Project Labor Agreement (PLA)

TIP #6

When a PLA is attached to the project, all contractors become unions for this project only. For union contractors, this is easy. If you are a nonunion contractor, you have some homework to do. There may be a hidden cost that will affect your bid. Each contractor must sign a Letter of Assent on their company letterhead. The nonunion contractor must establish a trust fund account for each trade they utilize. You agree for that specific project; you will operate as a union contractor. Union contractors pay the base hourly rate to the employee; the fringe benefits the union trust fund on behalf of the employee. The monthly report and money are due on the 15th for the prior months’ hours worked.

READ THE PLA AND MASTER UNION AGREEMENT

Read the PLA for defining a core employee, grievance procedures, and no picketing or work slowdown allowed on the project. You also agree to be bonded by the Master Agreement of the trade(s) you utilize. Many contractors sign the PLA without reading the Master Agreement. You must know what rules you agree to follow.

CORE EMPLOYEE

The PLA agreement will define what qualifies as a core employee. The contractor may use up to five core employees on the project. If you 1099 your employees, they do not qualify as core employees. Public Work construction does not allow 1099 employees. Either the employee is on your payroll or is a subcontractor. The first employee is from your workforce, the 2nd employee is from the union, alternating until five employees are from your company, after five employees from your company, the remaining staff from the union hall. Each PLA agreement will have some variant of this process. Read the PLA for the specifics. Your core employees must join the union. In some trades, there is a cost to join. Are you going to pay this for your employees? Will you include that cost in your bid?

CASH FLOW

It may take 60-90 days to get your first reimbursement check. Do you have the cash flow to cover your payroll, fringe benefits payments to the trust fund, materials, and other expenses for 90 days? You need a line of credit if you don’t have the cash. Is your company loan ready? Administration Rescue, Inc. will assess if your company is prepared to get approved for bank lending. On www.smallbizpro.net, companies can take three different assessments for free, Business, Contract, or Loan ready. The evaluation will let you know what is missing before going to a bank for a credit line.