Top 10 Gotchas in IRA Compliance

The IRA regulatory requirements are coming in hot!

In 2023, we started prepping for IRA compliance efforts and went searching for solutions. Let me tell you, the landscape is stark. There are two types of offerings, each on extreme ends of the spectrum—

• Tools that serve as documentation repos (“after-the-fact” checks with very little support, weak integrations, antiquated software, tedious processing, and convoluted onboarding setups)
• End-to-end payroll compliance solutions (major software lift and shift, internal processes disruption, loss of benefit integrations, discontinuous year-end reporting, and tax implications)

Oh boy… the Inflation Reduction Act was looking exceptionally painful. 

Where do we go from here? Well, slowly but surely, we attempted to fill in the gaps left by the documentation solutions while complementing existing payroll. In the process, we found an opportunity to create delightful software that sits in the middle of the spectrum. We envisioned a tool that would play nicely with internal systems, dramatically simplify reporting, demystifies the compliance process, and support (not delay) operations.

We don't believe that compliance should be the competitive frontier. We all want to comply.

Through DSPTCH, IRA players get the comfort and visibility of knowing what wage rates and job classifications similar projects have coalesced around, helping to avoid audit red flags. Beyond basic insights, DSPTCH's globally-unified user structure allows companies to coordinate in real-time on projects, monitor apprentice ratios, log DOL compliant apprentice hours, and leverage DSPTCH's comprehensive site maps and geospatial data to deeply understand regulatory boundaries pertinent to their projects.

We aren’t shoe-horning some stodgy 1990s Davis-Bacon Government tool into the modern age. We’re reimagining what compliance looks like.

Much like when we decided to map 1.9MM+ roads to every turbine/ inverter/ substation/ BESS site, it turns out the best way to eat an elephant is to grab a spoon and start chewing.

Along the way, we’ve learned a thing or two. Below are some “Gotchas” we found particularly tricky:

1. Prevailing wage & fringe rates vary by time, locale, job classification, wage determination, project tax credits, and more
2. Rates are published independently by federal, state, county, and city governments
3. Sites that cross state, county, or local government boundaries may require overtime, tax, and audit adjustments
4. Prevailing wage daily overtime calculations may differ from state law or company policy
5. Any company or contractor with 4 or more personnel (throughout the project duration) must have at least one DOL registered apprentice working on site
6. Apprentice hour ratios must be met individually by each company and across the aggregate project level for each project pay period
7. Apprentices' wage progression schedules override prevailing wage UNLESS their employer exceeds the max ratio for a project pay cycle, then the wage rate is the higher of the prevailing wage or the apprentices' wage
8. Journeyman ratios vary by state, sponsor-specific program, and IRA projects— companies must comply with the most onerous ratio
9. Joint employment & FLSA regulations create a delicate compliance and authority dichotomy
10. Guidance revisions can go into effect at any time!
 

Oh, and employers/ asset owners have a narrow grace period to rectify payroll errors. Don’t you love when the stakes get higher!?

If you take a step back, the requirements are dizzying, the guidance is murky at best, and sometimes laws conflicts with each other. Turns out the IRA looks a lot like a recipe for endless paperwork and legal + accounting bills. 

Joking aside, why spend time on something so convoluted? 

As we see it, what lies ahead is our greatest generational challenge. Together, the Inflation Reduction Act and Bipartisan Infrastructure Bill are the largest non-wartime mobilization of people and resources in US history. We must bring to bear all facets of innovation to sustainably transition our evolving mix of energy resources. If we are to succeed, it will be because the whole of industry comes together to make it so.  

We will build something far bigger than ourselves. We will build factories, generate new sources of power, train millions of new workers, erect transmission lines, bolster infrastructure, and more.

The generational question seems pretty obvious. During the largest infrastructure investment in national history, what did you build? 

At DSPTCH, we build the software. We empower our frontline colleagues to get to work safely, comply with complexity, maximize productivity, and keep building. We are a small piece, but we believe we can have a mighty impact by focusing on pervasive problems that no one else cares about.

The world needs far more energy than we’re prepared to deliver. We need less friction, more force-multipliers, and to scale faster.

Let's get back to building!

We are rooting for you,

Alex

That guy trying to keep lawyers and bean-counters from bungling the build out

alex@dsptch.work