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Publications | March 27, 2023
2 minute read

Big Changes for Michigan Employers: Right-to-Work Repeal and Prevailing Wage Reinstatement

On Friday, March 24, 2023, Governor Gretchen Whitmer signed into law a bill that repeals Michigan’s Right-to-Work law and reinstates prevailing wages for construction projects.

In effect since 2013, Michigan’s Right-to-Work law prohibited union-security agreements, which require employees to pay union dues as a condition of obtaining or continuing employment in a unionized workforce. Under the Right-to-Work law, employees were able to opt-out of union dues and were still afforded the rights and benefits of being members of the bargaining unit. The new law repeals Right-to-Work, and allows employers and labor organizations to enter into collective bargaining agreements that require all employees in the bargaining unit to pay union dues. The new law further precludes any local government from passing its own Right-to-Work replica in its municipality.

The new law goes into effect 91 days after the end of the current legislative session, which will be in March 2024. Because of the U.S. Supreme Court’s 2018 decision in Janus v. AFSCME, which held that the extraction of union dues by states and public-sector unions from nonconsenting employees was a violation of the employees’ First Amendment rights, the Right-to-Work repeal will not impact public sector jobs like police, fire and public school teachers. However, the repeal will impact unionized jobs in the private sectors, such as the auto industry, construction and manufacturing jobs.

Private sector employers with unionized workforces should review their collective bargaining agreement to see if they contain union security clauses, require that security clauses become part of the contract upon repeal or invalidation of the Right-to-Work law, or require the reopening of the collective bargaining agreement in such a case. Employers who do not have union security clauses in their collective bargaining agreements should prepare to negotiate over union security when their current contracts expire. Similarly, employers who are in the process of or will soon begin to negotiate new collective bargaining agreements should be prepared for demands to include a union security clause in the agreement.

The new law also restores prevailing wages for construction projects. Although the legislature repealed the prevailing wage law in 2018, Governor Whitmer restored prevailing wage rules for state-funded projects in 2021. The new law now restores the prevailing wage rules for local government projects as well. Going forward, a commissioner will establish prevailing wages and fringe benefits for construction projects, and a schedule of these rates will be part of the specifications for the work to be performed. A grandfather clause exempts projects financed by millages predating the new law’s effective date.

For questions about the repeal of Right-to-Work or about prevailing wages, contact a member of Warner’s Labor and Employment Practice Group.