IRA / Prevailing WageOctober 20264 min read

IRS Finalizes Prevailing Wage and Apprenticeship Rules for IRA Tax Credits

The IRS has issued final regulations clarifying prevailing wage and apprenticeship requirements for projects claiming enhanced clean energy tax credits under the Inflation Reduction Act. Key changes affect how contractors document good-faith efforts to hire apprentices and what records must be retained for IRS audit purposes.

The IRS released final regulations under Treasury Decision 10000 addressing the prevailing wage and apprenticeship (PWA) requirements that apply to projects claiming the full 30% Investment Tax Credit and other enhanced clean energy credits under the Inflation Reduction Act. The final rules largely follow the proposed regulations issued in 2023 but include several important clarifications for contractors and project owners.

Under the final rules, contractors must pay Davis-Bacon prevailing wages to all laborers and mechanics on qualifying projects and must ensure that a minimum percentage of total labor hours are performed by registered apprentices — 10% for projects beginning construction in 2023, 12.5% in 2024, and 15% thereafter. The final regulations clarify that the apprenticeship requirement applies separately to each trade and occupation, not just to the project as a whole.

Critically, the final rules also address the 'good-faith effort' exception: if a contractor requests apprentices from a registered apprenticeship program and the program is unable to supply them within five business days, the contractor may satisfy the requirement without meeting the numerical ratio. However, contractors must document each such request and the program's response, and must make a new request for each project phase. The IRS has indicated it will scrutinize good-faith effort claims closely in audits.

Contractors who fail to meet the PWA requirements face a reduction in their tax credit from 30% to 6%, plus correction payments of back wages and interest. Willful violations carry an additional penalty of $5,000 per affected worker per year. The final regulations are effective for projects beginning construction on or after the date of publication in the Federal Register.

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Davis-BaconSeptember 20263 min read

DOL Issues Updated Davis-Bacon Wage Determinations for Q4 2026

The Department of Labor has published its quarterly update to Davis-Bacon prevailing wage determinations, with notable increases in several construction trades across the Midwest and Southeast. Contractors with active federally funded projects should review their certified payrolls immediately.

The U.S. Department of Labor's Wage and Hour Division has published updated prevailing wage determinations under the Davis-Bacon and Related Acts (DBRA) for the fourth quarter of 2026. The updates reflect survey data collected from contractors and unions across the country and include wage rate increases in a number of trades and geographic areas.

Contractors on active federally funded construction projects are required to pay the prevailing wage rates in effect at the time the contract was awarded — but when a contract is modified or extended, the updated rates may apply. Project owners and prime contractors should review their contract terms carefully to determine whether the Q4 2026 determinations affect their current obligations.

Notable increases in this update include carpenter and electrician rates in Ohio, Indiana, and Kentucky, as well as ironworker rates in Georgia and Florida. Contractors in these states with active DBRA projects should compare their current payroll rates against the new determinations and issue retroactive corrections if underpayments are identified — before the DOL does.

Under the 2023 Davis-Bacon Final Rule, the DOL also has expanded authority to investigate and debar contractors for repeated or willful violations. Contractors who self-identify and correct underpayments proactively are treated more favorably in enforcement proceedings than those whose violations are discovered through complaint or audit. If you have questions about whether the Q4 updates affect your project, contact our team for a payroll review.

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California DIRAugust 20264 min read

California DIR Raises Prevailing Wage Rates Effective August 2026

The California Department of Industrial Relations has issued its semi-annual prevailing wage rate update, effective August 22, 2026. Rates for several key construction trades have increased significantly in Los Angeles, San Francisco, and Sacramento counties. All contractors with active California public works projects must update their certified payrolls immediately.

The California Department of Industrial Relations (DIR) has published its semi-annual prevailing wage determination update, effective August 22, 2026. California updates prevailing wage rates twice yearly — in February and August — and contractors on public works projects are required to pay the new rates for all work performed on or after the effective date, regardless of when the contract was awarded.

This cycle's update includes significant increases for electricians, plumbers, and operating engineers in Los Angeles, San Francisco, Alameda, and Sacramento counties. Carpenters and laborers in San Diego and Riverside counties also saw above-average increases. Contractors working in these areas should update their payroll systems immediately and verify that all subcontractors have done the same.

California's prevailing wage rates are set independently from federal Davis-Bacon rates and are typically higher. On projects subject to both California and federal requirements — such as federally funded public works or IRA-qualifying solar installations — contractors must pay the higher of the two rates for each classification. The August 2026 update widens this gap in several trades, meaning some contractors who were previously paying the federal rate may now need to increase wages to meet the California floor.

Failure to pay the updated rates triggers DLSE enforcement, including civil penalties of $200 per worker per day of underpayment plus back wages and interest. The DIR's eCPR system will flag certified payrolls that reflect rates below the new determinations, so contractors can expect increased scrutiny on submissions filed after August 22. Our team is available to review your current payroll rates and help you transition to the updated determinations.

