Prevailing Wages for Clean Energy and Solar Construction: What You Need to Know

The world of solar construction is seeing a shift as many companies are now subject to prevailing wage regulations and certified payroll reporting within the clean energy industry. This blog post breaks down the need-to-know details for solar contractors adjusting to these requirements.

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Understanding Prevailing Wage in Solar Construction

Prevailing wage refers to the average wage paid to similarly employed workers in a specific occupation within a particular area. This means solar contractors working on projects covered by the Davis-Bacon and Related Acts (DBRA) must pay their workers the prevailing wage for their specific job classification and location.

The Final Rule, released by the Department of Labor (DOL) in 2023, clarified that clean energy projects, including solar installations, are now subject to DBRA when funded by federal agencies. This change impacted companies previously exempt from these regulations.

Key points for solar contractors:

• Pay prevailing wage rates and fringe benefits to workers on qualifying projects.
• Submit weekly certified payroll reports to prove compliance.
• Classify workers accurately to ensure correct wage application.

Resources for further learning:

• DOL DBRA information: https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/wh347.pdf
• Finding wage determinations: https://sam.gov/

Certified Payroll Basics

Certified payroll is a system that ensures workers on prevailing wage projects receive the correct wages and benefits. Contractors submit certified payroll reports to the awarding agency, showcasing details like worker classifications, hourly rates, and fringe benefits paid.

Here’s how to get started:

1. Locate the correct wage determination: This document outlines the prevailing wage rates and fringe benefits for specific job classifications in your project’s region. You can usually find it on https://sam.gov/ or receive it from the contracting agency.
2. Classify workers accurately: Assign the appropriate job classification to each worker based on their tasks. This ensures they receive the correct prevailing wage.
3. Use a certified payroll service: Many companies offer certified payroll software or services to simplify the reporting process.

Navigating the New Solar Construction Prevailing Wage Landscape

While understanding prevailing wage and certified payroll might seem complex, it’s crucial for solar contractors working on federally funded projects. The DOL provides resources and guidance to help contractors navigate these regulations, including:

• Background information on DBRA and the Final Rule: https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/wh347.pdf
• Compliance materials and resources: https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/wh347.pdf

Additional Prevailing Wage Considerations

• State prevailing wage requirements: Over half of U.S. states have their own prevailing wage regulations. It’s crucial to research and comply with any applicable state laws.
• Tax credits and prevailing wage: The Inflation Reduction Act (IRA) offers tax credits for clean energy projects, but also requires contractors with four or more employees to use apprentices and pay them prevailing wages. See details at https://www.irs.gov/credits-deductions/prevailing-wage-and-apprenticeship-requirements.

Remember, prevailing wage regulations can vary depending on the project’s funding source and location. Thorough research and consulting with qualified professionals are essential to ensure compliance. By taking proactive steps like understanding the requirements and seeking guidance, solar contractors can navigate this evolving landscape successfully.

FAQs: Prevailing Wage and Certified Payroll for Solar Contractors

The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.