Definition
Union labor works under collective bargaining agreements (wages, benefits, work rules); non-union (open shop) labor is hired directly by the employer. On public and some private projects, prevailing wage may be set by union rates in the area. Choice of union vs. non-union affects labor cost, availability, and project requirements.
Why It Matters
Some projects are union-only or have labor agreements; others are open shop. Prevailing wage determinations often reflect union rates in the locality. Contractors must know their labor model, how it fits project requirements, and how to cost and bid accordingly. Misclassification can affect certified payroll and compliance.
Field Example
A GC requires all electrical work to be performed by union electricians per project labor agreement. The sub must use union labor and pay per the CBA; labor cost and certified payroll follow union rates and classifications. On an open-shop project, the same sub might use its own employees at different rates.
Calculation / Formula (if applicable)
Rates come from the CBA or from your open-shop rates. No single formula; labor cost depends on which workforce is used and the applicable wage and benefit package.
Software Application
Support different labor rate sets (e.g., union vs. non-union by project or by craft). When a project has a labor agreement or prevailing wage, apply the correct rate table. Certified payroll and job cost should reflect the actual labor type and rates used.
Tooltip Version
Union labor follows collective bargaining rates and rules; non-union is open shop. Project and prevailing wage requirements determine which labor and rates apply.
Related Objects
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