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Opinion No. 5600

November 21, 1979


Statute requiring payment of a prevailing wage and fringe benefit rates of the locality

When an owner of a private building remodels the building for occupancy for a public body, the owner is not subject to the provisions of 1965 PA 166 which requires payment of the prevailing wage and fringe benefit rates of the locality.

Honorable Debbie Stabenow

State Representative

The Capitol

Lansing, Michigan 48909

You have stated that the Ingham County Department of Social Services is currently leasing certain office facilities in Lansing, Michigan, which were remodeled by the lessor in keeping with the specifications required by the lease. Your also state that it is your understanding that the lessor, a private corporation, did not pay the prevailing wage and fringe benefit rates of the locality. Based upon these facts, you have requested my opinion on the following questions:

1. Has the lessor violated 1965 PA 166, as amended?

2. If a violation has occurred, what is the legal remedy?

1965 PA 166, Sec. 1, as last amended by 1978 PA 100, MCLA 408.551; MSA 17.256(1), provides in relevant part:

'(a) 'Construction mechanic' means a skilled or unskilled mechanic, laborer, worker, helper, assistant, or apprentice working on a state project but shall not include executive, administrative, professional, office, or custodial employees.

'(b) 'State project' means new construction, alteration, repair, installation, painting, decorating, completion, demolition, conditioning, reconditioning, or improvement of public buildings, schools, works, bridges, highways, or roads authorized by a contracting agent.

'(c) 'Contracting agent' means any officer, school board, board or commission of the state, or a state institution supported in whole or in part by state funds, authorized to enter into a contract for a state project or to perform a state project by the direct employment of labor.'

Also pertinent to the questions you have raised in 1965 PA 166, Sec. 2, as amended by 1978 PA 100, MCLA 408.552; MSA 17.256(2), which provides:

'Every contract executed between a contracting agent and a successful bidder as contractor and entered into pursuant to advertisement and invitation to bid for a state project which requires or involves the employment of construction mechanics, other than those subject to the jurisdiction of the state civil service commission, and which is sponsored or financed in whole or in part by the state shall contain an express term that the rates of wages and fringe benefits to be paid to each class of mechanics by the bidder and all of his sub-contractors, shall be not less than the wage and fringe benefit rates prevailing in the locality in which the work is to be performed. Contracts on state projects which contain provisions requiring the payment of prevailing wages as determined by the United States secretary of labor pursuant to the federal Davis-Bacon act (United States code, title 40, section 276a et seq.) or which contain minimum wage schedules which are the same as prevailing wages in the locality as determined by collective bargaining agreements or understandings between bona fide organizations of construction mechanics and their employers are exempt from the provisions of this act.'

Even while in the course of construction on leased land, the improvements become part of the land and belong to the landlord. Schneider v Bank of Lansing, 337 Mich 646; 60 NW2d 187 (1953). Also, a tenant is not liable for improvements made on leased premises by the landlord in the absence of a stipulation to that effect. 51 CJS, Landlord and Tenant, Sec. 407, p 1049.

The owner of property in the exercise of dominion over its property, may make the alterations to the premises in order to facilitate its use by a tenant. In such case, the lessor contracts for alternations and the public body is not a contracting party to the remodeling contract.

It is my opinion, therefore, that the owner of a private building is not subject to the provisions of 1965 PA 166, supra, as amended by 1978 PA 100, when it remodels a private building for occupancy by a public body.

My answer to your first questions obviates the necessity to answer your second question.

Frank J. Kelley

Attorney General