Progressive causes, labor unions lead anti-business push
After state Democrats took control of Michigan state government for the first time in 40 years, labor unions controlled the agenda for the first several months of the year, with more pro-union legislation on the way.
Labeling businesses as “exploitive” in House legislative committee, Democrats sought to rectify what they see as an imbalance of power between businesses and workers they believe are being taken advantage of. While Right to Work and Prevailing Wage were among two of the most notable changes so far, other union-friendly policies currently being developed are likely to have an even more dramatic impact on Michigan’s economy.
California-inspired independent contractor legislation (HB 4390) includes troubling changes to force many new workers to become direct employees. The changes are so sweeping that even Uber drivers and Instacart shoppers could be re-characterized as direct employees. Such new policies would threaten the existence of these emerging technology services, while also harming the construction industry accustomed to outsourcing work to subcontractors.
The legislation would also impact companies that share employees with other contractors when supplement their manpower during busy times or try to avoid layoffs during slower periods. Democrats label the use of independent contractors as “payroll fraud,” proposing stiff new criminal penalties and blacklisting for even inadvertent mistakes.
House Bills (4399-4401) would ban non-compete agreements. More importantly, the legislative package would require employers to disclose compensation levels of each employee to their work colleagues who are “similarly-situated employees.” Being forced to disclose wage rates of all employees within a company will, by design, lead to jealousy and hostility within the workplace among coworkers.
Employers who hire temporary employees through various employment agencies like Tradesman, Aerotek or Kelly Services would be punished under House Bill 4034. The legislation discourages the use of temporary workers, proponents claiming every temporary worker is stealing the job of a full-time worker.
The legislation requires employers to submit the names and contact information of all temporary workers to other workers on site. This would allow union salts to collect the names and contact information of fellow employees for recruitment or harassment purposes. Temporary worker employment records would be required to be reported to the state, where supervisors previously working for labor unions would get access to employer and employee information.
The bill would also prohibit a temporary worker from being sent to a jobsite where a strike is occurring. Restrictions to hiring replacement workers have already been ruled unconstitutional by the United States Supreme Court. The bill would also require the agency to attempt to permanently place laborer in permanent position of the client if client intends to make a permanent hire.
The proposed repeal of ABC-inspired legislation called the Fair and Open Competition Act, would allow local units of governments to set prevailing wage rates and force contractors to be party to a Project Labor Agreement in order to do local government work. PLAs often require non-signatory contractors to either adopt union-style training programs or pay into union fringe benefit funds that their own employees wouldn’t qualify for in order to win the construction contracts. Part of the PLA reforms would include requirements for all state contractor laborers to be enrolled in federally-approved apprenticeship programs.
Because few non-union trades even have these programs currently available, state highway contracts and municipal infrastructure projects could quickly become union-only. ABC’s trade school in southeast Michigan, SEMCA, would try to create new options to provide DOL-approved training programs for contractors where possible, but the new requirements would create onerous burdens on contractors to take workers out of the field and enroll employees in new formalized training programs.
Anti-Business State Legislation
At a Glance
- Repeal of the Fair and Open Competition Act would force contractors to sign Project Labor Agreements and force many laborers into DOL registered apprenticeship programs that aren’t currently available.
- HB 4034 would require significant new reporting requirements and restrictions of temporary workers.
- HB 4237 repeals a 2015 law that prohibited local governments from requiring special pay or benefit requirements (local minimum wages) on businesses.
- The “Clean Energy Future Plan” requires utilities to shut down all coal-fired plants by 2030 and be carbon free by 2035, despite the lack of available technology to do so.
- Independent contractor legislation (HB 4390) would force many subcontractors to become direct employees.
- House Bills (4399-4401) would ban non-compete agreements and would require employers to disclose compensation information to coworkers.
- Temporary worker hiring would be restricted under House Bill 4034, requiring onerous state reporting requirements.
