In a significant policy shift with broad implications for Michigan’s construction and energy sectors, the Michigan Prevailing Wage Act now extends to certain private energy facilities, following the passage of Senate Bill 571 (the “Amendment”). Signed into law on July 23, 2024, the legislation took effect April 2, 2025, and introduces major changes to compliance requirements, project classifications, and contractor oversight under the Act.

Previously applicable only to state-funded construction work, the Michigan Prevailing Wage Act now requires prevailing wages to be paid on qualifying private energy projects, placing these efforts under the same regulatory structure as public infrastructure work. The amendment not only expands the scope of what qualifies as a “state project,” but also launches a contractor registration system and initiates a phased plan for mandatory online certified payroll submissions.

Expanded Definitions and Scope

Under the revised law, the definition of a “state project” has been broadened to include two categories: traditional public works and certain private energy facility projects. The law specifies that a state project may involve the “new construction, alteration, repair, installation, painting, decorating, completion, demolition, conditioning, reconditioning, or improvement of public buildings, schools, works, bridges, highways, or roads” if such work is both “authorized by a public contracting agent” and “sponsored or financed in whole or in part by this state.” Now, a third component is added: energy facility projects.

These energy projects must meet criteria to qualify, including a nameplate capacity of at least 2 megawatts. Covered facilities include solar energy, wind energy, and energy storage installations. The Amendment explicitly excludes fossil fuel-based storage systems, such as those relying on fossil fuel inputs or power-to-gas technologies using those fuels.

Notably, even if privately owned, these qualifying energy facilities may be subject to the Prevailing Wage Act if they meet the size and connection standards outlined. The facilities may also span multiple parcels of land, provided they share a single interconnection point with the grid.

New MDLEO Registration Process for Contractors and Subcontractors

Effective with the new law, contractors and subcontractors working on state projects—now including qualifying energy developments—must register annually with the Michigan Department of Labor and Economic Opportunity (MDLEO). The new registration system is accessible online and requires a $500 annual fee per applicant.

To obtain or renew a state project registration, contractors must submit a comprehensive application detailing the company’s legal structure, ownership, tax identification numbers, unemployment insurance numbers, and confirmation of legal compliance. An in-state records custodian must also be listed, where applicable.

Importantly, “without a state project registration, a contractor/subcontractor may not submit or be listed on a bid, enter an agreement, or perform work on a state project.” Violators of this requirement could face substantial liabilities. “If in violation of the Act, the contractor and subcontractor may be held jointly and severally liable.”

Currently, there is no public registry of contractors or subcontractors with approved registrations. However, MDLEO is expected to develop and refine the database infrastructure over the coming year.

Certified Payroll and Wage Rate Transparency

In addition to the registration overhaul, SB 571 sets in motion a transition to online certified payroll transmittals for all state project participants. While contractors are presently required to transmit certified payroll records to the contracting agent within 10 days after the end of each pay period, beginning April 2, 2026, these submissions will move online.

Until the online platform is fully launched, MDLEO encourages contractors to monitor rate information through its unofficial database, “located at the bottom of the MDLEO website.” Though unofficial, this rate list by county is being used as a guide in the absence of formally adopted prevailing wage determinations.

Due to the evolving nature of these processes, MDLEO encourages direct engagement from industry stakeholders to clarify project-specific concerns. “While there has been some confusion regarding rates included in RFPs, the MDLEO Wage and Hour Division encourages industry feedback and questions through email at WHPWRequest@michigan.gov or WHInfo@michigan.gov, by calling (517) 284-7800, or by submitting a question here, prior to bid acceptance.”

Enforcement and Penalties

Contractors should also be aware of significant penalties for noncompliance. Individuals or firms that violate the Prevailing Wage Act may face a civil fine of up to $5,000. Additionally, MDLEO has the authority to “suspend or revoke a contractor’s state project registration if the contractor significantly or repeatedly violates the Act or another law.”

However, the agency must first “establish and implement procedural rules before suspending or revoking a contractor’s state registration,” and such procedural guidelines have not yet been formally issued.

Legal and Industry Guidance Advised

With the new law’s broad applicability and ongoing implementation efforts, legal professionals and industry advisors are urging contractors and developers to consult with experienced counsel. “Proper guidance from a knowledgeable professional can help contractors reduce risks and potential penalties when navigating Prevailing Wage issues,” the notice states. Contractors with questions are encouraged to consult with legal advisors or members of Clark Hill’s Construction, Education, Environmental & Natural Resources, or Labor and Employment practice groups.

As Michigan embraces a new era of wage compliance in both public and private sectors, staying ahead of regulatory updates will be crucial for project planning, bidding strategy, and labor law compliance. The impact of these changes will be felt across the state’s infrastructure and renewable energy markets for years to come.

Originally reported by Joshua Wilk, Jeffrey M. Gallant, Jeremy S.Motz in Clark Hill.