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Prevailing Wage

For Michigan Public Schools by Kalmin D. Smith, Ph.D.

The Michigan Department of Consumer and Industry Services' Wage and Hour Division is responsible for administering the Prevailing Wages on State Projects Act, 1965, P.A. 166. The law requires the Wage and Hour Division to establish prevailing wage rates to be paid on bona fide state construction projects and to issue rate schedules to contracting agents. Projects covered by the Act are those in which all of the following criteria apply:

(1) the project is financed in whole or in part by the state; (2) the contract is entered into pursuant to advertisement and invitation to bid; and, (3) the project involves the employment of construction mechanics.

The Act defines "contracting agent" as schools or state institutions supported in whole or in part by state funds and authorized to enter into a contract for a state project or to perform a state project by the direct employment of labor.

Before advertising for bids on a state project, a contracting agent must obtain from Wage and Hour a determination of the prevailing wage rates for all classes of construction mechanics called for in the contract. This "schedule is to be made a part of the specifications for the work to be performed, and must be printed on the bidding forms where the work is to be done by contract."

To assist contracting agents in meeting this requirement of the Act, the Wage and Hour Division maintains commercial rate schedules for each of Michigan's 83 counties. Each schedule contains over 90 classifications of construction mechanics. If additional classifications are required for a project, the contracting agents must contact the Wage and Hour Division to identify what classification is needed and request a wage and fringe benefit rate determination.

Occasionally the division receives a request for rates from the architect or construction manager. To meet the requirements of Act 166 and issue project related rates, the division may request that the architect or construction manager contact the school so that the school, as the contracting agent, can properly request project issued rates.

When additional classifications are needed, contracting agents should allow ample time for the division to obtain the additional rate information. The law requires the division to establish rates based upon information from collective bargaining agreements of construction mechanic trades.

Project related rates are issued for 90 days. If a contract is not awarded or construction not undertaken within 90 days of the rate issue date, the contracting agent must request another rate schedule from the division.

Contracting agents may obtain information or rate schedules by calling the Wage and Hour Division at (517) 322-1825. Rate schedules can be found on the Internet at: www.michigan.gov/cis

Dr. Kalmin Smith is Deputy Director of the Michigan Department of Consumer and Industry Services. He has over 25 years of experience in policy development and administration of labor law.