Tag: Michigan Court of Claims

Michigan Department of Technology, Management and Budget Prevailing Wage Policy Upheld by Court of Claims

On March 1, 2022, the State of Michigan began to require state contractors and subcontractors to pay prevailing wage on construction-based contracts issued by the Department of Technology, Management & Budget (“DTMB”).

The directive established the following guidelines for when the payment of a prevailing wage is required:

“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.”

According to the State of Michigan, prevailing wage 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.

In July, 2021, the Associated Builders and Contractors of Michigan (“ABC”) filed a lawsuit against the State of Michigan with a motion for preliminary injunction asking the Court to enjoin DTMB from requiring prevailing wages for state contracts.

ABC argued that Michigan cannot require the wage rate of its contractors because of the repeal of Michigan’s prevailing wage law in 2018.

In October, the Michigan Court of Claims sided with the state and ruled that DTMB did not violate the law when it implemented its prevailing wage policy. The court granted DTMB’s motion for summary disposition, resulting in the dismissal of the case.

ABC has appealed the ruling. For the time being, pending the outcome of the appeal, DTMB’s prevailing wage policy remains in effect for construction projects financed in whole or in part by State of Michigan funds. We will continue to keep you informed about new developments in this case.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

Aaron L. Davis is Vice President and Treasurer, and Chair of Fraser Trebilcock’s labor law practice. He has litigation experience in a diverse range of employment matters, including Title VII, the Age Discrimination Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act, and the Fair Labor Standards Act. You can reach him at adavis@fraserlawfirm.com or (517) 377-0822.

Five Stories that Matter in Michigan This Week – October 28, 2022

  1. Governor Whitmer Signs Bipartisan Election Bills

Governor Whitmer recently signed a package of election law bills which impact how clerks process ballots, including those coming from members of the military overseas. Michigan Public Act 195 permits clerks to pre-process absentee ballots two days prior to Election Day, changes requirements for ballot drop boxes to increase security, and requires clerks to more frequently review and update qualified voter files to remove dead voters. Public Act 196 allows military members serving overseas to submit ballots electronically.

Why it Matters: Polling shows that voters are highly energized and polarized leading up to the midterm elections. These laws are meant to address certain voting-related issues, such as ballot box integrity, that have led to controversy in the past. If you have questions about these bills, or election law issues in general, please contact a member of our election law team.

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  1. Department of Labor Issues New Proposed Rule on Independent Contractors 

The U.S. Department of Labor recently issued a Notice of Proposed Rulemaking that, if adopted, would change the standard for analyzing a worker’s classification as either an employee or independent contractor.

Why it Matters: Employee misclassification can result in severe financial consequences. Businesses and employers should remain diligent in analyzing their workers’ classifications. Learn more on the subject.

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  1. Michigan Court of Claims Rules in Prevailing Wage Policy Case

Judge Douglas Shapiro of the Michigan Court of Claims recently ruled in favor of the state’s Department of Technology, Management, and Budget (DTMB), when it implemented its prevailing wage policy. The Associated Builders and Contractors of Michigan (ABC) in July 2022 filed a preliminary injunction claiming that due to the 2018 repeal of Michigan’s prevailing wage law, that the state cannot require the wage rate, which the Court denied and agreed that DTMB did not violate separation of powers when implementing its prevailing wage policy.

Why it Matters: October 31 is the deadline for ABC to appeal the decision. If this decision stays, this signals changes to the way organizations do business with the state of Michigan. Learn more on DTMB’s prevailing wage.

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  1. New CRA Director Vows to Crack Down on Black Market Sales

This week, Brian Hanna, the Cannabis Regulatory Agency’s acting director, spoke to media and highlighted the agency’s focus on cracking down on cannabis that is continuing to illegally enter Michigan’s market.

Why it Matters: Though official numbers have not been confirmed, it is known that illicit cannabis is continuing to enter Michigan’s medical and adult-use cannabis markets, causing widespread effects on prices and profits for legal and law-abiding businesses.

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  1. State Court Administrative Office Proposes New Landlord-Tenant Rules

The State Court Administrative Office unveiled new proposed rules that if enacted, would alter the way eviction cases are handled for both landlords and tenants. Rules such as a requirement that tenants be served in person if a landlord wants an immediate default judgement, and the ability for tenants to get an automatic stay if they have applied for rental aid.

Why it Matters: If enacted, these rules would allow commercial and residential tenants more time to pay their landlords if they fall behind on payments, however landlords are against the new proposed rules as they believe it will make the process of finding new tenants more difficult.

Related Practice Groups and Professionals

Election Law | Garett Koger
Labor, Employment & Civil Rights | David Houston
Cannabis Law | Sean Gallagher
Real Estate | Jared Roberts