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Prevailing Wage in Michigan: a Guide to Rules, Requirements, Rates, and More for 2025

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Discover Michigan’s 2025 prevailing wage rules, rates, and compliance tips to keep your projects fair and on track!

Kyo Zapanta

Last updated: November 16, 2024 10 min read

Prevailing wage laws play a crucial role in Michigan, especially in state-funded construction projects. These laws are essential for both employers and workers as they set wage standards, influence project costs, and ensure fair pay for skilled laborers. Understanding these laws can help businesses comply with state regulations and promote equitable compensation.

By the end of this guide, you should understand:

What Michigan’s prevailing wage laws cover
How prevailing wages are decided and why they’re fair for workers
How the state ensures businesses follow these rules

Understanding Prevailing Wage Laws in Michigan

Prevailing wage is the standard pay rate for workers doing specific jobs within a particular area. In Michigan, this rate is set to align with the local pay scale for similar roles. The Department of Labor and Economic Opportunity (DLEO) oversees prevailing wage determinations based on the type of work and project location.

The prevailing wage rates in Michigan are often derived from union agreements for comparable jobs, generally ensuring workers earn more than the minimum wage, thus reflecting their skills and experience.

The Legal Framework for Prevailing Wages in Michigan

Michigan’s prevailing wage laws are governed by the Prevailing Wage Act (Act 10 of 2023), which mirrors the intent of federal Davis-Bacon laws by extending wage protections to state-funded projects.

This act applies to various public works projects, including buildings, roads, and schools. It requires that contractors on these projects pay no less than the determined prevailing wage to ensure fair competition and skilled labor on state-funded initiatives.

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Understanding Michigan Prevailing Wage Laws

MCL – Act 10 of 2023

Michigans's Primary Prevailing Wage Law

Michigan’s prevailing wage laws are primarily governed by the Michigan Prevailing Wage Act (Act 10 of 2023). This legislation mandates that contractors on state-funded projects pay wages and benefits comparable to union-level rates for similar work in the project’s locality.

This law aims to ensure fair compensation and prevent undercutting labor costs, aligning with similar principles in the federal Davis-Bacon Act, which applies to federally funded projects

2023

When Did Michigan's Prevailing Wage Law Take Effect?

The latest version of Michigan’s prevailing wage law, Act 10, was signed into law in 2023 and took effect on February 13, 2024.

This recent enactment restored prevailing wage requirements originally established in 1965 by Act 166. These requirements were repealed in 2018, but the 2023 law demonstrates Michigan’s renewed commitment to fair labor standards in publicly funded projects

DLEO

The Department of Labor and Economic Opportunity (DLEO) is Responsible for Enforcing Prevailing Wage in Michigan

The Department of Labor and Economic Opportunity (DLEO) oversees prevailing wage compliance in Michigan. DLEO is responsible for setting and enforcing wage rates, investigating complaints, and ensuring contractors adhere to the mandated wage standards on state projects.

The department has the authority to take action against non-compliant contractors, protecting workers’ rights under Michigan labor laws.

$50,000

What's the Minimum Value of Projects Covered by Prevailing Wage Laws in Michigan?

Michigan’s prevailing wage laws cover state-funded construction projects with a minimum contract value of $50,000. This threshold applies to new construction, repair, and maintenance work, ensuring that substantial public investments reflect fair labor standards.

Exceptions may apply to certain projects or funding sources, depending on specific provisions within the law.

Michigan Prevailing Wages for Common Roles

$38.53
Laborer Base Wages (Statewide)

The base hourly wage for a laborer in Michigan engaged in building and heavy construction is set at $38.53. Laborers perform essential tasks across various construction settings, supporting skilled trades through site preparation, material handling, and general assistance.

