The Inflation Reduction Act’s Apprenticeship Requirements mandate that a certain percentage of labor hours on qualifying projects be performed by registered apprentices, promoting workforce development and providing valuable training opportunities in the clean energy sector.
The DOL’s Office of Apprenticeship, as well as state apprenticeship agencies, routinely provide technical expertise on registered apprenticeship program matters, including identifying registered apprenticeship programs, and assisting employers seeking to register their own programs. More information on finding qualified apprentices is available at ApprenticeshipUSA.
Under the final regulations, apprentices must be paid at not less than the rate specified by the registered apprenticeship program for the apprentice’s level of progress expressed as a percentage of the journeyworker hourly rate specified for the apprentice’s classification in the applicable wage determination. Apprentices may be paid at less than the prevailing rate for work performed consistent with the occupation of the registered apprenticeship program if they are:
1. Qualified apprentices from a registered apprenticeship program who perform work with respect to the construction, alteration, or repair of a qualified facility; or
2. Individuals in the first 90 days of probationary employment as an apprentice in a registered apprenticeship program who have been certified by the DOL’s Office of Apprenticeship or a state apprenticeship agency to be eligible for probationary employment as an apprentice.
In order to pay apprentices at wage rates less than the prevailing rates, the applicable apprentice-to-journeyworker ratio must be met for each day the apprentices perform work on the facility. Additionally, to satisfy the prevailing wage requirements, apprentices must be paid bona fide fringe benefits in accordance with the provisions of the registered apprenticeship program. If the registered apprenticeship program does not specify the payment of bona fide fringe benefits, apprentices must be paid the full amount of bona fide fringe benefits listed on the wage determination for the applicable classification in cash or in kind.
Under the Good Faith Effort Exception, taxpayers are deemed to satisfy the apprenticeship requirements if they have requested qualified apprentices from a registered apprenticeship program and either:
1. The request was denied for reasons other than the taxpayer, contractor, or subcontractor’s refusal to comply with the established standards and requirements of the registered apprenticeship program, or
2. The registered apprenticeship program failed to respond within five business days of receiving a request.
If the taxpayer, contractor, or subcontractor submits a valid, written request for apprentices to a registered apprenticeship program and the request is denied or not responded to, the taxpayer will be deemed to have exercised a Good Faith Effort with respect to the request for the period described in the request, but not exceeding 365 days (366 days in case of a leap year). The Good Faith Effort Exception only applies to the specific portion of the request for apprentices that was not responded to or was denied. The taxpayer will not be deemed to have exercised a Good Faith Effort beyond 365 days (366 days in case of a leap year) of a previously denied request unless the taxpayer submits an additional request.
Taxpayers, contractors, or subcontractors must submit a written request for qualified apprentices to at least one registered apprenticeship program which:
1. has a geographic area of operation that includes the location of the facility;
2. trains qualified apprentices in the occupation(s) needed to perform construction, alteration, or repair with respect to the facility; and
3. has a usual and customary business practice of entering into agreements with employers for placement of apprentices in the occupation for which they are training, consistent with the standards and requirements set forth in 29 CFR parts 29 and 30, and any subsequent guidance issued by the Department of Labor.
The request must be in writing and sent electronically or by registered mail. The written request must include the proposed dates of employment, occupation of qualified apprentices needed, location of the work to be performed, number of apprentices needed, the number of labor hours to be performed by the apprentices, and the name and contact information of the taxpayer, contractor, or subcontractor requesting employment of qualified apprentices from the registered apprenticeship program. Reasonable estimates are permissible.
The request must also state that the request for qualified apprentices is made with an intent to employ the qualified apprentices in the occupation for which they are being trained and in accordance with the requirements and standards of the registered apprenticeship program and to employ the qualified apprentices consistent with the number of hours and dates of employment specified in the request. If the employer of the requested qualified apprentices is not the same as the taxpayer, contractor, or subcontractor submitting the request for qualified apprentices, then the request must include the name of the employer.
The Initial request to a registered apprenticeship program for qualified apprentices must be made no later than 45 days before the qualified apprentices are requested to start work. Any subsequent requests for qualified apprentices made to the same registered apprenticeship program after the initial request must be made no later than 14 days before the qualified apprentices are requested to start work.
In order to satisfy the Good Faith Effort Exception, taxpayers, contractors, or subcontractors need to submit a request for qualified apprentice to at least one registered apprenticeship program. While it may be possible for a taxpayer to satisfy all the apprenticeship requirements from one apprenticeship program, it is likely that given the multiple occupations involved in the construction, alteration, or repair of a facility, a taxpayer, contractor, or subcontractor will need to request apprentices from more than one apprenticeship program. This is in part because a registered apprenticeship program typically trains apprentices in a single occupation, whereas more than one occupation will be needed to meet the apprenticeship requirements.
If there is no registered apprenticeship program with a geographic area of operation that includes the location of the facility, taxpayers may be deemed to satisfy the Good Faith Effort Exception for the apprentices they (or the contractor or subcontractor) would have requested for that occupation. A taxpayer, contractor, or subcontractor that cannot locate a registered apprenticeship program with an area of operation that includes the location of the facility should consider contacting the DOL’s Office of Apprenticeship or relevant State apprenticeship agency for assistance in locating a program.
If the taxpayer, contractor, or subcontractor submits a request as described in Q/A 4 and the request is denied or not responded to, the taxpayer will be deemed to have exercised a Good Faith Effort with respect to the request for a period described in the request but not exceeding 365 days (366 days in case of a leap year) from the date of the request. The taxpayer will not be deemed to have exercised a Good Faith Effort beyond 365 days (366 days in case of a leap year) of a previously denied request unless the taxpayer submits an additional request.
There is no limit on the number of requests a taxpayer, contractor, or subcontractor may submit to one or more registered apprenticeship programs for purposes of being deemed to have exercised a Good Faith Effort. Additionally, a taxpayer, contractor, or subcontractor is not required to make subsequent requests to the same registered apprenticeship program in order to qualify for the Good Faith Effort Exception.
If the registered apprenticeship program fails to respond to a valid request within five business days after the date on which such registered apprenticeship program received the taxpayer’s (or its contractor or subcontractor) request, then such request is deemed to be denied. A valid response to a request for qualified apprentices is a substantive written reply that agrees, in part or in whole, to the specific requirements in the request.
A registered apprenticeship program’s response that it can partially fulfill the request in the occupation(s) for which it trains qualified apprentices does not constitute a denial of the request with respect to the parts of the request that can be fulfilled. The parts of the request that were denied because they cannot be fulfilled will qualify a taxpayer for the Good Faith Effort Exception with respect to the portion of the request which was denied if the taxpayer, contractor, or subcontractor accepts the requested apprentices that can be fulfilled and the other requirements for the Good Faith Effort exception have been met.