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ApprenticeshipJuly 20264 min read

DOL Expands Registered Apprenticeship Programs for Clean Energy Trades

The Department of Labor has announced a major expansion of registered apprenticeship programs in solar, wind, and energy storage trades — a direct response to demand created by the IRA's apprenticeship utilization requirements. Here's what contractors need to know about finding qualifying programs for their projects.

The U.S. Department of Labor's Employment and Training Administration has announced the registration of more than 200 new apprenticeship programs in clean energy trades since the Inflation Reduction Act's apprenticeship utilization requirements took effect. The expansion covers solar photovoltaic installation, wind turbine technician, battery storage systems, and energy efficiency retrofitting — trades that previously had limited registered program availability in many states.

For contractors claiming IRA tax credits, this expansion is significant. The IRA's 'good-faith effort' exception — which allows contractors to satisfy the apprenticeship requirement if a registered program cannot supply apprentices within five business days — has been harder to invoke as program availability has grown. Contractors who relied on the good-faith exception in 2023 and 2024 may find it more difficult to qualify going forward, particularly in states where new programs have recently been registered.

The DOL's Registered Apprenticeship Partners Information Data System (RAPIDS) database is the authoritative source for finding qualifying programs. Contractors should search RAPIDS by state and occupation before beginning work on any IRA-qualifying project to identify available programs and initiate contact. The five-business-day clock for the good-faith effort exception begins when the contractor makes a written request to a registered program — not when work begins.

In California, the Division of Apprenticeship Standards (DAS) maintains its own registry of approved programs, which must be used for California public works apprenticeship requirements. California's requirements are separate from and in addition to the federal IRA requirements, and the two sets of rules must be tracked independently. Our team monitors both federal and state apprenticeship program availability and can help you identify qualifying programs for your specific project location and trades.

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Davis-BaconJune 20265 min read

What the 2023 Davis-Bacon Final Rule Means for Contractors in 2026

The DOL's sweeping 2023 overhaul of the Davis-Bacon regulations continues to reshape compliance obligations for federal contractors. Three years in, here's a practical summary of the most impactful changes and how they affect your certified payroll and wage determination practices today.

The Department of Labor's 2023 Davis-Bacon Final Rule — the most significant overhaul of the regulations in 40 years — has now been in effect long enough for contractors to feel its full impact. Three years on, several provisions continue to generate compliance questions, particularly around the expanded definition of 'site of work,' the new anti-retaliation protections, and the updated wage survey methodology.

One of the most practically significant changes is the expansion of the 'site of work' definition to include certain off-site fabrication facilities. Under the 2023 rule, workers at facilities that are dedicated to a specific federal project — even if located away from the construction site — may be covered by Davis-Bacon prevailing wage requirements. This has particular implications for modular construction, prefabricated components, and solar panel assembly operations.

The 2023 rule also strengthened anti-retaliation protections for workers who raise prevailing wage complaints, and expanded the DOL's authority to debar contractors for violations. Under the updated debarment provisions, a contractor can be debarred for three years for a single willful violation — down from the previous standard that generally required a pattern of violations. The DOL has used this authority in several high-profile cases since 2024.

Finally, the 2023 rule updated the wage survey methodology used to set prevailing wage determinations, moving toward a system that more frequently reflects current market wages. This means wage determinations are being updated more often and by larger amounts than under the previous methodology. Contractors should build regular prevailing wage determination reviews into their project management process — not just at contract award, but throughout the project lifecycle.

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California DIRMay 20264 min read

California eCPR System Updates: What's New for 2026 Submissions

The California DIR has rolled out several updates to its eCPR electronic certified payroll reporting system for 2026, including new validation rules, updated worker classification codes, and changes to the fringe benefit reporting fields. Here's what contractors need to know before their next submission.

The California Department of Industrial Relations has released a series of updates to its Electronic Certified Payroll Reporting (eCPR) system, effective for all submissions filed on or after January 1, 2026. The updates are designed to improve data accuracy and reduce the number of deficiency notices issued by the DLSE, but they also introduce new validation rules that may cause previously accepted submissions to be flagged.

The most significant change is the addition of new worker classification codes for emerging construction trades, including solar photovoltaic installer, energy storage technician, and electric vehicle charging infrastructure installer. Contractors who have been using the generic 'electrician' or 'laborer' classifications for workers in these roles should update their eCPR submissions to use the new codes, which carry their own prevailing wage determinations.

The 2026 updates also include enhanced validation of fringe benefit reporting fields. The eCPR system will now cross-reference reported fringe benefit contributions against the applicable prevailing wage determination to flag potential underpayments. Contractors who pay fringe benefits through a combination of cash and benefit plan contributions should ensure their eCPR submissions accurately reflect the split — the system will no longer accept lump-sum fringe benefit entries without a breakdown.

Finally, the DIR has updated the eCPR system's apprenticeship reporting fields to capture additional data on apprenticeship program registration numbers and the ratio of apprentice to journeyman hours by trade. This data will be used by the Division of Apprenticeship Standards to monitor compliance with California Labor Code Section 1777.5. Contractors should verify that their apprenticeship program registration numbers are current and correctly entered in the eCPR system before their next submission.

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