In Associated Builders and Contractors v. City of Lansing, Docket No. 149622, the Supreme Court of Michigan held that Lansing’s prevailing wage ordinance, which requires contractors working on city construction contracts to pay employees a prevailing wage, was constitutional. This overturned a Michigan case from 1923 which stated that cities do not have the right to dictate third party wages.
The Court held that the 1923 case was based on the state constitution of 1908, rather the constitution of 1963 currently in place. The 1963 constitution vested more power in the cities of Michigan, and with that power, those cities were allowed to demand that workers hired by contractors working on public projects be given union-rate wages.
In 2015, the legislature passed a bill which states that cities are no longer allowed to enact prevailing wage ordinances. However, cities are still allowed to keep ordinances in place which predated the bill. The prevailing wage ordinance in Lansing is one of such ordinances along with 30+ more communities in Michigan.
Michigan also maintains a statewide Prevailing Wage Act. However, this only applies to projects which are state-sponsored rather than municipally-sponsored. Contractors with questions regarding whether a public project falls under prevailing wage law should contact an employment attorney.
This article was written by law clerk, Tyler Kemper.
