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As discussed in our previous article, the Prevailing Wage Act, 2023 PA 10 ("Act"), became effective in Michigan on February 13, 2024, applying to certain state-funded projects with a bid acceptance date, on or after that date. As an update to the Act, on July 23, 2024, Senate Bill 571 ("SB 571" or the "Amendment") was signed into law, adding registration and certification requirements, as well as the inclusion of both public and private energy facility projects, with applicable steps summarized in our most recent update.
According to the Amendment, and starting no later than April 2, 2026, the required method for submitting certified payroll records is changing from transmittal to the contracting agent, to a requirement for online submission at the following link.
I. Logistics
Since the enactment of the Amendment and on qualifying state projects, contractors have been required to transmit their certified payroll records to the contracting agent within 10 days of the end of the pay period. However, starting no later than April 2, 2026, certified payroll records will need to be submitted online within the same timeframe.
There is an exception within the Amendment not requiring a contractor or subcontractor to submit certified payroll records if either: (a) the contractor or subcontractor performs work on a state project and is otherwise required by law to transmit certified payroll records to the state transportation department, or (b) the contractor or subcontractor performs work on an energy facility project that is solely routine maintenance or repair.
For clarification and more information, the Department of Labor and Economic Opportunity ("MDLEO") website contains links for registration, certification, and rates. Additionally, the MDLEO Wage and Hour Division encourages industry feedback and questions through email at WHPWRequest@michigan.gov or WHInfo@michigan.gov, by calling (517) 284-7800, or by submitting a question here.
II. Potential Penalties
Regarding enforcement, a contractor or subcontractor shall not submit a certified payroll record as required under this section if the contractor or subcontractor knows that the certified payroll record contains a false statement. A person who violates any portion the Act is also subject to a civil fine of not more than $5,000. Additionally, MDLEO may suspend or revoke a contractor's state project registration if the contractor significantly or repeatedly violates the Act or another law. However, the Act requires MDLEO to establish and implement procedural rules before suspending or revoking a contractor's state registration, which rules do not appear to have been created yet.
Given the constant ever-evolving nature of the Act and Amendment, proper guidance from a knowledgeable professional can help contractors reduce risks and potential penalties when navigating Prevailing Wage issues. If you have any questions on the application of the Act to your project, consult your attorney or anyone in Clark Hill's Construction, Education, Environmental & Natural Resources, or Labor and Employment practice groups.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
