ABOUT PROJECT LABOR AGREEMENTS
Project Labor Agreements (PLAs) provide owners and managers a tool for creating a stable, uniform labor management foundation for methodically planning and scheduling a project. The agreements reduce the uncertainties inherent on construction projects by establishing all terms and expectations upfront and creating a framework for cooperation among all groups working on the project. By adopting a labor-management model that fosters job-site efficiencies and ensures an uninterrupted supply of qualified workers, PLAs keep a project on schedule – avoiding costly delays – and assist in preventing wage theft. They also allow parties to more accurately predict labor costs and production timetables, which means more accurate bidding and lower overall costs. PLAs also offer direct cost savings through streamlined safety procedures, avoiding the need to renegotiate agreements during the course of the project, setting work schedules to keep costs low, and using expedited dispute resolution procedures.
By providing facility owners with a unique and exceptionally reliable source of skilled, trained manpower in all applicable trades, PLAs promote safe, timely, cost-effective construction delivered to the highest quality standards.
Moreover, due to the projected increased demand for skilled labor in the North American construction industry, PLAs help address long-term needs of project owners by providing a highly effective strategy for recruiting and training the next generation of skilled construction workers, thus assisting the industry’s critical need for future workforce planning and development. This experience, as well as those in major metropolitan areas across the nation, point to clear lessons in how Project Labor Agreements can make construction projects better for government, workers, contractors and communities.
Project Labor Agreements
Project Labor Agreements (PLAs) benefit all parties on a construction project. These agreements set a standard for employment on the project to help ensure workers are protected and setting family-supporting wages and benefits. Project Labor Agreements are negotiated for each job individually so that owners, contractors, community and labor concerns are met, some of these provisions are:
Avoid delays by ensuring a fast dispute resolution procedure to settle common issues that arise on construction projects.
Set requirements for hiring local residents to work on the project and to increase residents in apprenticeship programs in careers that provide for family supporting wages and benefits. Using Apprenticeship Readiness Programs, we are able to recruit new people into the construction industry and by requiring the use of apprentices on the project, we are able to train more people entering the workforce.
Allow owners to set requirements to ensure competition on the project.
SMALL BUSINESS/LOCAL BUSINESS
Set standards to encourage local and/or small businesses to participate on the project and allow them access to training programs and a skilled workforce.
OTHER CONCERNS THAT ARE ADDRESSED
Skilled craftspeople, recruitment, prevention of wage theft, safety
Frequently Asked Questions
What is a Project Labor Agreement?
A Project Labor Agreement (PLA) is a comprehensive pre-hire collective bargaining agreement that sets the basic terms and conditions of employment for an entire construction project.
What is the difference between a PLA and a usual Collective Bargaining Agreement?
In the construction industry, collective bargaining agreements are commonly negotiated between a single union that represents the members of a particular trade and a contractor or association of contractors that employ the members of that trade. As a result, on any construction site, there may be employees working under any number of collective bargaining agreements, or no agreement at all.
A PLA establishes the basic terms and conditions of employment for all of the employees who will be engaged on the project.
Are there certain common features in PLAs?
A PLA will commonly have the following features:
- Uniform work hours and holiday schedules
- Prohibitions against strikes and lockouts
- Procedures for quickly resolving disputes that arise on the project
- Pre-job conferences to assign and coordinate work
- Joint safety and health committees
- Provisions for using apprentices on the project, to ensure local community job training opportunities
- A commitment to utilize the services of the Center for Military Recruitment, Assessment and Veteran’s Employment and its “Helmets to Hardhats Program,” to recruit veterans to work on the covered project.
What happens to the local union agreements in the area?
For purposes of the project to which the PLA applies, the PLA’s provisions will supersede the terms of any other collective bargaining agreements that would otherwise apply. However, the PLA will typically refer to the local collective bargaining agreements for other terms, including, for example, the wage rates and fringe benefits for each trade and the job referral procedures.
Why would an owner or construction manager be interested in using a PLA?
PLAs provide owners and managers with a tool for creating a stable, uniform labor management foundation for methodically planning and scheduling a project. The agreements reduce the uncertainties inherent in large-scale construction projects by establishing all terms and expectations up-front and creating a framework for cooperation among all groups working on the project.
By adopting a labor-management model that fosters jobsite efficiencies and ensures an uninterrupted supply of qualified workers, PLAs keep a project on schedule, avoiding costly delays. They also allow parties to more accurately predict labor costs and production timetables, which means more accurate bidding and lower overall costs. Additionally, PLAs offer direct cost savings through streamlined safety procedures, avoiding the need to renegotiate agreements during the course of the project, setting work schedules to keep costs low, and using expedited dispute resolution procedures.
Finally, public entities are increasingly using PLAs to benefit the community in which the project is being constructed, by guaranteeing training and work opportunities to the local workforce.
On what sort of projects are PLAs most appropriate?
PLAs are most often used on complex projects that require the services of multiple contractors and subcontractors, employing numerous trades over a sustained period of time.
When are PLAs negotiated?