$12.67
Laborer Fringe Benefits (Statewide)

Laborers covered by prevailing wages receive additional benefits totaling $12.67 per hour, comprising the following:

Health and Welfare: $4.05
Pension: $5.00
Vacation: $1.00
Holiday: $1.50
Training: $1.12

Total Prevailing Wage Hourly Rate: $51.20

$50.82
Carpenter Base Wages (Wayne County)

Carpenters in Wayne County earn a base rate of $50.82 per hour. This wage reflects their specialized skills in tasks like framework, finishing, and structural installations in residential and commercial projects.

$14.97
Carpenter Fringe Benefits (Wayne County)

Wayne County carpenters receive fringe benefits totaling $14.97 per hour, comprising:

Health and Welfare: $5.20
Pension: $6.00
Vacation: $1.37
Holiday: $1.20
Training: $1.20

Total Prevailing Wage Hourly Rate: $65.79

$72.47
Boilermaker Base Rate (Statewide)

Boilermakers in Michigan earn one of the highest base wages, starting at $72.47 per hour statewide. They are responsible for constructing, maintaining, and repairing boilers, which requires high skill and safety standards.

$35.08
Boilermaker Fringe Benefits (Statewide)

Boilermakers receive additional benefits totaling $35.08 per hour, which include:

Health and Welfare: $10.00
Pension: $15.00
Vacation: $3.00
Holiday: $4.58
Training: $2.50

Total Prevailing Wage Hourly Rate: $107.55

$43.08
Cement Mason Base Wages (Ingham County)

Cement masons in Ingham County earn a base wage of $43.08 per hour. Their work involves finishing concrete surfaces and setting forms, critical in building and infrastructure projects.

$11.56
Cement Mason Fringe Benefits (Ingham County)

Ingham County cement masons receive $11.56 per hour in fringe benefits, broken down as follows:

Health and Welfare: $3.50
Pension: $4.50
Vacation: $1.25
Holiday: $1.50
Training: $0.81

Total Prevailing Wage Hourly Rate: $54.64

$96.72
Elevator Constructor Base Rate (Statewide)

Elevator constructors have the highest prevailing wage in Michigan, with a base rate of $96.72 per hour. Their role involves installing and maintaining elevators and escalators, requiring technical expertise and adherence to strict safety protocols.

$55.85
Elevator Constructor Fringe Benefits (Statewide)

Elevator constructors receive $55.85 in fringe benefits per hour, which include:

Health and Welfare: $15.00
Pension: $25.00
Vacation: $5.00
Holiday: $6.85
Training: $4.00

Total Prevailing Wage Hourly Rate: $152.57

Michigan Prevailing Wage Resources

Don’t see the role you’re looking for on our list?

Michigan regularly updates prevailing wage rates for various roles throughout the state. You can find the most recent prevailing wage rates for all roles and locations on the Michigan Department of Labor and Economic Opportunity’s Prevailing Wage Determinations page:

Michigan Department of Labor and Economic Opportunity – Prevailing Wage Determinations Page

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Typical Fringe Benefits and Calculations

Health Insurance

Most roles covered by Michigan’s prevailing wage rates are eligible for health insurance benefits under the “Health and Welfare” category. This is often the largest component of a worker’s fringe benefits, ensuring access to essential healthcare.

For example, laborers receive $4.05 per hour for health benefits, significantly supporting their healthcare needs.

Dental Insurance

Dental insurance is generally included within the health and welfare fringe benefits. In Michigan, roles such as carpenters receive comprehensive health coverage, which includes dental benefits under the broader health provision.

Vision Insurance

Vision insurance is also part of the health and welfare fringe benefits for many roles. Workers such as boilermakers benefit from vision coverage within their health benefits package, promoting overall well-being.

Paid Time Off (PTO)

Most Michigan prevailing wage roles are eligible for PTO benefits, typically listed as “Vacation” or “Holiday” pay.

For instance, cement masons in Ingham County receive $1.25 per hour in vacation pay, which accumulates to provide paid leave days.

Vacation Days

In addition to PTO, vacation days are a standard fringe benefit for many roles.

For example, elevator constructors receive $5.00 per hour in vacation benefits, adding to their paid leave balance over time.

