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

The document was reformatted from an official chaptered legislative print (with page numbers, column headers like 'Ch. 220', and centered formatting) to a web page layout that includes navigation menus, search tools, version history links, and bill tracking features. No changes to the actual statutory text.

Chapter number 220 was assigned to the bill upon the Governor's signature on October 1, 2025.

The authenticated electronic legal material header and filing date (October 1, 2025) were added in place of the enrolled bill passage headers.

The entire amendment to Section 2032 of the Streets and Highways Code was deleted. This removed provisions allocating $200 million annually for local transportation agencies, $100 million for the Active Transportation Program, $400 million for bridge and culvert maintenance, $25 million for the freeway service patrol, $5 million for workforce development (preapprenticeship), $25 million for local planning grants, $5 million to UC for transportation research, and $2 million to CSU for transportation research and workforce education.

The bill title was changed to remove the reference to amending Section 2032 of the Streets and Highways Code, now covering only the Labor Code provisions regarding elective compensation under the Inflation Reduction Act.

Section 281 was restructured: a new subsection (b) defines 'elective retroactive wage payment' as a payment that meets all of the listed conditions (facility qualified for tax incentives, voluntary payment for specified clean energy work, not a public works project, made pursuant to IRA provisions, solely for federal tax incentive purposes, and compliance with IRA guidance). The old version listed these same conditions as requirements for the safe harbor in subsection (a)(2) rather than as part of a definition.

The safe harbor language in Section 281(a)(2) was simplified from 'It shall not be a violation...if all of the following conditions are met' to 'An elective retroactive wage payment made pursuant to paragraph (1) does not, by itself, constitute a violation,' shifting the condition-checking into the new definition.

The exception in Section 281(c)(3) was expanded from 'Violations unrelated to the payment of retroactive prevailing wage correction payments' to 'Violations of any other provision of law unrelated to the payment of retroactive prevailing wage correction payments,' making it clearer that the safe harbor does not protect against violations of any other law.

Added an urgency clause (new Section 2) declaring the act an urgency statute under Article IV of the California Constitution so it takes effect immediately upon passage rather than on January 1. The stated necessity is to minimize the effect of recent changes to federal clean energy programs and ensure access to currently available Inflation Reduction Act credits.

Section 281(a)(2) was narrowed: the old version stated that 'no cause of action may be asserted or maintained' under Sections 200-244, 500-558.1, 1171-1207, or 2698-2699.8 for making an elective retroactive wage payment. The new version only states that the payment 'does not, by itself, constitute a violation' of those sections. This removes an explicit bar on lawsuits and replaces it with a weaker statement that the act of paying is not itself illegal.

The legislative digest vote requirement changed from 'majority' to 'majority 2/3,' reflecting the constitutional requirement for passing urgency statutes.

Subsections in Section 281(b) were renumbered from lettered (A)-(F) to numbered (1)-(6), and a duplicate word ('payment payment') was corrected in the digest. The phrase 'retroactive prevailing wage correction payments' in Section 281(c)(3) was shortened to 'retroactive prevailing wage payments.'

Section (b)(5) now requires that the elective retroactive wage payment be 'in addition to wages otherwise paid pursuant to applicable law,' meaning employers cannot use these payments to offset or replace wages they are already legally obligated to pay.

A new exception at section (c)(4) removes the safe harbor for any taxpayer, employer, contractor, or subcontractor that has failed to pay in full wages otherwise due under applicable law and has failed to cure that violation. This prevents employers already in wage-law noncompliance from using the elective compensation mechanism as a shield.

Section (e) was changed from 'investigate or enforce other violations of this code' to 'investigate or enforce this section or any other violations of this code,' explicitly giving the Labor Commissioner authority to enforce the provisions of this section itself, not just other Labor Code violations.

Added a new Article 4 (Sections 280-281) to the Labor Code creating an elective compensation framework under the Inflation Reduction Act of 2022, expanding the bill beyond its original transportation focus into labor law.

Allows taxpayers, employers, contractors, or subcontractors to make voluntary retroactive wage payments to workers on qualified renewable clean energy facilities (solar panels, inverters, battery storage, transformers) without triggering violations of state wage and hour laws, provided the facility is not a public works project and would not otherwise be subject to the Davis-Bacon Act.

Sets conditions for the safe harbor: the facility must qualify for IRA tax incentives, the payment must be solely for the purpose of applying for federal tax incentives, and the payer must be in compliance with applicable IRA provisions and IRS/Treasury guidance.

Excludes from protection: retaliation/discrimination/harassment claims, willful misclassification of employees as independent contractors, and violations unrelated to retroactive prevailing wage correction payments. Preserves the Labor Commissioner's authority to investigate applicability and enforce other code violations.

Limits applicability to renewable energy facility construction or repairs commenced on or after January 1, 2023, that were completed on or before December 31, 2024. The entire article sunsets and is repealed as of January 1, 2029.

Corrected 'its the expenditures' to 'the expenditures' and changed 'relevant research internet website' to 'internet website' in the UC/CSU reporting requirement. Various formatting and spacing adjustments throughout.

Removed the amendment to Section 185034 of the Public Utilities Code, which would have required the High-Speed Rail Authority to keep the public informed through community outreach events, public information workshops, and newsletters posted on its website. The bill no longer touches high-speed rail law.

Narrowed the reporting requirement from the entire University of California and California State University systems to two specific units: the UC Institute of Transportation Studies and the CSU Transportation Consortium. These named units, rather than the full university systems, are now responsible for submitting annual expenditure reports and posting them on their websites.

Fiscal committee vote changed from 'no' to 'yes,' indicating a fiscal impact was identified or resolved between versions.

The bill now amends Section 2032 of the Streets and Highways Code in addition to the Public Utilities Code, dramatically expanding its scope from a single HSR transparency provision to a broader transportation funding accountability measure.

UC and CSU must each submit an annual report by January 1 to the Transportation Agency, Assembly Committee on Transportation, Senate Committee on Transportation, Assembly Committee on Budget, and Senate Committee on Budget and Fiscal Review detailing their expenditures of the previous fiscal year's transportation research funds, including research activities and administration.

The annual reports must comply with Government Code Section 9795 (which governs legislative report formatting) and must be posted on each university's relevant research internet website, creating a public transparency requirement.

The fiscal committee vote changed from 'no' to 'yes', indicating the amendment was determined to have a fiscal impact, likely due to the new reporting obligations imposed on UC and CSU.