The Inflation Reduction Act (IRA) requires contractors to use registered apprentices for a percentage of total construction labor hours on qualifying projects. This ensures workforce development and compliance with federal standards.
What the Rule Requires
At least 15% of total construction labor hours must be performed by registered apprentices.
This requirement applies to projects seeking IRA tax credits.
How Hours Are Counted
Total construction labor hours include all W-2 workers performing physical construction work.
Registered apprentice hours are counted only if:
The apprentice is formally registered in a U.S. DOL-approved program.
The 1:1 apprentice-to-journeyman ratio is met on the day those hours are worked.
If the ratio is not met, the apprentice must be paid journeyman wages for that day, but the hours do not count toward the 15% requirement.
Example Calculation
If a project logs 100,000 total labor hours, then:
At least 15,000 hours must be performed by registered apprentices.
These 15,000 hours must also satisfy the ratio requirement on the days worked.
Why It Matters
Failing to meet the 15% requirement risks loss of enhanced IRA tax credits.
Penalties may also apply ($50–$500 per noncompliant hour).
Tracking hours weekly in Apprentix ensures you stay on pace throughout the project.
Best Practices
Add apprentices early in the project to accumulate hours consistently.
Use Apprentix to log hours weekly and cross-check with payroll.
Run monthly reports to measure progress toward the 15% target.
Don’t rely on a late surge of apprentice hours near project completion—it increases compliance risk.