SACRAMENTO – Senator Dave Cortese’s (D-Silicon Valley) SB 400, legislation that protects clean energy workers and ensures California can fully benefit from President Biden’s Inflation Reduction Act (IRA), has been signed into law by Governor Gavin Newsom.

SB 400 removes legal barriers for renewable energy companies that voluntarily provide retroactive wage increases to their workers in order to qualify for IRA tax incentives. The bill ensures California workers can access higher wages while the state accelerates its transition to clean energy.

“This law guarantees that California’s clean energy workforce can share in the economic benefits of the Inflation Reduction Act while also ensuring our state fully capitalizes on federal tax incentives designed to promote renewable energy,” said Senator Cortese. “SB 400 ensures fairness for workers, certainty for employers, and a stronger clean energy future for all of us.”

The Inflation Reduction Act of 2022 authorizes tax incentives for clean energy projects that voluntarily pay prevailing wage-level compensation. In California, one clean energy operator planned to provide approximately $4 million in retroactive elective pay to 110 workers who helped rebuild part of a solar facility.

Without SB 400, these payments could have been misconstrued as admissions of past wage violations under state law, deterring companies from moving forward. SB 400 clarifies that voluntary retroactive wage payments made solely to meet IRA criteria do not constitute a violation of California labor law or grounds for lawsuits.

SB 400 was sponsored by both clean energy industry partners and labor unions. 

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