What does the Inflation Reduction Act (IRA) require for apprenticeships?
The IRA requires that a percentage of total construction labor hours on qualifying projects be performed by registered apprentices. Apprentix helps you meet this requirement.
How does Apprentix help me satisfy the apprenticeship requirement?
Apprentix helps non-union shops by providing them a nationwide, affordable, and fully compliant registered apprenticeship sponsor with the U.S. Department of Labor (DOL).
How many hours must be worked by apprentices to meet the IRA requirement?
At least 15% of total construction labor hours must be performed by registered apprentices for qualifying projects (e.g renewable energy projects over 1MW).
Do I need to hire apprentices directly?
Yes, all apprentices must be W2 employees. If you are using 1099 labor, the people you convert into apprentices must become W2 employees. You can either employ apprentices directly by converting existing workers into apprentices, or you can work with subcontractors that use registered apprentices through Apprentix.
Can I call anyone an apprentice or do they need to be registered?
Only registered apprentices in Dept. of Labor-approved programs meet the IRA requirement. Apprentix ensures all apprentices we support are officially registered.
What happens if I don’t meet the apprenticeship requirement?
Projects that fail to meet the IRA apprenticeship requirement may lose access to enhanced tax credits. You may also face penalties unless a good faith effort is accurately documented.
Do we have to meet the 15% apprentice labor hours requirement on a daily, weekly, monthly, or project basis?
The 15% apprentice labor hours requirement is measured across the entire project. That said, apprentice hours only count when you’re meeting the ratio requirement and that’s measured on a daily basis where every minute of an apprentice’s time must be matched by a journeyman.
If we have 1 journeyman and 3 apprentices on a given day, are we fine as long as the apprentices are being paid the prevailing wage for the work they are doing?
Yes, if you're unable to meet the ratio requirement on a given day, then the fallback option is to pay the apprentice the journeyman's wage for that day. However, the implication is that the apprentice's hours don't count towards your 15% requirement since those apprentices are actually counted as journeymen on those days. To get credit towards the IRA's 15% apprentice requirement, you need to meet the 1:1 ratio requirement.