Contractors warn prevailing-wage implementation is driving bid risk; LEO says rulemaking and education underway

LANSING — Contractors told the House Appropriations Subcommittee on Labor and Economic Opportunity that uncertainty in Michigan's prevailing-wage implementation, combined with steep penalties and data-privacy risks, is discouraging many firms from bidding on public projects.

"Prevailing wage is the law," said Shane Hernandez, president of Associated Builders and Contractors of Michigan, testifying to the committee. "But ... our members who are nonunion — who are 80% of Michigan's construction industry — are not comfortable bidding projects that are prevailing wage" because of perceived legal and administrative risk.

The concern centers on several features of the new state law, including an extensive rate schedule, the absence of finalized administrative rules, a preregistration requirement that contractors say collects sensitive employee data, and a statutory enforcement structure that industry witnesses described as heavily penalty-oriented.

Hernandez and Jeff Toyer, an attorney with Foster Swift who represents ABC members, told lawmakers the official rate schedule equates to roughly 14,150 pages of classifications and that the absence of clear administrative rules leaves contractors unclear about issues such as how to calculate fringe-benefit equivalents. "I could file an anonymous complaint on everybody,"…