On March 24, Michigan Governor Gretchen Whitmer signed two pro-labor bills designed to increase union wages and density. First, Governor Whitmer signed Senate Bill 34, which repeals Michigan’s 2012 “right-to-work” law for private-sector employees. Second, Governor Whitmer signed House Bill 4007, which restores prevailing wage requirements on all state construction projects. Both laws will take effect in April 2024.
Michigan became the first state to repeal its “right-to-work” law since 1965, which is when Indiana repealed its “right-to-work” law (only to reinstate it in 2012). Missouri changed its “right-to-work” law in 2018, but it came via ballot measure, not legislation.
Senate Bill 34 repeals Michigan’s 2012 “right-to-work” law. It makes clear that unions and employers in Michigan can agree to include a “union-security clause” in their collective bargaining agreements:
An employer and a labor organization may enter into a collective bargaining agreement that requires all employees in the bargaining unit to share fairly in the financial support of the labor organization. This act does not, and a law or policy of a local government must not prohibit or limit an agreement that requires all bargaining unit employees, as a condition of continued employment, to pay to the labor organization membership dues or service fees.
Michigan’s constitution provides that new laws do not take effect until 90 days after the end of the legislative session unless the legislature, by a super-majority vote, grants immediate effect. The current legislative session does not end until December 31, 2023, which means that the new law will take effect on April 30, 2024.
State Prevailing Wage Law
Prior to 2018, Michigan law (1965 PA 166) required the use of prevailing wages for state-funded construction projects. The prevailing wage requirement was repealed in 2018 based on speculative (and disputed) claims that the state’s prevailing wage law was outdated and expensive.
House Bill 4007 reinstates Michigan’s “prevailing wage” requirement for state construction projects receiving public funding. The act is substantively similar to the old law (1965 PA 166). It requires every “state construction project” to include a term stating that the rates of wages and fringe benefits to be paid to each class of “construction mechanics” must equal or exceed the wage and benefit rates that are standard in the locality where the work is to be performed. A violation of the act is a misdemeanor.
The Michigan legislature cited numerous studies finding that prevailing wage laws “do not raise the cost of construction” and have the added benefit of raising workers’ wages, “reduc[ing] occupational injuries and fatalities, increase[ing] the pool of skilled construction workers, and actually enhanc[ing] state tax revenues.”
The “prevailing wage” law will also go into effect on April 30, 2024.
While not effective until April 2024, Michigan’s new laws represent a decisive win for labor unions in the state.