🏗️ Union Construction Guide
Union construction makes up roughly 30% of commercial construction in the US — and significantly more in certain markets (New York, Chicago, California, the Northeast). Whether you're a union signatory contractor or an open shop working alongside union trades, understanding how union construction works is essential.
Union agreements are contracts — read them. Every obligation, rate, and rule is spelled out in the Collective Bargaining Agreement (CBA). The contractors who succeed in union work are the ones who know their agreement inside and out.
How Union Construction Works
The Key Players
| Player | Role |
|---|---|
| Union (Local) | Represents workers. Negotiates wages, benefits, and working conditions. Dispatches workers through the hiring hall. |
| Contractor association | Represents contractors in bargaining. Negotiates the CBA on behalf of signatory contractors. |
| Signatory contractor | A contractor who has signed the CBA and agrees to its terms (wages, benefits, work rules). |
| Trust funds | Separate legal entities that manage fringe benefits (health, pension, training, vacation). |
| Joint apprenticeship committee (JAC) | Oversees apprenticeship training programs. Funded by training fund contributions. |
The Collective Bargaining Agreement (CBA)
The CBA (also called the "labor agreement" or "master agreement") covers:
| Section | What It Governs |
|---|---|
| Wages | Hourly rates by classification and tier |
| Fringes | Contribution rates to each trust fund |
| Hours | Standard workday, workweek, shift differentials |
| Overtime | When OT applies, rate multipliers |
| Holidays | Which days are paid holidays, premium rates |
| Hiring | Hiring hall procedures, referral rules |
| Jurisdiction | What work belongs to this trade |
| Apprentice ratios | Journeyman-to-apprentice ratios |
| Travel pay | Zone rates, subsistence, parking |
| Grievance procedure | How disputes are resolved |
| Duration | Start/end dates, reopener provisions |
Union Wage Rates
Union wages have two components: the journeyman scale (total package) and how it breaks down between cash and fringes.
Anatomy of a Union Rate
Using a typical Carpenter rate as an example:
| Component | Hourly Rate |
|---|---|
| Base wage (taxable) | $52.00 |
| Health & Welfare | $14.50 |
| Pension | $11.25 |
| Annuity/401(k) | $8.00 |
| Vacation/holiday | $4.50 |
| Training fund | $1.00 |
| Industry fund | $0.50 |
| JATC (apprenticeship) | $0.75 |
| Total package | $92.50 |
How Rates Are Set
- Union and contractor association negotiate a new CBA (typically every 3–5 years)
- The total package increase is agreed upon (e.g., $4.00/year)
- The union allocates the increase between cash wages and fringe funds
- Allocation may change annually within a multi-year agreement
- Contractors are notified of the new rates before the effective date
Rate Tiers
Some agreements have multiple tiers:
| Tier | Typical Use | Rate vs. Journeyman |
|---|---|---|
| Journeyman | Fully skilled worker | 100% |
| Foreman | Supervises crew | 105–115% of base |
| General Foreman | Supervises foremen | 110–120% of base |
| Apprentice | In training program | 40–90% (by period) |
| Pre-apprentice | Some trades allow | 60–70% |
Trust Funds & Fringe Reporting
What Are Trust Funds?
Trust funds are separate legal entities (not owned by the union or contractor) that manage worker benefits. Each fund has its own board of trustees — typically equal representation from labor and management.
| Fund | What It Provides |
|---|---|
| Health & Welfare | Medical, dental, vision insurance for workers and families |
| Pension | Defined benefit retirement (traditional pension) |
| Annuity / 401(k) | Defined contribution retirement (individual accounts) |
| Vacation / Holiday | Paid time off funds |
| Training / JATC | Apprenticeship and journeyman training programs |
| Industry fund | Market recovery, promotion, labor-management cooperation |
Monthly Trust Fund Reporting
Every signatory contractor must submit monthly trust fund reports showing:
- Each employee's name, SSN, and classification
- Hours worked in the reporting period
- Contribution amounts by fund
- Total hours and total contributions
- Payment for the total amount due
| Report Element | Details |
|---|---|
| Due date | Typically 15th–20th of the following month |
| Late penalties | Interest (often 10–18% annualized) + liquidated damages (10–20%) |
| Audit rights | Trust funds can audit your payroll records (typically every 2–3 years) |
| Personal liability | Company owners can be personally liable for unpaid contributions |
Trust funds have aggressive collection rights under ERISA (Employee Retirement Income Security Act). They can:
- Charge interest and liquidated damages
- Recover attorney's fees
- Audit your books going back 6 years
- Pierce the corporate veil for personal liability
- Report you to the union (which may pull your workers)
Late or missed trust fund payments are one of the fastest ways to lose your ability to work union.
Reciprocity
When workers travel between jurisdictions, reciprocal agreements allow their benefits to transfer:
- Hours worked in another local's area get reported to the home local trust funds
- The contractor pays into the local trust fund where the work is performed
- Trust funds transfer contributions between locals
- Not all locals have reciprocal agreements — verify before dispatching travelers
The Hiring Hall
How Dispatching Works
Union contractors get workers through the hiring hall:
- Contractor calls the hall with a manpower request (number, classification, start date)
- The hall dispatches workers from the out-of-work list (by seniority or rotation)
- Worker reports to the jobsite
- If the worker doesn't work out, contractor can send them back (per agreement terms)
- Contractor can also request specific workers by name (varies by agreement)
Name Calls vs. Hall Dispatch
| Method | How It Works | When to Use |
|---|---|---|
| Name call | You request a specific worker by name | When you want someone you've worked with before |
| Hall dispatch | The hall sends the next person on the list | When you need general manpower |
| Ratio | Some agreements require a ratio (e.g., 1 hall dispatch for every 2 name calls) | Per the CBA terms |
The best union contractors maintain relationships with good workers and name-call them repeatedly. Treat your union workforce like your team — even though technically they're dispatched through the hall. Workers want to work for good contractors too.
