Unlocking Tax Incentives: How illu can help with prevailing wage compliance

illu
4 min readFeb 24, 2023

The Inflation Reduction Act (IRA) aims to transform clean energy production in the US and create an estimated 9 million jobs in the sector. To achieve this, reskilling and upskilling efforts in the clean energy sector will be essential. Teams looking to tap into the IRA’s programs will need to adjust to meet expanded requirements and ensure that their operations are compliant. This can be complicated, but we are here to shed some light on how illu can help you tap into this opportunity.

Photo credit: Los Muertos Crew

A major pillar of the new law is enforcing key labor and equity standards. There are a number of policy tools that target the creation of good quality jobs and build pathways for workforce entry. The new tax credits (see Footnote) and incentives for qualifying clean energy projects through the IRA are contingent on meeting the labor standards defined through these tools. We’ll focus on one provision: Prevailing Wage.

Breaking Down Prevailing Wage

Prevailing Wage establishes a wage floor for each occupation on a project. It is a combination of the basic hourly wage rate and any fringe benefits paid to workers for work performed, independent of employment status (i.e. employee or independent contractor). While the IRA does not appear to require certified payroll to be submitted to the U.S. Department of Labor, it still creates a new need for project owners to determine & document workers’ time and compensation to defend compliance, in the event of an audit.

Just as design requirements change from project to project, prevailing wage requirements can change as well. It’s important to understand what conditions impact the set prevailing wage and how to track compliance. The Prevailing Wage, searchable here, for any given worker is determined based on the location of the project (County and State) and the classification of their work. Record keeping is essential to ensure compliance but needs to be implemented with sufficient flexibility to make sure you are meeting requirements across project types & locations.

How illu can help

illu can help ensure that your company meets the new prevailing wage requirements using Workflows, a highly intuitive and flexible way to direct and document any kind of work task. Workflows are fully customizable and can be deployed alongside other processes during project implementation.

Let’s look at an example.

Samantha is a project manager for Solar Life Inc., a C&I solar installer. She is in charge of organizing the installation of a new rooftop, grid-tied projects at a data center facility. With plans to create new work orders and assign to her team, she creates a new Job in illu.

  1. Create a Job & assign the relevant workflows, including one for work & time tracking.

2. Tom, the technician assigned to complete the inspection work gets a notification on his phone and heads to site. Once there, he changes the Job status to In Progress and open the Work & Time Tracking workflow.

3. Tom fills in the tracking information, logging his information, the details of the location and type of work performed, and the official start-time.

4. Tom gets on with his inspection with the Post-Install Checks workflow and returns to the Time & Work Tracking to log the official end-time.

5. Samantha gets notified that the job is done and can access Tom’s inputs on her computer. With the location and logged activity times, she has the information she needs to make sure Solar Life Inc. can make sure they are paying Tom prevailing wage and prove it, if necessary.

And it’s as simple as that! With illu’s modular and customizable workflows, it’s as simple as adding one extra Workflow to a Job.

Are you looking to tap into the benefits offered through the IRA and want help with documentation and process management? Reach out to us at info@illu.works or on Whatsapp at +1 408 214 4771!

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illu

illu is a work management platform for teams deploying, operating, and maintaining distributed renewable energy (DRE) systems