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Court of Claims tosses challenge to Michigan's prevailing wage rule

Inflation is increasing costs for Michigan road projects
Inflation is increasing costs for Michigan road projects

A Michigan Court of Claims judge says the state has the authority to require contractors to pay a prevailing wage, if they want to do business with the state.

Michigan had a prevailing wage law on the books before 2018. Then the legislature eliminated it following a voter petition drive.

But Governor Gretchen Whitmer said the state’s Department of Technology Management and Budget had the authority to set its own standards for state contracts, so the department created a policy requiring contractors to pay the prevailing wage, starting this March.

The Associated Builders and Contractors of Michigan sued, arguing that the Whitmer administration didn’t follow the proper procedures for introducing a new administrative rule. But in an order signed Monday, Michigan Court of Claims Judge Douglas Shapiro tossed the suit out, saying the budget department had the authority to implement the rule, and it had latitude to impose it under an exception to the Administrative Policy Act.

Attorney General Dana Nessel, whose office defended the state policy, celebrated the decision in a statement.

“Michigan workers deserve to be paid a competitive wage,” said Nessel in the statement. “This ruling from the Court affirms the authority of the State to set best business practices and require fair wages be paid by those who do business with Michigan.”

The Associated Builders and Contractors of Michigan, along with the Mackinac Center for Public Policy, said they will appeal the ruling.

“This dismissal was totally unsurprising,” said Jimmy Greene, president of ABC Michigan, in a statement published on the Mackinac Center’s website.

“Reinstating prevailing wage is yet another example of the governor using unilateral authority, this time to directly ignore the will of the people and the Legislature," Greene said. "We will bring this fight to the Court of Appeals on behalf of contractors and taxpayers. We hope they will dig much deeper on this issue and render a decision supporting our challenge.”

The Michigan Attorney General’s office notes the appeal is due by October 31.

CORRECTION: An earlier version of this story said voters repealed Michigan's prevailing wage law. That was incorrect. The state legislature repealed it after a statewide petition drive gathered enough signatures to put the issue on the ballot.

Dustin Dwyer reports enterprise and long-form stories from Michigan Public’s West Michigan bureau. He was a fellow in the class of 2018 at the Nieman Foundation for Journalism at Harvard. He’s been with Michigan Public since 2004, when he started as an intern in the newsroom.
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