Project Agreement

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Project Agreement

What Is the Project Agreement?

The project agreement is an agreement made between the owners or developers of a construction project and the trade unions. Both the owner/ developer of a construction project and the trade unions are required to carry out the construction work.

When Do You Need a Project Agreement?

Project labor agreement (PLA) is defined as a pre-hire agreement made between a project owner and contractor, and labor unions. It specifies the terms and conditions of labor employment for a construction project.

PLA permit owners to negotiate with construction unions on service terms. This involves terms like working hours and overtime pay, in an agreement before the workers being employed on the project.

Purpose of a Project Agreement

Project labor agreements are used on complicated construction projects that need many contractors. It is between the parties with the intent of regulating the terms and conditions of employment amongst every contractor and their laborers.

Key Terms of a Project Agreement

Project labor agreements attempt to improve project efficiency in a few ways:

  • Strike, or lockout or stoppage or interruption of labors is not permitted.
  • Union procedures administer hiring and the employees working outside under the same expertise must be represented by their corresponding labor association.
  • Schedules, as well as contract time provisions, are standardized, and it also enhances efficiency and diminishes troubles.
  • Rate of wages and fringe benefits are negotiated under the collective agreements.
  • Labor escalation clauses are prohibited in the Project Labor Agreement.
  • Dispute resolution methods, for instance, Alternative Dispute Resolution, Arbitration Procedures, or any other specific instruction, is presented as well as approved as an alternative method.
  • Safety requirements, as well as compliance, are also covered in the PLA’s

Inclusions in a Project Agreement

Parties involved: This agreement is made between two parties; the first party includes the labor unions, and the second is the owner or managing entity of a construction project.

Effective dates: This agreement would state the time when the deal starts and expires, if applicable

Drafting a Project Agreement

The most critical condition in PLAs is the unions agree not to strike or involve in any other troublemaking activities. Also, the contractor and their subcontractors agree not to lockouts during the construction project period.

Other terms of a project labor agreement contain:

  • Employer or contractor acknowledges towards a particular union or group of unions as the exclusive collective bargaining agents for each of the employees on the project.
  • A promise is made by the employer or contractor for hiring exclusively from union hiring halls. This implies that the union controlling the employee referral system might not discriminate depending on a worker’s union or non-union status
  • The new workers, within a specific period time, must pay dues to the union for representing their interests before the employer or contractor
  • Provisions related to management’s rights
  • Grievance procedures, wages, working hours, working conditions as well as schedules, includes whether work would take place on weekends and holidays.

Benefits of a Project Agreement

The benefits of project labor agreement are;

  • Give uniform wages, benefits, overtime pay, working hours, working conditions, and work rules for work on major construction projects
  • Give contractors a dependable and uninterrupted supply of qualified employees at predictable costs
  • Make sure that a project would be completed on time and budget. It is done owing to the supply of skilled labor and easiness of project management
  • Make certain no labor conflict takes place by prohibiting strikes and lockouts. This includes binding procedures to resolve labor disputes
  • Make large projects simple to manage by placing unions under a project labor agreement. It is preferable rather than dealing with several unions that might have different wage and benefit structures
  • It may comprise provisions to recruit and train employees by requiring contractors to participate in recruitment, apprenticeship, as well as training programs for women, minorities, veterans, and other under-represented groups.
  • Reduces misclassification of employees, and the related underpayment of payroll taxes, workers compensation, and other requirements
  • It intends to make the more significant percentage of construction wages stay in-state; and
  • It might improve worker safety by requiring contractors and employees to comply with project safety rules.

Types of a Project Agreement

Both public and private constructions projects use project labor agreements.

  • On private projects, the project owner makes the initial decision to enter into a project labor agreement. However, the owner might also give that decision towards its prime contractor.
  • On government contracts, federal regulations provide federal agencies the option to make use of the project labor agreements though state law differs on whether PLAs are optional or prohibited for the purpose by the state as well as local agencies.

What Happens When You Violate a Project Agreement?

This agreement permits the speedy resolution of disputes that arises during the project. In case there is a breach of contract, the matter must be resolved amicably. When the dispute cannot be resolved amicably, then the dispute shall be taken to the Court.

Sample Project Agreement Template

A sample of the agreement can be downloaded from below.

Download Project Agreement Template

Project Agreement

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