How project labor agreements help avoid labor delays
Projects labor agreements are a form of collective bargaining agreement, generally between a local building trades council, or a group of unions, a general contractor and sometimes the end-user of the project. PLAs are often limited in scope and duration to a particular project, or similarly financed projects, such as school construction.
PLAs often provide specific terms and conditions of employment, such as rates of pay and working hours that must be observed by employees on the project. In some instances they will incorporate by reference the terms of local union collective bargaining agreements, which may mandate the use of local union hiring halls to secure employees. Commonly they have ‘no strike’ provisions and provide for an arbitration mechanism to adjust labor disputes. Certain PLAs have incorporated goals or requirements of hiring members in the local community and under-represented groups such as women, minorities and veterans. PLAs sometimes may exclude from their scope off-site construction and fabrication, such as fabrication of ductwork.
Recently, the Associated Builders and Contractors joined a coalition of construction and business associations urging President Trump to eliminate government-mandated project labor agreements. This would allow qualified contractors to compete for federal and federally assisted taxpayer-funded construction projects.
Opponents of PLAs have argued that they increase costs by mandating workers on the project be paid wage and benefit packages negotiated by local unions.
Certain hiring provisions sometimes require non-union employers to hire workers through union hiring halls, and forbid them from employing more than a certain number of their regular non-union crew members.
But for HVAC and sheet metal contractors, PLAs may be advantageous because of the parity in wages paid to workers on the project. All bidding contractors will have the same labor costs so they will compete on other aspects, such as efficiency of operations, quality, safety and reputation, not who employs the lowest cost workforce. Larger scale construction projects are frequently done using PLAs as they can help manage projects efficiently and avoid delays associated with negotiations of the various trades’ labor agreements. It’s the knowledge that there will be no disruption to work projects that benefits sheet metal contractors and construction users alike.