Labor: elective compensation under the Inflation Reduction Act of 2022.

Senator Cortese's renewable energy labor bill creates a framework for employers to make voluntary retroactive wage payments to clean energy workers while qualifying for federal tax incentives under the Inflation Reduction Act of 2022. The legislation authorizes taxpayers, employers, and contractors to provide additional compensation to workers who performed installation, modification, or repair work on qualified renewable energy facilities between January 2023 and December 2024.

The bill establishes specific criteria for these elective payments, requiring that facilities qualify for federal tax incentives but are not classified as public works projects under state law. Employers must comply with U.S. Treasury and IRS regulations regarding renewable electricity production tax incentives. The measure explicitly states that voluntary retroactive payments do not constitute violations of existing wage and hour laws, while maintaining worker protections against retaliation, misclassification, and other labor law violations unrelated to these supplemental wages.

The Labor Commissioner retains authority to investigate payment eligibility and enforce other labor code provisions. These provisions expire on January 1, 2029, creating a defined window for employers to utilize the program while allowing evaluation of its implementation. The bill's findings note that this approach aligns California's labor policies with federal clean energy incentives established through the Inflation Reduction Act.