| Update Applicable to: | Effective Date |
| All Employers, Contractors, and Subcontractors in the Renewable Clean Energy Sector in California | October 1, 2025 |
What happened?
On October 1, 2025, California Governor Gavin Newsom signed Senate Bill 400 (SB 400) into law, enabling retroactive wage payments to workers in the clean energy sector.
Overview:
This legislation amends and repeals Article 4 (commencing with Section 280) of Chapter 1 of Part 1 of Division 2 of the Labor Code, relating to labor:
- Aligns California labor law with provisions of the Inflation Reduction Act of 2022, specifically regarding elective compensation for workers on clean energy projects.
- Allow workers the right to elect to receive compensation in a manner that qualifies for federal tax incentives under the Act.
- Support California’s transition to clean energy by facilitating access to federal funding and tax credits
- Employers must:
- Ensure that compensation structures comply with both state prevailing wage laws and federal elective pay requirements.
- Coordinate with legal and payroll teams to ensure elective compensation complies with both state and federal requirements.
Source References
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