle
August 5, 2019

U.S. Sen. Gary Peters (D-Michigan) wants to hear from workers who have been victims of wage theft.

Peters is conducting an investigation into wage theft practices, which could include:

  • Failure to pay the applicable minimum wage
  • Failure to compensate employees for overtime
  • Misclassifying employees as independent contractors to avoid paying certain benefits or taxes.

Peters, ranking member of the Senate Homeland Security and Governmental Affairs Committee, has directed the committee’s minority staff to conduct an investigation focused on these and other actions that prevent employees from receiving all of their pay.

If you have information to share regarding your personal experiences with wage theft, visit https://www.hsgac.senate.gov/contact/investigations.

“If you put in a hard day’s work, you deserve to get paid for it. Yet every day, workers in Michigan and across the country are denied wages or benefits they have earned on the job,” said Peters. “This investigation will help expose wage theft and develop ways to hold employers who break the rules accountable for actions that hurt hard-working families.”

Wage theft has serious financial consequences for workers and businesses, according to a release from Peters. The Economic Policy Institute estimates that American workers are shorted as much as $15 billion each year due to minimum wage law violations.

Michigan has the fifth highest total of unpaid earnings in the country due to minimum wage violations.

According to EPI, from 2013 to 2015, roughly $430 million in wages were improperly withheld from Michigan workers.

Misclassifying workers as “independent contractors” also negatively impacts taxpayers. According to the U.S. Department of the Treasury, millions of employers nationwide have failed to pay more than $45 billion in employment taxes.

These practices deprive the federal government of billions of dollars in unpaid employment taxes that are used to fund Social Security, Medicare and other benefits, according to the release.

In Michigan alone, a study released in 2008 found that Michigan loses tens of millions of dollars annually from improper classification practices – depriving the state of dollars for projects like highway and infrastructure upgrades, educational programs or public hospitals.

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Dana Nessel, in a nod to Michigan workers, creates payroll fraud unit (MI)

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April 22, 2019
Lindsay VanHulle

Attorney General Dana Nessel on Monday said she will step up investigations of Michigan companies that don’t pay full wages and benefits to their employees.

The announcement is in keeping with her campaign promise to protect workers and labor unions. The event featured a number of union workers and Democratic lawmakers, but no Republicans, the majority party in the state House and Senate.

Nessel, a Democrat, is creating a payroll fraud enforcement unit within the Attorney General’s office to investigate such claims as wage theft, lack of overtime pay and misclassifying workers as independent contractors rather than employees.

The unit will be led by Zachary Risk, an assistant state attorney general, and housed within the office’s labor division. It will coordinate with other state departments and agencies – for example, the Department of Licensing and Regulatory Affairs’ Wage and Hour Division, or the Unemployment Insurance Agency – to investigate complaints against companies.

“These are companies that fraudulently report employees as self-employed and independent contractors, or they’re paying workers under the table,” Nessel said during a news conference in Lansing to unveil the payroll fraud unit.

“They refuse to pay overtime, benefits, health insurance and workers’ compensation. And because they cheat on time cards to keep costs off the books, they’re not paying their taxes,” Nessel said. “The majority of Michigan companies play by the rules, but those who don’t are cheating the system, raking in unfair profits and hurting Michigan in the process.”

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Column: Payroll fraud robs workers of overtime pay and wages (MI)

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By Nate Shannon, Special to MediaNews Group
Apr 27, 201

Every year, unethical businesses are unfairly stealing from their own workers. These businesses misclassify their workers as “1099 Independent Contractors” to rob their workers of overtime pay. In Michigan, minimum wage workers have 27 percent of their wages stolen by their employers.

An analysis by the Economic Policy Institute estimates that Michigan workers were robbed of $429 million in stolen overtime wages between 2013 and 2015. More than 2.8 million Michigan workers were victims of this scam within that short timespan.

When workers are robbed of their wages, they’re more likely to end up in poverty. EPI estimates that one-third of cheated workers depend on public assistance programs to feed their families and pay the bills.

Recently, I joined my fellow legislators in introducing legislation to crack down on payroll and tax fraud to close any loopholes.

To tackle this crime, we must have enforcement with tougher penalties for businesses that take advantage of their employees.

An enforcement unit to investigate violations of wage and hourly laws has been proposed in Michigan by the Attorney General. This team will be made up of professionals from the AG’s office as well as, Michigan’s Occupational Safety and Health Administration, the state Department of Licensing and Regulatory Affairs, the Michigan State Police and other relevant departments. By bringing these departments together, we can better coordinate law enforcement activities and uphold fairness for our employees.

This is a critical piece of the puzzle to protect Michigan workers. I’m also joining my colleagues in co-sponsoring legislative proposals to address wage and overtime theft, by increasing punishments against lawbreakers. Additionally, we will be focusing on protecting those that speak out when they see these unfair practices in the workplace.

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Proposed Detroit ordinance could mandate 51% local hires for all city construction work (MI)

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By Kim Slowey
Sept. 20, 2018

Dive Brief:

  • At a Sept. 17 press conference, Detroit City Council President Pro Tem Mary Sheffield proposed a measure that would require all city-funded demolition and construction work to be performed by at least 51% city residents, the Detroit Free Press reported. The ordinance will be presented to the city council during the next few months as part of a package of “People’s Bills” aimed at helping Detroiters.
  • Sheffield told the Free Press that the push behind the construction-related measure was the revelation that local residents were not well represented in the city’s Land Bank demolition program, which funds the razing of blighted homes in Detroit. Of the $70 million spent on the initiative so far, more than 50% of the contracts have gone to suburban Detroit companies, 26% to minority firms and only 16% to African American-owned companies.
  • Detroit Mayor Mike Duggan instituted a similar program in 2014, but Sheffield’s proposal differs in that it would lower the current threshold of $3 million – at which hiring requirements kick in – to a lower, undetermined amount; include demolition projects; and impose expensive fines on companies that do not comply. The fines would go into a workforce training fund, though Sheffield maintains there are plenty of qualified Detroiters that simply have not been given work opportunities. Sheffield said her ordinance would pursue more rigorous enforcement and collection of fines, but Duggan’s office said they have been conscientious about going after violators.

Dive Insight:

Sheffield’s plan is similar to those instituted in other areas of the country, but at 51%, it’s higher than what is outlined in most other regulations, and many agencies forego fines and rely on contractors making their best efforts to comply.

The City of Sacramento is one of the latest municipalities to enact a local hiring law, the Local Hire and Community Workforce Training Program. The regulation, passed last month, requires that contractors use local workers when performing city-funded work valued at $1 million or more. The ordinance also requires that 20% of apprentices either live in an economically disadvantaged area or be a member of a special class – homeless, a woman, former offender, foster youth or recipient of public assistance.

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