Tuition Reimbursement

Michigan prevailing wage rates often include a “Training” fringe benefit, functioning similarly to tuition reimbursement. This benefit covers costs associated with career development.

For example, elevator constructors receive $4.00 per hour for training.

Bonuses

Michigan’s prevailing wage guidelines do not cover bonuses as part of fringe benefits. Compensation structures focus on steady hourly wages and defined benefits, without provisions for additional performance-based bonuses.

Pension Contributions

Pension contributions are a significant part of Michigan’s fringe benefits.

For instance, boilermakers receive $15.00 per hour for their pension, providing them with substantial retirement savings.

401(k) Employer Contributions

Michigan’s prevailing wage laws focus on pension contributions rather than 401(k) plans. Workers in covered roles benefit from traditional pension plans rather than defined-contribution retirement accounts.

Life Insurance

Life insurance is available as a fringe benefit for certain roles under Michigan’s prevailing wage law. This benefit is typically calculated on a monthly premium basis.

For example, a life insurance premium of $27.04 per month translates to approximately $0.16 per hour for a standard 2,080-hour work year.

Accidental Death & Dismemberment (AD&D) Insurance

AD&D insurance is provided to workers in some roles, offering financial support in case of accidental death or severe injury. This coverage is typically included within the broader health and welfare fringe benefits package.

Sick Pay

Some roles may include sick pay as a fringe benefit under Michigan’s prevailing wage regulations. This benefit ensures workers can take paid time off when ill, promoting health and safety on the job site.

Holiday Pay

Holiday pay is a standard benefit for most prevailing wage roles in Michigan, separate from vacation pay.

For example, laborers may receive designated holiday pay rates, allowing them to receive compensation for specified holidays off from work.

Employer Responsibilities in Michigan

Employers must pay workers the DLEO-set prevailing wage rates for specific trades.
Employers must keep records of hours, wages, and benefits, subject to government review.
Certified payroll reports must be submitted to verify compliance with wage standards.
Employers must ensure subcontractors follow prevailing wage laws and keep accurate records.

Penalties for Prevailing Wage Noncompliance

Back Wages +
Failure to Pay Prevailing Wage

Employers who fail to pay the prevailing wage on state-funded projects in Michigan are required to provide back pay to affected workers. This includes the full amount of wages and fringe benefits owed, ensuring workers are compensated fairly for their time and labor.

In addition to back pay, interest may be charged on the outstanding wages, adding to the employer’s financial liability.

$5,000
Fine for Noncompliance

Michigan imposes a substantial fine for prevailing wage violations. Contractors who do not adhere to wage standards may face fines of up to $5,000 per violation.

This penalty serves as a deterrent to prevent wage undercutting on public projects and emphasizes Michigan’s commitment to fair labor practices.

10% Additional Penalty
Supplementary Penalty on Fines

In cases of noncompliance, Michigan also enforces an additional penalty amounting to 10% of the total fine. This extra charge further discourages contractors from ignoring prevailing wage laws and helps offset the administrative costs involved in enforcing these regulations.

Termination of Contract
Right to Terminate for Noncompliance

If a contractor consistently fails to comply with prevailing wage laws, the contracting agent has the right to terminate the contract. This termination makes the contractor and their sureties liable for any excess costs incurred by hiring another contractor to complete the project.

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Certified Payroll in Michigan

Certified payroll is crucial for ensuring compliance with Michigan’s prevailing wage laws. It provides transparency by documenting wages and benefits paid to workers on state-funded projects, ensuring adherence to the state’s wage standards.

Employers submit certified payroll reports that verify wages, hours worked, and benefits provided. These reports create an audit trail that can be reviewed by the DLEO to confirm compliance and investigate potential wage violations. Regularly reviewing and submitting accurate certified payroll can protect employers from penalties.

