Union-only Project Labor Agreements (PLAs) Eliminate Merit Shop Contractors From Competing For and Winning Construction Projects

June 8, 2011

Construction contracts subject to union-only PLAs are almost always awarded exclusively to unionized contractors and their all-union workforces. According to the most recent data from the U.S. Department of Labor’s Bureau of Labor Statistics, only 20 percent of New Jersey’s private construction workforce belongs to a union. This means PLAs would discriminate against eight out of ten construction workers who otherwise would work on construction projects if not for a union-only PLA.  The following provisions typically discourage non –union or Merit Shop contractors from working on PLA projects.
The following provisions typically discourage merit shop contractors from working on PLA projects.

• PLAs require non-union companies with their own benefit plans to pay their workers’ health and welfare benefits to union trust funds. Thus, companies have to pay benefits twice: once to the union and once to the company. Workers never see any of the benefits sent to the unions unless they decide to leave their non-union employer and remain with the union until vested;
• PLAs require non-union companies to obtain apprentices exclusively from union apprenticeship programs. Participants in federal and state-approved non-union apprenticeship programs cannot work on a job covered by a PLA. This means craft professionals enrolled in non-union apprenticeship programs are excluded from work in their hometowns.
• PLAs require non-union companies to obtain their workers from union hiring halls. This means a non-union company has to send its own employees to the union hiring hall and hope the union sends the same workers back.
Union-only PLAs drive up the cost of construction projects

By unnecessarily limiting bidders and following outdated and inefficient union work rules, PLAs consistently drive up costs on projects.
According to a October 2010 New Jersey Department of Labor and Workforce Development study that analyzed NJ schools being build from fiscal year 2008, schools being built during this time frame with a PLAs were 30.5% MORE EXPENSIVE to build than schools that did not have a PLA.  This same study also proves that PLA projects take 25% longer to complete.  This study can be found here: http://lwd.dol.state.nj.us/labor/forms_pdfs/legal/2010/PLAReportOct2010.pdf

The PLA issue is not a wage or benefit issue because of NJ’s prevailing wage law
Pro-PLA advocates are more interested in distorting the truth and misleading the public into thinking that the heart of the public policy intent for PLAs is to ensure high wages. All projects subject to PLA laws are subject to NJ’s prevailing wage law, which establishes government mandated wage and benefit rates that are almost identical to union wages. In reality, wages have little to do with the real reasoning why building trades unions and pro-union politicians support PLAs; it is about securing union contractors a monopoly on state funded construction projects.

Kirby Wu, AIA, LEED AP
Chairman ABC-NJ

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