Prevailing Wage Requirements
The prevailing wage requirements under the Inflation Reduction Act (IRA) and the Davis-Bacon Act dictate that all laborers and mechanics employed on the construction, alteration, or repair of a qualified facility must be paid at rates not less than the prevailing wages for their geographic area. These rates are typically determined by the U.S. Department of Labor based on the majority wage paid in the area or the average wage if no single wage is paid to more than 50% of workers in a given classification.
Key Points for Prevailing Wage Requirements:
- Applicable Personnel: Laborers and mechanics, including helpers, but excluding administrative, executive, or clerical staff.
- Wage Determination: Prevailing wages are based on the Davis-Bacon Act for federal projects and similar state laws for state projects.
- Liability: Taxpayers claiming increased credits must ensure prevailing wages are paid to workers, including those employed by contractors and subcontractors.
- Penalties: Failure to comply may result in penalties, although these can be mitigated if corrections are made promptly.
Apprenticeship Requirements
The apprenticeship requirements under the IRA include three primary components: labor hours, ratio, and participation.
Key Points for Apprenticeship Requirements:
- Labor Hours Requirement:
- For construction starting before 2023: 10% of labor hours must be performed by qualified apprentices.
- For construction starting in 2023: 12.5%.
- For construction starting in 2024 or later: 15%.
- Ratio Requirement: Each day, the ratio of apprentices to journeyworkers must meet the standards set by the registered apprenticeship program from which the apprentices are hired.
- Participation Requirement: Any employer with four or more workers must hire at least one qualified apprentice during the project.
Additional Considerations:
- Qualifying Apprentices: Only participants in registered apprenticeship programs qualify.
- Penalties: Failure to meet these requirements can result in penalties unless a good-faith exception applies, such as requesting apprentices and being unable to obtain them.
- Record Keeping: Detailed records must be maintained to demonstrate compliance with both prevailing wage and apprenticeship requirements.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-specific-requirements-for-the-prevailing-wage-and-apprenticeship-provisions/
