What is the prevailing wage?

Michigan's prevailing wage is an established rate to be paid construction workers on state projects.  The purpose of establishing prevailing rates is to provide minimum rates of pay that must be paid to workers on construction projects for which the state or a school district is the contracting agent and which is financed or financially supported by the state.  The prevailing rates provide an hourly wage and fringe benefit totals.  The prevailing wage is satisfied when wages plus fringe benefits paid to a worker are equal to or greater than the required rate.


Who establishes the prevailing wage?

Michigan's prevailing wage law (Act 166, P.A. of 1965) requires the Department of Labor & Economic Growth to establish prevailing wage and fringe benefit rates for construction workers on state financed or sponsored projects for which a state agency, university, community college or school district is the contracting agent.


What is a State project?

State projects include new construction, alteration, repair, installations, painting, decorating, completion, demolition, conditioning, reconditioning, or improvement of public buildings, schools, public works projects, bridges, highways or roads authorized by a contracting agent.


What is a covered project?

A covered project must be these requirements:

  • Be a state project authorized by a contracting agent;
  • Require or involve the employment of construction workers;
  • Be sponsored or financed in whole or part by the state;
  • Have a contract entered into pursuant to advertisement and invitation to bid;
  • And, require in the contract the payment of prevailing wage rates.


Who is a contracting agent?

Any officer, school board or commission of the state, state university, or a state institution supported in whole or in part by state funds, authorized to enter into a contract for a state project or to perform a state project by the direct employment of labor.


Responsibilities of a contractor:

  • Every contractor and subcontractor shall keep posted on the construction site, in a conspicuous place, a copy of all prevailing wage and fringe benefit rates prescribed in the contract.
  • Every contractor and subcontractor shall keep an accurate record showing the name and occupation of and the actual wages and benefits paid to each construction mechanic employed by him in connection with said contract. This record shall be available for reasonable inspection by the contracting agent or the department.
  • Each contractor or subcontractor is separately liable for payment of prevailing rates that are not paid by a subcontractor.
  • A construction mechanic shall only be paid the apprentice rate if registered with the United States Department of Labor, Office of Apprenticeship and the rate is included in the contract.


*The prevailing wage law gives contracting agents the authority to terminate a contractor's right to continue working on the project, if the contractor fails to pay the prevailing rates.


Violators' list posted:

The Wage & Hour Division posts on its website a listing of those who have violated the state's prevailing wage law. The listing includes the names and addresses of contractors and subcontractors who have been found in violation of the Act based on complaints from individuals and third parties.  To view the violators' lists go to www.michigan.gov/wagehour, hit "Prevailing Wage", then hit "Prevailing Wage Act Violators List", scroll to the bottom of the page and then hit "Prevailing Wage Act Violators List" again.  You will find listed three types of contractor violations whose cases have been closed because they:

  • Failed to provide information in the investigation
  • Refused to pay their employees the money owed to them
  • Paid their employees the money owed to them


How to file a complaint

A construction worker or interested party, (known as a third party) who believes the prevailing rate has not been paid, may file a complaint with the Wage & Hour Division.  Complaint forms can be found at Wage & Hour's website.  It may be best to have a third party (usually a labor union) file in your behalf to avoid your name being disclosed.  The person who files the complaint MUST sign the complaint form.  The employer will receive a copy of the complaint form from the Division.  Some employees have been discriminated against or terminated once their employer found out who filed the alleged complaint against them.  A third party can assist you in filing the complaint and can best keep the employee anonymous.