Project Labor Agreements Benefit Everyone

What is a Project Labor Agreement?

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A Project Labor Agreement, or PLA, is a valuable tool to help streamline the terms and conditions of employment on construction projects.

A PLA is often made with the intention of ensuring only highly trained and highly skilled tradesmen and tradeswomen work on a project.

In these pre-hire agreements, the project owner/representative and general contractor establish the terms for all trades working on the project: wages, benefits, hours, leave and safety policies. Other items can be added related to residency requirements, minority hiring goals and other project objectives.

Under a PLA, any labor disputes are handled before construction begins. This allows for a smooth construction process and guarantees there will be no work stoppages. PLAs also ensure timeliness, safety, quality of construction, training and much more.

By agreeing to a PLA, the project owner hires only qualified construction workers and guarantees labor stability on their project. Each PLA is designed to tailor the needs of a certain project owner or manager.

PLAs have a proven track record of helping deliver projects on time and on or under budget, which is why they are widely used in both the public and private sectors. They help ensure all work is performed correctly the first time, which helps lower costs by eliminating unnecessary downtime due to labor disputes and safety issues. They also help ensure a longer product lifecycle and help lower maintenance costs.

The validity of PLAs has consistently been upheld in both federal and state courts. PLAs positively influence project timeliness, quality, safety, training, minority employment, employee benefits and labor peace.

There is no substantial evidence PLAs decrease the number of bidders on a project or increase the costs. The evidence reveals quite the opposite, as PLAs lead to efficient management of these projects, which saves taxpayers and/or investors money. It is for this reason many large companies increasingly use PLAs to reduce some of the uncertainties of large-scale or complex construction projects.