A Project Labor Agreement, more commonly referred to as PLA, is a pre-hire, collective bargaining agreement with one or more labor organizations to establish the terms and conditions of employment for a specific construction project.
A PLA is designed to allow the employer and unions to negotiate on terms of employment, including pay, benefits, hours, leave, and safety policies. It allows a company to hire qualified construction workers and guarantees labor stability on a construction project. Each PLA is designed to tailor the needs of a certain project owner or manager.
Not only do PLAs guarantee labor stability on a construction project, but they also increase the efficiency and productivity of workers by ensuring all issues are dealt with prior to the start of the project.
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. By entering into a PLA, a government or company will ensure only highly skilled and highly trained members of the building trades will work on their project. This ensures the work is done correctly the first time, which helps lower costs by eliminating 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 that PLAs decrease the number of bidders on a project or increase the costs of construction projects. 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 that many large companies and increasingly use PLAs to reduce some of the uncertainties of large-scale or complex construction projects.