Michigan Prevailing Wage Act: New registration and certification requirements for private energy and state funded projects

As discussed in our most recent installment, on July 23, 2024, Senate Bill 571 (the “Amendment”) was signed into law, adding certain private energy facility projects to the purview of the Michigan Prevailing Wage Act which only previously applied to state-funded projects, adding a registration process, and laying the groundwork for updates to payroll certification. The changes became effective on April 2.

As set out in our first article, the Michigan Prevailing Wage Act became effective on Feb. 13, 2024, applying to contractors and subcontractors who employ construction mechanics/laborers on state projects (unless controlled by the Davis-Bacon Act) with a bid acceptance date, on or after the effective date. Now, the state has developed new processes for administering the Act, including online registration for both contractors and subcontractors and a required $500 annual registration fee, future certified payroll links, and an unofficial database for statewide rates. It is important to stay current on this ever-evolving process.

SB 571 – Amending the Michigan Prevailing Wage Act

Now effective under the Amendment, a “state project” is defined as either:

1. New construction, alteration, repair, installation, painting, decorating, completion, demolition, conditioning, reconditioning, or improvement of public buildings, schools, works, bridges, highways, or roads that are both:
   1. Authorized by a public contracting agent, and
   2. Sponsored or financed in whole or in part by this state.
2. Or, an energy facility project.

The Addition of Private Energy Facility Projects to “State Projects” Under the Act

Under the recently effective Amendment, “energy facilities” are defined to include energy storage facilities, solar energy facilities, and wind energy facilities (all generally with a nameplate capacity of 2 megawatts or more), but to exclude fossil fuel storage and power-to-gas storage that directly uses fossil fuel inputs. Under this definition, even private facilities can be defined as energy facilities to qualify under the Act. An energy facility may be located on more than one parcel of property, including fragmented parcels that share a single point of interconnection to the power grid.

MDLEO Registration Required

To obtain a state project registration or renew an existing registration, a contractor and its subcontractors must submit an application to the Department of Labor and Economic Opportunity (“MDLEO”), to the new link here, along with a $500 annual fee. A contractor’s application must include its: name, address (including the in-state records custodian, if applicable), phone number, type of legal entity, members with a financial interest in the company, tax identification number, unemployment insurance identification number, and a statement with documentary support that the contractor is compliant with all applicable laws. There currently is no public database of registered contractors/subcontractors and the process is expected to be updated throughout the coming year.

Importantly, without a state project registration, a contractor/subcontractor may not submit or be listed on a bid, enter an agreement, or perform work on a state project. If in violation of the Act, the contractor and subcontractor may be held jointly and severally liable.

Bidding Questions

While there has been some confusion regarding rates included in RFPs, 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, prior to bid acceptance.

Online Certified Payroll Transmittals

Currently for qualifying state projects, contractors must transmit their certified payroll records to the contracting agent within 10 days of the end of the pay period. However, starting April 2, 2026, certified payroll records will need to be submitted online. Note, the contracting agent is the current submission method.

The database for unofficial rates by county is located at the bottom of the MDLEO website.

Potential Penalties

A person who violates the Act is also subject to a civil fine of not more than $5,000. 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.

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.

This publication is intended for general informational purposes only and does not constitute legal advice or a solicitation to provide legal services.  The information in this publication is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional legal counsel.  The views and opinions expressed herein represent those of the individual author only and are not necessarily the views of Clark Hill PLC.  Although we attempt to ensure that postings on our website are complete, accurate, and up to date, we assume no responsibility for their completeness, accuracy, or timeliness.