Project Labor Agreements are unique to the construction industry. PLAs are legally binding agreements between a construction company, contractor and unions, and are created before a construction project begins. PLAs are project specific. These agreements govern the terms and conditions of employment at the job site, establishing worksite conditions and protocols for resolving labor disputes. Many large projects can include many unions, who normally have different requirements. PLAs streamline by requiring all parties to enter into one agreement with consistent terms that govern the work. Project labor agreements are also known as Community Workforce Agreements. However, CWAs have more community focused goals.
What are the core elements of a PLA with a union(s)?
- The terms will bind all contractors and subcontractors to the agreement
- No-strike or no-lockout clauses are standard
- Procedures to resolve labor disputes
- Typically identifies wages & fringe benefits
- Procedures for hiring additional union workers
- They can also include many other clauses, including metrics for hiring, small business involvement, and more
Are Project Labor Agreements legal in Right-to-Work states?
Yes. Right-to-Work laws do not make PLAs illegal. There are many examples of PLAs in Right-to-Work states. Right-to-Work laws do not outlaw unions, instead they are used to protect workers. A person cannot be denied employment because of membership or non-membership in a union. As of 2023, there are 26 right to work states: Alabama, Arkansas, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin and Wyoming.
What about federal construction projects? When are PLAs used?
Back in 2022, President Biden signed an executive order requiring any federal construction project over $35M to have a Project Labor Agreement. It’s anticipated that the order will impact over $262 billion in federal projects and impact more than 200,000 workers. According to the Department of Labor non-union contractors can still bid on construction projects when PLAs are required. Non-union contractors can choose to enter PLAs without becoming a union employer.
How much Infrastructure Federal Funding is there in each state?
How are wages determined on public projects?
The Department of Labor determines the prevailing wage for each type of job in each local area. Wages are determined in each county. The DOL completes a survey, typically every three years (to union & non-union) and uses that information along with past collective bargaining agreements (PLAs) to determine the minimum wage. Prevailing wages are required for government projects larger than $2,000. There are also federally assisted contracts, where federal and local dollars are combined, but the work is still governed by the federal Davis-Bacon Act. More information can be found in our Prevailing Wage Determination FAQs.
What types of reports are needed on public construction projects?
Certified Payroll reports need to be submitted weekly. They are submitted either to a government agency or GC on government funded projects (federal, state or local). HCM TradeSeal provides unlimited Certified Payroll reporting – and automatically creates the report in the format needed. This report certifies that you paid your employees according to the prevailing wage laws – and includes their worker classification and fringe rate. The federal form is WH-347. For state or local projects, certified payroll reporting forms and requirements vary by state or even local area.
What happens if you don’t do Certified Payroll when you should?
- Government Withholds Payments – The government may hold payments to pay for unpaid wages or any damages to employees.
- Debarment – Your business may get debarment, meaning they are unable to apply for future contracts for up to three years.
- Prosecution – If a business submits what’s considered a false certified payroll record, you could be putting your business at risk for criminal persecution. If this happens, it typically leads to fines, but could lead to imprisonment.
- Termination – The government may end your contract with them and find someone else.
Many payroll providers do not provide all features a construction company needs to do certified payroll correctly. Many partner with solutions who integrate with them and do that portion of the payroll calculations and reporting for them. HCM TradeSeal is a national provider of certified payroll reporting – both for union and non-union employees. HCM TradeSeal has integrated with the largest ERP and Payroll providers on the planet, so you solve your Certified Payroll accurately, quickly – every time.
What’s the cost of a Certified Payroll solution?
There’s typically an implementation fee, especially if connecting to data from your ERP or Payroll provider. After that, the monthly fees are minimal. HCM TradeSeal has three tiers of service: Basic, Standard & Enterprise. Pricing ranges from $6/employee to $16/employee per month. You can save up to 8 hours a week, using the TradeSeal solution for Certified Payroll. To learn more about specific features & pricing, please see our Pricing.
Ready to solve your Certified Payroll reporting? Schedule a demo with our team.