Certified Payroll in Michigan: Prevailing Wage and Reporting Requirements

Michigan's prevailing wage landscape has shifted dramatically in recent years, and contractors who haven't kept up risk stepping onto a covered project without the compliance infrastructure to match. The state's original prevailing wage law, enacted in 1965, was repealed in June 2018. Six years later, Michigan reinstated prevailing wage requirements through Act 10 of 2023, which took effect on February 13, 2024. A further expansion under Act 110 of 2024, effective April 2, 2025, added new registration requirements and extended coverage to certain private energy facility projects.

For trade contractors working on state-funded construction across Michigan, the reinstated law means certified payroll reporting is once again a core compliance obligation on qualifying projects. Federal Davis-Bacon requirements also remain in effect on federally funded projects, creating a dual-layer compliance environment that many Michigan contractors must now navigate.

What Michigan's Reinstated Prevailing Wage Law Covers

The reinstated Prevailing Wages on State Projects Act (Act 10 of 2023) requires contractors and subcontractors to pay prevailing wages and fringe benefits on state-funded construction projects. The law is administered and enforced by the Michigan Department of Labor and Economic Opportunity (LEO).

Covered Projects

The law applies to construction, alteration, repair, installation, demolition, or improvement of public buildings, schools, works, bridges, highways, or roads that are sponsored or financed in whole or in part by the state. Common examples include Michigan Department of Transportation (MDOT) infrastructure projects, state university and public school construction, and state building renovations.

Two categories of projects are exempt from the state prevailing wage requirement:

• Federally controlled projects: Contracts that already require prevailing wage payments under the federal Davis-Bacon Act are exempt from the state law, since federal wage determinations apply instead.

• Pre-effective date contracts: Contracts entered into or bids made before February 13, 2024, are not covered by the reinstated law. Public school projects funded by millage revenue authorized before that date are also exempt.

How Prevailing Wage Rates Are Determined

Before advertising for bids on a state project, the contracting agent must have the LEO Commissioner determine the prevailing wage and fringe benefit rates for all classes of construction workers needed on the project. Rates are based on wages paid to construction workers in the same locality on similar contracts, which typically reflect local collective bargaining agreements.

The determined rates become part of the project specifications and bid documents, and contractors must factor them into project pricing from the outset.

Certified Payroll Reporting Requirements

Certified payroll is the mechanism Michigan uses to verify that contractors are meeting their prevailing wage obligations on covered state projects. The reporting requirements apply to every contractor and subcontractor performing work on a qualifying project.

What Contractors Must Document

Contractors and subcontractors must maintain payroll records documenting wages and fringe benefits paid to each construction worker on a covered project. Records must be kept for a minimum of three years and must be available for inspection by LEO or the contracting agent.

Certified payroll reports submitted to the contracting agent must include:

• Worker names, job classifications, and hours worked

• Hourly wage rates and fringe benefit amounts paid

• Project identification and reporting period

• A certification that wages paid meet or exceed the prevailing rate

Upcoming Online Submission Requirement

Starting April 2, 2026, Michigan will require certified payroll records to be submitted online. Contractors currently submit reports to the contracting agent, but the transition to electronic filing will change the reporting workflow. Trade contractors managing ​construction payroll across multiple state projects should prepare for the shift by confirming that their payroll systems can generate reports in the required digital format.

Contractor Registration

As of April 2, 2025, under Act 110 of 2024, contractors and subcontractors must register with the state before performing work on prevailing wage projects. Registration adds an administrative step before work begins, alongside posting prevailing wage rate schedules on the jobsite and notifying workers of their applicable wage rates.

Federal Davis-Bacon Requirements in Michigan

Many construction projects in Michigan involve federal funding, whether through FHWA highway programs, HUD housing projects, or federal grant programs. On those projects, the federal Davis-Bacon Act applies regardless of the state prevailing wage law.

