Whenever a contractor asks for money for labor before work has begun, I usually look for another contractor.  A contractor once told me that when he got paid in advance, it took the interest out of the job.  I took this to mean that I would not see him again or if I did I would not have any leverage in getting the job done with quality and on-time. 

I always try to get an agreement for a draw schedule before the contract is signed.  Then I pay for work done according to the draw schedule.  Almost every time that one of my clients let a contractor get ahead of the draw schedule, we have had trouble getting the contractor back on the job.

Is it normal for contractors in some parts of this country to ask for an advance on labor before the job has started?

When I get a down payment on a project, it doesn't take the interest out of the project, it takes the fear out of it.
The fear of not getting paid. The simple fact is, that I have spent enough of my own money learning that clients don't always like to pay their bills. I emphasize to my clients that I will not build their projects with my money. The down payment on labor is the same as a retainer for design or legal services.

When we were looking most of the HVAC contractors asked to pay for the equipment purchase up front or some percentage of the total estimate, or at least they wanted it before they made the purchase of the equipment. I didn't have a problem with that part, but pre paying for labor does seem odd.

I think that it depends on your economy. It takes some of the risk out of the job for the contractor. If labour is all that is being supplied I think that an upfront deposit is acceptable, although it should be less than someone supplying labour and material.

Alton;

I think what the guy meant was, he was already ahead of the game. Most likely the job is no longer his first priority and thus no incentive.

I am all for a deposit on an entire turnkey home or a deposit for SIP materials only, but when it comes to labor only, if the contractor doesn't have enough cash for 2 weeks of payroll, he needs to not be in business.
When it comes to a subcontractor needing to prchase materials - dual payee checks work great
A draw schedule is just fine, that way at certain intervals both parties will know when and how much