Clean Energy and Prevailing Wage – An Important and Unlikely New Pairing
The Inflation Reduction Act (IRA) has brought prevailing wage and clean energy together. The IRA includes nearly $270 billion for incentives and tax credits to encourage acceleration of efforts to implement clean energy initiatives. Yet, in order to receive these benefits, businesses must ensure that people working on their projects are being paid the prevailing wage.
Combining these concepts is intended to have positive benefits for both the economy and environment and ensure those working and living in the communities where these initiatives are being implemented will benefit. Each project is required to pay its workers a prevailing wage and employ a certain number of apprentices so that these project investments also train workers for the future.
To be eligible for the tax credits, a business must document that its workers are being paid appropriately and affirm that they have the appropriate number of apprentices The reality is most organizations haven’t done this well and are intimidated to try. This post can de-mystify this issue and help get the projects and tax credits rolling for your initiatives.
Prevailing wage is often used in construction projects to ensure that workers are being paid wages that are comparable to what others are being paid in the region for the same type of work. There is a usually a wage determination for your geographic area, along with corresponding job classifications, and this information can be found at the Department of Labor’s sam.gov website. By coordinating with the local government offices, you will find guidance about the apprentice to journeyman ratio for each project, as well as information on the recordkeeping and reporting requirements. Having the right tools can make this very straightforward, even if you or your clients haven’t managed prevailing wage projects before.
At SkillSmart, our InSight technology is designed to ease challenges in the data collection and project management process. By deploying our platform for one or multiple projects, InSight can:
- identify the wage classifications for you,
- capture and review your payroll information each week to ensure that all of your vendors and contractors are paying subcontractors appropriately,
- document your apprentices and workforce demographic data,
- allow you to monitor and project manage this real-time information in your dashboard,
- automatically generate a formatted report that demonstrates progress toward tax credit requirements.
At SkillSmart we are interested in working with partners focused on doing well while doing good. If you or your clients are pursuing these enhanced clean energy and climate tax incentives and want help simplifying the prevailing wage requirements, please connect with us at www.skillsmart.us