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SB-400 • 2026

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

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

Crime Energy Labor Taxes
Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor
Cortese
Last action
2025-10-01
Official status
Chaptered by Secretary of State. Chapter 220, Statutes of 2025.
Effective date
Not listed

Plain English Breakdown

The official summary does not provide specific details on how retroactive payments are to be made or enforced, only that they are authorized under certain conditions.

Elective Compensation for Renewable Energy Workers

The law allows taxpayers, employers, contractors, or subcontractors to make retroactive wage payments to workers who built renewable clean energy facilities if certain conditions are met.

What This Bill Does

  • Allows people involved in building renewable clean energy projects to pay extra wages to workers if the project is not a public works project and does not follow special wage rules like the Davis-Bacon Act.
  • Requires these retroactive payments to be made only for work done on or after January 1, 2023, and completed by December 31, 2024.
  • Limits this rule until January 1, 2029.

Who It Names or Affects

  • Taxpayers involved in renewable energy projects
  • Employers who build or repair clean energy facilities
  • Contractors and subcontractors working on these projects
  • Workers who built or repaired qualified renewable clean energy facilities

Terms To Know

Davis-Bacon Act
A law that sets minimum wage rates for workers on federal construction projects.
Public Works Project
Construction, alteration, demolition, installation, or repair work done under contract and paid for with public funds.

Limits and Unknowns

  • The law only applies to renewable energy facilities built between January 1, 2023, and December 31, 2024.
  • It does not apply if the facility is a public works project or subject to other wage laws like the Davis-Bacon Act.

Bill History

  1. 2025-10-01 California Legislative Information

    Chaptered by Secretary of State. Chapter 220, Statutes of 2025.

  2. 2025-10-01 California Legislative Information

    Approved by the Governor.

  3. 2025-09-23 California Legislative Information

    Enrolled and presented to the Governor at 2 p.m.

  4. 2025-09-12 California Legislative Information

    Assembly amendments concurred in. (Ayes 38. Noes 0. Page 2968.) Ordered to engrossing and enrolling.

  5. 2025-09-12 California Legislative Information

    Urgency clause adopted.

  6. 2025-09-12 California Legislative Information

    In Senate. Concurrence in Assembly amendments pending.

  7. 2025-09-11 California Legislative Information

    Read third time. Urgency clause adopted. Passed. (Ayes 80. Noes 0. Page 3277.) Ordered to the Senate.

  8. 2025-09-03 California Legislative Information

    (Corrected September 18.)

  9. 2025-09-03 California Legislative Information

    Ordered to third reading.

  10. 2025-09-03 California Legislative Information

    Read third time and amended.

  11. 2025-09-02 California Legislative Information

    Ordered to third reading.

  12. 2025-09-02 California Legislative Information

    Action rescinded whereby bill was read third time, Urgency clause adopted, passed, and ordered to the Senate.

  13. 2025-08-29 California Legislative Information

    In Assembly. Held at Desk.

  14. 2025-08-29 California Legislative Information

    Ordered to the Assembly.

  15. 2025-08-29 California Legislative Information

    Action rescinded whereby bill was re-referred to Com. on RLS. pursuant to Senate Rule 29.10(d).

  16. 2025-08-29 California Legislative Information

    Re-referred to Com. on RLS. pursuant to Senate Rule 29.10(d).

  17. 2025-08-28 California Legislative Information

    In Senate. Concurrence in Assembly amendments pending.

  18. 2025-08-28 California Legislative Information

    Read third time. Urgency clause adopted. Passed. (Ayes 74. Noes 0. Page 2778.) Ordered to the Senate.

  19. 2025-08-25 California Legislative Information

    Read second time. Ordered to consent calendar.

  20. 2025-08-21 California Legislative Information

    Read second time and amended. Ordered to second reading.

  21. 2025-08-20 California Legislative Information

    From committee: Do pass as amended. Ordered to consent calendar. (Ayes 15. Noes 0.) (August 20).

  22. 2025-07-10 California Legislative Information

    From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 7. Noes 0.) (July 9). Re-referred to Com. on APPR.

  23. 2025-06-30 California Legislative Information

    From committee with author's amendments. Read second time and amended. Re-referred to Com. on L. & E.

  24. 2025-06-27 California Legislative Information

    Re-referred to Coms. on L. & E. and JUD. pursuant to Assembly Rule 96.