Key Differences from the State Law

The Davis-Bacon Act covers federally funded or assisted construction contracts exceeding $2,000, a much lower threshold than most state prevailing wage triggers. Federal wage determinations are set by the U.S. Department of Labor and published on SAM.gov, and they may differ from state-determined rates for the same locality and trade classification.

Federal certified payroll uses the DOL Form WH-347 and must be submitted weekly. Contractors working on a project with federal funding follow Davis-Bacon requirements rather than the state law, since projects already covered by Davis-Bacon are specifically exempt from Act 10.

For trade contractors who work on both state-funded and federally funded projects, maintaining accurate ​payroll reports for each requires clear separation of wage rates, reporting forms, and submission timelines.

Penalties and Enforcement

Michigan's reinstated prevailing wage law includes enforcement provisions that give LEO authority to investigate alleged violations and take action against non-compliant contractors.

Consequences of Non-Compliance

Contractors who fail to pay the required prevailing wages are liable for the unpaid wages plus additional damages. The law also establishes anti-retaliation protections for workers who report prevailing wage violations or certified payroll discrepancies, including protection from termination, disciplinary action, and discrimination.

Every contract for a state project must include an express term providing that construction workers are intended beneficiaries of the prevailing wage and fringe benefit requirements. Workers can pursue civil action to recover unpaid wages if a contractor falls short.

How to Stay Compliant on Michigan Prevailing Wage Projects

With the law still relatively new and compliance requirements expanding, Michigan contractors need clear operational processes to avoid violations. Coordination between field and labor tracking, payroll, and project administration is essential.

Build Prevailing Wage Into Project Setup

When a state-funded project is awarded, the prevailing wage rate schedule should be incorporated into payroll setup before the first worker clocks in. Matching job classifications to the rate schedule at the project level, rather than applying rates retroactively, prevents underpayment from the start.

Separate State and Federal Projects in Payroll

Contractors working on both state-funded and federally funded projects must track which wage determination applies to each. Applying a Davis-Bacon rate to a state project (or vice versa) can result in underpayment if the rates differ. ​Workforce scheduling that assigns crew members to specific projects with the correct wage classification keeps payroll aligned with each project's requirements.

Prepare for the Online Reporting Transition

The April 2026 deadline for online certified payroll submission is approaching. Contractors who currently prepare reports manually or in spreadsheets should evaluate whether their HR and onboarding and payroll systems can generate compliant electronic filings. Waiting until the deadline creates unnecessary risk.

How Trayd Supports Michigan Prevailing Wage Compliance

Trayd is a back-office operating system built for construction that unifies ​payroll, HR, compliance, and job costing into a single platform designed for the complexity of trade contracting. For contractors managing prevailing wages, multi-project crews, and certified payroll submissions across state and federal requirements, Trayd centralises labor tracking and payroll processing so certified payroll data is captured at the source rather than assembled each reporting period manually.

​Schedule a demo to see how Trayd helps trade contractors meet Michigan's reinstated prevailing wage and certified payroll requirements.

Frequently Asked Questions

Does Michigan have a state prevailing wage law?

Yes. Michigan reinstated prevailing wage requirements through Act 10 of 2023, effective February 13, 2024. The law applies to state-funded construction projects.

Are Michigan projects covered by both state and federal prevailing wage?

Not simultaneously. Projects funded under the federal Davis-Bacon Act follow federal requirements and are exempt from the state law. State-funded projects without federal involvement follow Act 10.

When must Michigan contractors start submitting certified payroll online?

Online submission of certified payroll records becomes mandatory on April 2, 2026. Contractors currently submit reports to the contracting agent.

Do Michigan contractors need to register before working on prevailing wage projects?

Yes. As of April 2, 2025, contractors and subcontractors must register with the state before performing work on prevailing wage projects under Act 110 of 2024.

Are public school projects covered by Michigan's prevailing wage law?

Most new public school construction projects are covered. School projects funded by millage revenue authorized before February 13, 2024 are exempt.

How long must Michigan contractors keep prevailing wage payroll records?

Contractors must maintain payroll records for a minimum of three years and make them available for inspection by LEO or the contracting agent.