Frequently Asked Questions

PWA requirements apply to solar, wind, battery storage, and other clean energy projects that seek the full tax credit value (30%) under the IRA. For projects with a capacity of 1 MW or greater started after January 29, 2023, meeting PWA requirements is necessary to receive the full tax credit value.

Prevailing Wage and Apprenticeship requirements are labor standards established under the Inflation Reduction Act (IRA) that must be met to qualify for the full tax credit value on renewable energy projects. Prevailing Wage ensures workers receive locally competitive wages, while Apprenticeship requirements mandate that a percentage of labor hours be performed by qualified apprentices. Meeting these requirements can increase available tax credits by up to 400% on eligible clean energy projects.

While both establish minimum wage standards, Davis-Bacon applies specifically to federally funded construction projects, whereas IRA prevailing wage requirements apply to clean energy projects seeking enhanced tax credits. The IRA requirements reference Davis-Bacon wage determinations but apply to private projects that would otherwise not be subject to these standards. The IRA framework also adds apprenticeship requirements not found in traditional Davis-Bacon regulations.

Yes, PWA requirements extend to the construction, alteration, and repair of the facility, including O&M activities performed within a specified period (generally 5-10 years depending on the type of project). Any workers performing maintenance or repairs on eligible facilities must be paid prevailing wages if the project claims the increased tax credit.

Proper documentation includes certified payroll records (similar to WH-347 forms), apprenticeship certifications, detailed time tracking of all labor hours (both journeyworker and apprentice), wage determinations applicable to the project location, and evidence of good faith efforts to meet apprenticeship requirements if applicable. Records must be maintained for at least 5 years after the project completion.

Non-compliance penalties are substantial. They include potential disqualification from the additional tax credit value (10-20% of project cost), payment of back wages with interest, and additional penalties of up to $5,000 per worker for willful violations. Repeated violations can result in debarment from future federal contracts and potential False Claims Act liability if tax credits were improperly claimed.

Worker classification must match the actual work performed, not just job titles. The Department of Labor's wage determinations list classifications by county and type of construction. Each worker should be classified based on the primary duties they perform. If a worker performs multiple duties across different classifications, detailed time records must be kept, and the appropriate prevailing wage must be paid for each type of work performed.

A certified payroll report is a weekly payroll document that contractors and subcontractors must submit to verify prevailing wage compliance. It includes employee information, classification, hours worked, rates of pay, gross wages, deductions, and net wages. The report must be certified by a company representative attesting to its accuracy. While the IRA doesn't specifically require Form WH-347, using this format ensures all necessary information is included and properly organized.

The IRA requires that a certain percentage of total labor hours for construction, alteration, or repair work be performed by qualified apprentices from registered apprenticeship programs. The required percentages are: 10% for projects that began construction in 2022, 12.5% for 2023, and 15% for 2024 and beyond. Additionally, each contractor or subcontractor employing four or more individuals for project work must employ at least one qualified apprentice.

A qualified apprenticeship program must be registered with the U.S. Department of Labor's Office of Apprenticeship or a State Apprenticeship Agency recognized by the DOL. These programs combine on-the-job training with related technical instruction and result in industry-recognized credentials. Programs must meet specific standards regarding curriculum, supervision, progressively increasing wages, and safety training.

Good faith efforts include documented requests to apprenticeship programs for certified apprentices that either went unanswered or were denied within 5 business days. Documentation should include dated written requests to at least two apprenticeship programs, responses received (or notation of no response), and records of any alternative steps taken to secure apprentices. These records must be maintained as part of your compliance documentation.

Tracking requires detailed daily time records that distinguish between journeyworker and apprentice hours. These records should include the apprentice's name, registration number, program affiliation, classification, hours worked, and tasks performed. Calculate the percentage by dividing total qualified apprentice labor hours by total labor hours for construction, alteration, or repair work. Reporting should be incorporated into your regular certified payroll process.

PWA compliance typically adds 15-30% to labor costs and extends administrative timelines. Budget impacts include higher direct labor rates, additional fringe benefits, administrative costs for compliance tracking, and potential training costs. Timeline impacts include time for worker classification, securing apprentices, developing documentation systems, and potential delays if labor shortages occur in certain classifications. These factors should be incorporated into early project planning and bidding processes.

Yes, all contractors and subcontractors performing construction, alteration, or repair work on qualifying projects must comply with both prevailing wage and apprenticeship requirements. The primary contractor (EPC) is responsible for ensuring all subcontractors understand and adhere to these requirements. Subcontractor compliance should be explicitly addressed in contracts, and systems should be established to collect and verify their certified payroll records and apprenticeship documentation.

Specialized PWA compliance software can automatically track prevailing wage rates by location, generate certified payroll reports, validate worker classifications, calculate proper wages including overtime and fringe benefits, monitor apprenticeship ratios, flag potential compliance issues in real-time, and maintain secure records for audit purposes. These solutions reduce the operational burden of tracking compliance and provide documentation that can withstand regulatory scrutiny.

Essential features include: automated wage determination lookup by project location, certified payroll report generation, apprenticeship ratio tracking and reporting, multi-state and multi-jurisdiction capability, subcontractor management tools, document storage and retrieval, automatic updates to wage determinations, audit trail functionality, integration capabilities with existing systems, customizable alerts for potential violations, and user-friendly interfaces for field personnel.

Key resources include the U.S. Department of Labor's prevailing wage resource website, IRS and Treasury Department guidance on IRA implementation, state apprenticeship agencies, industry associations like SEIA and AWEA, specialized renewable energy law firms, and PWA compliance solution providers. Regular training and consultation with specialized counsel are recommended to stay current with evolving interpretations and enforcement priorities.

When both state and federal prevailing wage requirements apply to a project, contractors must comply with the more stringent standards in each category. This requires careful comparison of wage rates, fringe benefit treatment, apprenticeship requirements, and reporting obligations. Some states have more comprehensive prevailing wage frameworks or different construction classifications than federal determinations, requiring integrated compliance strategies.