PLAs are negotiated during the planning stage for a construction project, before the bids are let and construction begins. That way, everyone interested in working on the project knows the ground rules up front, and can take the requirements of the agreement into account in preparing their bids.
Can a public entity use a PLA?
Yes. When properly structured, it is lawful under both federal labor law and most state competitive bidding laws for public entities to use PLAs. Most states require agencies to assess their needs in undertaking a particular project and to make a determination that using a PLA will satisfy their needs on that project.
Can PLAs be used on projects conducted by the federal government or that are receiving federal money?
Yes. During the administration of President George W. Bush, an Executive Order prohibited the federal government from requiring the use of a PLA on its own construction or construction for which it was providing any form of financial assistance. President Obama lifted those restrictions, and replaced them with a policy that encourages all federal agencies to consider requiring the use of PLAs when they undertake construction projects that will cost the federal government $25 million or more. The policy also permits the use of PLAs on lower cost federal construction and federally financed projects.
Do PLAs on public projects have special features?
As with any PLA, any qualified contractor can bid to work under a PLA on a public project. Many agreements in the public sector, however, contain special accommodations to make it easier for contractors that do not ordinarily work under collective bargaining agreements to participate on the project. For example, some agreements will permit contractors to bring a certain number of their existing employees onto the worksite, without requiring them to go through the union’s hiring halls. Similarly, as noted above, the provisions of public sector PLAs are commonly only binding on contractors while they are working on that particular project.
In addition, as discussed in more detail below, public agencies are looking to PLAs as tools for providing training and career opportunities for community members.
Do you have to be a union member to work under a PLA?
No. Anyone willing to work under the terms of the agreement is free to apply for work on the project. In fact, federal law prohibits employers from discriminating against employees based on whether they are union members. In non-“Right-to-Work” states, employees may be required to pay a service fee to the union that represents them on the construction project, but no one can be required to join the union.
Do they discriminate against non-union contractors?
No. Any contractor that is willing to abide by the terms of the agreement is free to bid for work under a PLA. In the private sector, contractors who work on the project may be required to sign the underlying local union collective bargaining agreement. On public projects, however, contractors only have to agree to abide by the PLA and the underlying local agreements while working on that particular project.
Is there any reason why minority or woman-owned businesses cannot work under a PLA?
No. It is entirely up to the contractor to choose whether to work under a PLA. In fact, as part of their commitment to using their construction projects to invest in community development, some public agencies have developed innovative programs to assist small businesses – including minority and women-owned contractors – in preparing bids and complying with the various legal requirements for operating on a construction site. As an example, the Los Angeles Community College District conducts one-day “boot camps” to help small contractors develop their capacity to handle work on the District’s construction projects. See http://www.build-laccd.org/bidding_and_contracting/index.asp.
How have PLAs been used to achieve benefits for the community or what is a Community Workforce Agreement?
Public entities are using PLAs to provide opportunities for historically disadvantaged workers and businesses. Working together, agencies, unions, contractors and community groups have created innovative pre-apprenticeship programs to help community members develop the skills they need to enter apprenticeship programs; have reserved certain numbers of apprenticeship positions for minority or disadvantaged youth; have set hiring targets for members of the community; and have guaranteed certain numbers of jobs for small or minority-owned businesses. As a result of the requirements of the CWA applied to construction of the Washington National’s Stadium in Washington, D.C., for example, unprecedented numbers of D.C. residents were employed on the project as apprentices and journeypersons.
Public agencies in Los Angeles County have similarly used PLA/CWA’s to significantly increase the number of local and disadvantaged workers successfully prepared for and brought into the local labor-management apprenticeship programs and hired on the projects. These agreements are being used to bring historically disadvantaged community members into careers that will provide them with skills, credentials, good wages, solid benefits, in some cases college credit and for veterans, G.I. Benefits.
Can you have a PLA in Right-to-Work State?
Yes. It is common for collective bargaining agreements to contain “union security” clauses that require employees, as a condition of employment, either to join the union or to pay a fee to the union that provides them with representation services. These clauses are not enforceable in a Right-to-Work state, which means that employees who choose not to join the union get all of the benefits of union representation without having to contribute to the cost. Agreements typically address this issue directly by stating that the union security provision does not apply in such a state. However, nothing precludes unions and contractors from otherwise entering into, abiding by and enforcing collective bargaining agreements, including PLAs, in Right-to-Work states.
Critics say PLAs increase the cost of construction. Is this true?
No. Opponents of Community Workforce Agreements have argued that PLAs increase project costs, but studies by UCLA, Cornell and other leading academics have concluded that there is simply no evidence to back up this conclusion, and that the studies on which the critics rely routinely fail to take into account other factors that influence a project’s costs. In fact, most PLA users speak to the economic benefits that come from having access to an uninterrupted supply of qualified workers, being able accurately to predict labor costs, utilizing expeditious mechanisms for resolving disputes, and creating labor-management cooperation committees to promote safe work practices on the job. As just one example, Toyota, which has built every one of its North American manufacturing facilities under a PLA, reports that its per foot construction costs are one-third less than those of its competitors who eschew these agreements.