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Local-Hire Fines for Detroit Contractors Hit $5.2M

Monday, March 26, 2018

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Contractors working on Detroit's Little Caesars Arena, failing to hire local residents as 51 percent of the project work force, have paid the city $5.2 million in fines. According to reports, contractors only met the requirement for five months of the 30-month, $863 million project.

Enforcement of the 51 percent quota has increased due to the construction boom in Detroit’s downtown and midtown. Instead of simply continuing to fine contractors for not meeting the project employment threshold, officials are funneling the fine money into training programs that will get more city residents into skilled trades.

Contractor Fines

According to The Detroit News, the $5.2 million in fines is up from $2.9 million paid by March 2017. Through October 2017, 25 percent of hours worked on the project were completed by Detroiters, but this was down from 27 percent in March 2017.

Rick Briggs, CC-BY-2.0, via Wikimedia Commons

Contractors working on the Little Caesars Arena in Detroit, failing to hire local residents as 51 percent of the project work force, have paid the city $5.2 million in fines. According to reports, contractors only met the requirement for five months of the 30-month project.

Portia Roberson, director of the city’s Office of Human Rights, told Crain’s Detroit Business that the 51 percent Detroit labor requirement applies to any development project that receives a brownfield tax abatement or purchased land from the city below market rate.

In terms of steel work, electrical, carpentry and plumbing work on the project, the contractors never met the 51 percent marker in the 12 months of complex finishing work.

"When a project is breaking ground and you've got people out there shoveling and moving ... you could pretty much pick up 51 percent, 52 percent laborers," Roberson said. "When you start going up on a scaffolding, laying a piece of iron 50 feet up in the air, it got less and less possible to find Detroiters."

Of the millions in fines collected, $2.9 million has gone to workforce development, according to officials. Otherwise, the department has been allotted an additional $2.5 million.

Jeff Donofrio, executive director of the city’s workforce development office, told The Detroit News that electricians were most needed. Other areas of low compliance included steel workers and plumbers.

Several other projects also fall under the majority employment of Detroit construction workers rule, including the Flex-N-Gate development and the Henry Ford-Detroit Pistons Performance Center

“We’re trying to build the pipeline of individuals going into the trades, going into construction, taking advantage of these job opportunities,” Donofrio said. “Sometimes that might be entry-level construction opportunities, sometimes that will be an actual pathway to journeyman and a very long-term career in construction.”

According to reports, contractors are able to avoid fines if they hire from plumbing and carpentry unions that have set aside 25 percent of their first-year apprentice positions for Detroit residents.


Tagged categories: Construction; Good Technical Practice; Government; Jobs; North America; Violations

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