Navigating Prevailing Wage Requirements in Michigan

Know Your Rights as a Worker

Workers on Michigan state-funded projects are entitled to the prevailing wage for their job classification. They have the right to receive wages and benefits according to state standards, with protections against wage theft. Workers can report violations to the DLEO without fear of retaliation, ensuring fair treatment and pay.

Know What to Do as an Employer

Employers must understand and follow Michigan’s prevailing wage laws. This includes paying the correct wages, keeping detailed records, submitting certified payroll reports, and ensuring that subcontractors comply.

Regular internal audits and training can help employers stay aligned with legal requirements. Consulting with labor law experts is also advisable for guidance on complex wage regulations and to avoid costly penalties.

Common Prevailing Wage Challenges for Employers in Michigan

Complex Regulations: Understanding and complying with detailed wage laws can be challenging.
Recordkeeping Burden: Maintaining accurate payroll records requires time and resources.
Risk of Penalties: Noncompliance can lead to significant fines and contract terminations.
Disputes: Workers may dispute wages, leading to potential legal issues.
Labor Shortages: Finding qualified workers who meet prevailing wage standards can be difficult.

Prevailing Wage Solutions for Employers in Michigan

Employers can address prevailing wage challenges by implementing automated payroll systems, conducting regular compliance audits, and offering training on wage laws for HR and payroll staff. Seeking advice from labor compliance consultants can also help ensure adherence to state requirements and reduce the risk of penalties.

General Best Practices for Michigan Prevailing Wages

DETAIL AND/OR LIST OF BEST PRACTICES FOR PW COMPLIANCE – TRY TO NOT REPEAT WHAT WAS SAID IN THE SOLUTIONS SECTION ABOVE.

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Final Thoughts

In this guide, we covered Michigan’s prevailing wage laws, the responsibilities of employers, and strategies for overcoming common challenges. Complying with these laws is about more than avoiding penalties—it’s about fostering a fair workplace that respects workers and strengthens industry standards.

For workers, it means fair pay and better security. For employers, it builds trust and enhances credibility. Compliance benefits everyone, creating a stronger, more transparent industry.

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FAQs

Is there a prevailing wage in Michigan?

Yes, Michigan has a prevailing wage law that mandates specific wage rates for workers on state-funded construction projects. Reenacted in 2023, the law requires that wages and fringe benefits for public projects align with the rates typically paid to unionized workers in the area.

The Michigan Department of Labor and Economic Opportunity (DLEO) is responsible for setting and enforcing these rates, ensuring that contractors pay fair wages. This law helps maintain industry standards, supports skilled labor, and protects workers from wage undercutting on public projects.

What state has the highest prevailing wage?

California is widely recognized as having some of the highest prevailing wages in the United States. Due to its comprehensive wage regulations and union influence, California sets high hourly rates for many construction roles, especially in large urban areas like Los Angeles and San Francisco.

The state’s Department of Industrial Relations (DIR) regularly updates prevailing wage rates to reflect the cost of living and market standards, ensuring fair compensation for workers on public projects. This commitment to high wages aims to support skilled labor and maintain high project quality across California.

What is the Michigan Wage Act?

The Michigan Wage Act, formally known as the Michigan Prevailing Wage Act, is a law that requires contractors on state-funded projects to pay their workers wages comparable to union rates in the area. Originally enacted in 1965 and repealed in 2018, it was reenacted in 2023.

Under this act, the Michigan Department of Labor and Economic Opportunity (DLEO) sets prevailing wage rates, which cover hourly pay and fringe benefits. The act promotes fair wages, prevents wage undercutting, and ensures quality in public construction projects across the state.

What is the local prevailing wage?

The local prevailing wage is the average wage paid to workers in a specific geographic area for a particular type of work, often established through local union rates. This rate includes both the hourly wage and fringe benefits, reflecting the compensation typical for similar jobs in that region.

In the context of state-funded projects, contractors are required to pay the local prevailing wage to ensure fair treatment and prevent undercutting in the labor market. Local prevailing wages vary by location and are updated periodically to reflect current economic conditions.

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