  25. 2025-06-24 California Legislative Information

    July 7 set for first hearing canceled at the request of author.

  26. 2025-06-23 California Legislative Information

    From committee with author's amendments. Read second time and amended. Re-referred to Com. on TRANS.

  27. 2025-05-19 California Legislative Information

    Referred to Com. on TRANS.

  28. 2025-05-08 California Legislative Information

    In Assembly. Read first time. Held at Desk.

  29. 2025-05-08 California Legislative Information

    Read third time. Passed. (Ayes 36. Noes 0. Page 1050.) Ordered to the Assembly.

  30. 2025-05-06 California Legislative Information

    Read second time. Ordered to consent calendar.

  31. 2025-05-05 California Legislative Information

    From committee: Be ordered to second reading pursuant to Senate Rule 28.8 and ordered to consent calendar.

  32. 2025-04-25 California Legislative Information

    Set for hearing May 5.

  33. 2025-04-23 California Legislative Information

    From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 15. Noes 0. Page 842.) (April 22). Re-referred to Com. on APPR.

  34. 2025-04-08 California Legislative Information

    Set for hearing April 22.

  35. 2025-04-07 California Legislative Information

    From committee with author's amendments. Read second time and amended. Re-referred to Com. on TRANS.

  36. 2025-04-03 California Legislative Information

    April 8 hearing postponed by committee.

  37. 2025-04-01 California Legislative Information

    Set for hearing April 8.

  38. 2025-03-27 California Legislative Information

    From committee with author's amendments. Read second time and amended. Re-referred to Com. on TRANS.

  39. 2025-03-13 California Legislative Information

    March 25 set for first hearing canceled at the request of author.

  40. 2025-03-11 California Legislative Information

    Set for hearing March 25.

  41. 2025-02-26 California Legislative Information

    Referred to Com. on TRANS.

  42. 2025-02-18 California Legislative Information

    From printer. May be acted upon on or after March 17.

  43. 2025-02-14 California Legislative Information

    Introduced. Read first time. To Com. on RLS. for assignment. To print.

Official Summary Text

SB 400, Cortese.
Labor: elective compensation under the Inflation Reduction Act of 2022.
Existing law, with certain exceptions, establishes 8 hours as a day’s work and a 40-hour workweek, and requires payment of prescribed overtime compensation for additional hours worked. Existing law requires a person who unlawfully withholds wages due an employee, as provided, to be subject to specified civil penalties. Existing law charges the Labor Commissioner with enforcement of these provisions.
Existing law makes every person who fails to pay the wages of each employee subject to a specified penalty. Existing law requires the penalty to either be recovered by an employee as a statutory penalty or by the Labor Commissioner as a civil penalty, as prescribed.
Existing law defines “public works,” for purposes of regulating public works contracts, as, among other things, construction, alteration,
demolition, installation, or repair work done under contract and paid for, in whole or in part, out of public funds. Existing law further requires that, except as specified, not less than the general prevailing rate of per diem wages be paid to workers employed on public works and imposes misdemeanor penalties for a violation of this requirement. Existing law provides that for the purposes of provisions of law relating to the payment of prevailing wages, “public works” includes specified types of construction, alteration, demolition, installation, and repair work.
Existing law, the Labor Code Private Attorneys General Act of 2004, authorizes an aggrieved employee to recover through a civil action a civil penalty that may be assessed and collected by the Labor and Workforce Development Agency, as specified.
This bill would, until January 1, 2029, authorize a taxpayer, employer, contractor, or subcontractor to make an
elective retroactive wage payment, as defined, to workers who performed work on a qualified renewable clean energy facility pursuant to the Inflation Reduction Act of 2022 (Public Law 117-169) if certain requirements are met, including, among others, that the facility is not a public works project, as defined, and would not otherwise be subject to the Davis-Bacon Act, as specified. The bill would specify that those provisions do not apply to, among others, violations of any other provision of law unrelated to the payment of retroactive prevailing wage correction payments in connection with the application for federal tax benefits pursuant to the Inflation Reduction Act of 2022. The bill would limit that authorization to renewable energy facility construction or repairs commenced on or after January 1, 2023, that were completed on or before December 31, 2024.
The bill would make related findings and declarations.
This bill would declare that it is to take effect immediately as an urgency statute.

Current Bill Text

Read the full stored bill text 
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