Prevailing Wage Requirements in Michigan: Government Contract Rules

Federal prevailing wage laws, primarily the Davis-Bacon Act (40 U.S.C. § 3141 et seq.) and the Service Contract Act (41 U.S.C. § 6701 et seq.), require contractors on federally funded or assisted construction projects to pay workers predetermined wage rates. The Davis-Bacon Act applies to federal construction projects exceeding $2,000 and requires contractors to pay laborers and mechanics not less than the wage rate determined by the U.S. Department of Labor for the relevant locality and trade.

Federal prevailing wage rates include base hourly wages and fringe benefits for health and welfare, pension, vacation, and apprenticeship training. The U.S. Department of Labor Wage and Hour Division enforces federal prevailing wage requirements. Covered employers must post wage determinations, maintain accurate payroll records showing worker classifications, hours worked, and wage rates paid, and submit certified payrolls to the contracting agency. Violations expose contractors to back wage liability, liquidated damages, debarment from future federal contracts, and civil penalties. Federal law preempts state law where a project receives any federal funding or assistance.

Michigan's Prevailing Wage Act, MCL 408.551 et seq., applies to all public works projects in the state exceeding $35,000, regardless of federal funding. The state law is broader than the Davis-Bacon Act in that it covers state and local public projects, not just federally funded work. The Act applies to construction, demolition, and repair work on any building or structure owned by the state, a school district, county, city, village, township, or other public entity.

Under MCL 408.556, prevailing wage rates are set by the Michigan Department of Labor and Economic Opportunity (MDLEW) based on collective bargaining agreements or, if none exist, on the union scale for the trade in that county. Rates include base wages and fringe benefits covering health and welfare, pension, apprenticeship training, and other benefits. Prevailing wage applies to all workers on the project, including laborers, mechanics, apprentices, and helpers. The wage rate is based on the worker's classification and the county where the work is performed.

Michigan law covers all contractors, subcontractors, and suppliers on qualifying public works projects. Unlike federal law, Michigan's prevailing wage requirement applies to all public projects over $35,000 without regard to federal funding. State law does not recognize exemptions for certain contract types; any public works contract over the threshold must include prevailing wage requirements. Contractors must obtain prevailing wage rates from MDLEW, post rates on job sites, track worker classifications and hours, and submit certified payrolls to the public entity. Remedies under state law include back wage liability, liquidated damages, civil penalties up to $5,000 per violation (MCL 408.562), and the right for workers to sue employers directly for unpaid prevailing wages. The state prevailing wage also applies to public works projects that mix state and federal funding.

Michigan's prevailing wage law contains limited exceptions. Maintenance work on buildings and structures is exempt if it does not include any construction, alteration, or repair exceeding $35,000 in a single year. Emergency repairs necessary to protect public property may be exempt if performed without public bid, though this exemption is narrowly construed. The prevailing wage requirement does not apply to private construction projects, even if they are substantially funded by public money, unless the project is owned by and constructed for a public entity.

Projectsor subcontractors performing work that is incidental or immaterial to the main project may be exempt if their work does not constitute a trade subject to prevailing wage rates. However, this exception is interpreted narrowly; suppliers and workers performing recognized skilled trades (electricians, carpenters, plumbers, etc.) remain covered. Employers cannot avoid prevailing wage by misclassifying workers as independent contractors; the statute applies to all workers regardless of classification. Union workers employed under collective bargaining agreements that exceed the state-set prevailing wage rate are subject to the higher union rate. Failure to comply with prevailing wage requirements is not excused by lack of knowledge, market competition, or financial hardship.

Step 1: Document and Preserve Evidence. Keep detailed records of all work performed on the public works project, including worker names, classifications (e.g., carpenter, electrician, laborer), hours worked daily, dates, and wages paid. Retain payroll stubs, time sheets, and any communications about wage rates or fringe benefits. If you suspect prevailing wage violations, photograph or record the job site posting of required wage rates and note the contractor name and project details. Save email communications, bid documents, and prevailing wage determinations provided by MDLEW.

Step 2: File an Internal Complaint. Before filing with the state, attempt to resolve the issue with your employer or the project manager. Document the conversation in writing (email is best) by stating the specific prevailing wage rate applicable to your position, the hours you worked, and the shortfall between what you were paid and what you should have been paid. Request that your employer correct the wage and pay back wages. Keep copies of all correspondence. If your employer denies wrongdoing or fails to respond within 10 business days, proceed to state filing.

Step 3: File a Complaint with Michigan DLEW. Contact the Michigan Department of Labor and Economic Opportunity's Wage and Hour Division at (517) 373-7519 or file online at michigan.gov/leo. You do not need an attorney to file. Provide your name, contact information, employer name, project name and location, your job classification, dates of employment, wage rates you were promised versus what you received, and copies of any payroll records. There is no filing deadline; you can file while still employed or after termination. Include detailed information about how much prevailing wage was owed versus paid.

Step 4: Investigation Process and Expectations. MDLEW will open an investigation and contact the contractor for payroll records and prevailing wage documentation. The agency investigates without cost to you. The investigation typically takes 30–90 days depending on complexity. MDLEW will verify the correct prevailing wage rate for your classification and county, examine all payroll records, and calculate any shortfall. If a violation is found, MDLEW will demand back wages from the contractor. You will be notified of the outcome. If the contractor disputes the findings, the case may proceed to administrative hearing or civil court.

Step 5: Consult an Attorney if Necessary. If MDLEW denies your complaint or the contractor appeals, consult an employment or labor law attorney licensed in Michigan. Many wage violation attorneys work on contingency for prevailing wage cases. You also have the right to sue your employer directly in circuit court for unpaid prevailing wages under MCL 408.551 et seq. An attorney can file a civil lawsuit on your behalf seeking back wages, liquidated damages (an equal amount on top of back wages), attorney fees, and costs. Lawsuits must be filed within the applicable statute of limitations (generally within 6 years for written contracts or 3 years for oral agreements).