Jurisdictional Rules
What Is Jurisdiction?
Each trade union has jurisdiction over specific types of work. Jurisdiction defines what work their members perform — and it's one of the most contentious areas in union construction.
Common Jurisdictional Boundaries
| Work | Typically Claimed By |
|---|---|
| Wood framing | Carpenters |
| Metal stud framing | Carpenters (in most areas) |
| Drywall hanging | Carpenters or Painters (varies) |
| Drywall finishing/taping | Painters |
| Concrete formwork | Carpenters |
| Concrete placing | Laborers |
| Operating equipment | Operating Engineers |
| Rigging and signaling | Operating Engineers or Ironworkers (varies) |
| Welding (structural) | Ironworkers |
| Welding (pipe) | Pipefitters or Plumbers |
| Insulation | Insulators (Heat & Frost) |
| Demolition | Laborers |
| Site cleanup | Laborers |
Jurisdictional Disputes
When two trades claim the same work:
- Try to resolve it between the two business agents on site
- If unresolved, submit to the Impartial Jurisdictional Disputes Board (IJDB) or use the CBA's grievance process
- Past practice, area standards, and trade agreements all factor into decisions
- Never stop work over a jurisdictional dispute — keep working and resolve it through the process
Assigning work to the wrong trade can result in a grievance and a requirement to pay the aggrieved trade for the hours worked by the other trade — meaning you pay for the work twice. Know your local jurisdictional agreements.
Union Dues and Assessments
Types of Deductions
| Deduction | What It Is | Typical Amount |
|---|---|---|
| Working dues | Percentage of gross wages deducted from worker's pay | 2–6% of gross |
| Initiation fee | One-time fee to join the union (paid by worker) | $200–$1,000+ |
| Assessments | Special assessments for building funds, political action, etc. | Varies |
Dues Check-Off
- Contractor deducts working dues from worker's paycheck
- Contractor remits dues to the union monthly
- Worker must sign an authorization card allowing deduction
- Report format varies by local — usually name, SSN, hours, gross wages, dues amount
Working Union as an Open Shop Contractor
Some open shop contractors take on union projects. Options include:
Project Labor Agreement (PLA)
A PLA is a pre-hire agreement that applies to a specific project:
- All contractors on the project agree to union terms for that project only
- Workers are sourced through the hiring hall
- Prevailing wage and benefits apply
- You don't become a permanent signatory
Double-Breasted Operations
Some contractors maintain both union and non-union operations:
- Separate legal entities
- Separate management
- Must genuinely be separate — the NLRB scrutinizes these arrangements
- Consult a labor attorney before setting this up
Key Union Organizations by Trade
| Trade | Union | Abbreviation |
|---|---|---|
| Carpenters | United Brotherhood of Carpenters | UBC |
| Electricians | International Brotherhood of Electrical Workers | IBEW |
| Plumbers & Pipefitters | United Association | UA |
| Laborers | Laborers' International Union of North America | LIUNA |
| Operating Engineers | International Union of Operating Engineers | IUOE |
| Ironworkers | International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers | Ironworkers |
| Sheet Metal | International Association of Sheet Metal, Air, Rail and Transportation Workers | SMART |
| Painters | International Union of Painters and Allied Trades | IUPAT |
| Teamsters | International Brotherhood of Teamsters | IBT |
| Bricklayers | International Union of Bricklayers and Allied Craftworkers | BAC |
| Insulators | International Association of Heat and Frost Insulators | Insulators |
| Elevator Constructors | International Union of Elevator Constructors | IUEC |
| Roofers | United Union of Roofers, Waterproofers and Allied Workers | Roofers |
Best Practices for Union Contractors
Do
- Know your CBA inside and out — especially overtime, holidays, and shift rules
- Pay trust fund contributions on time, every time
- Maintain good relationships with business agents and stewards
- Name-call your best workers to build consistent crews
- Attend labor-management meetings and association events
- Track jurisdictional assignments carefully
- Keep impeccable payroll records — trust fund audits are thorough
Don't
- Don't fall behind on trust fund payments — the penalties are severe
- Don't ignore jurisdictional rules — double payments are expensive
- Don't try to bypass the hiring hall without understanding the dispatch rules
- Don't assume one local's rules apply everywhere — agreements vary significantly
- Don't neglect apprentice ratio requirements — violations trigger grievances
- Don't mix union and non-union workers on the same project (unless the CBA allows it)
Related Resources
- Worker Classifications — Trade classifications and apprentice tiers
- Fringe Benefits in Construction — Understanding trust fund contributions
- Prevailing Wage Guide — Prevailing wage and union rates overlap
- Apprenticeship Programs — Union and non-union apprenticeship
- Certified Payroll Guide — Reporting requirements