labor hours
(8) Apprenticeship requirements The requirements described in this paragraph with respect to the construction of any qualified facility are as follows: (A) Labor hours (i) Percentage of total labor hours Taxpayers shall ensure that, with respect to the construction of any qualified facility, not less than the applicable percentage of the total labor hours of the construction, alteration, or repair work (including such work performed by any contractor or subcontractor) with respect to such facility shall, subject to subparagraph (B), be performed by qualified apprentices. (ii) Applicable percentage For purposes of clause (i), the applicable percentage shall be— (I) in the case of a qualified facility the construction of which begins before January 1, 2023 , 10 percent, (II) in the case of a qualified facility the construction of which begins after December 31, 2022 , and before January 1, 2024 , 12.5 percent, and (III) in the case of a qualified facility the construction of which begins after December 31, 2023 , 15 percent. (B) Apprentice to journeyworker ratio The requirement under subparagraph (A)(i) shall be subject to any applicable requirements for apprentice-to-journeyworker ratios of the Department of Labor or the applicable State apprenticeship agency. (C) Participation Each taxpayer, contractor, or subcontractor who employs 4 or more individuals to perform construction, alteration, or repair work with respect to the construction of a qualified facility shall employ 1 or more qualified apprentices to perform such work. (D) Exception (i) In general A taxpayer shall not be treated as failing to satisfy the requirements of this paragraph if such taxpayer— (I) satisfies the requirements described in clause (ii), or (II) subject to clause (iii), in the case of any failure by the taxpayer to satisfy the requirement under subparagraphs (A) and (C) with respect to the construction, alteration, or repair work on any qualified facility to which subclause (I) does not apply, makes payment to the Secretary of a penalty in an amount equal to the product of— (aa) $50, multiplied by (bb) the total labor hours for which the requirement described in such subparagraph was not satisfied with respect to the construction, alteration, or repair work on such qualified facility. (ii) Good faith effort For purposes of clause (i), a taxpayer shall be deemed to have satisfied the requirements under this paragraph with respect to a qualified facility if such taxpayer has requested qualified apprentices from a registered apprenticeship program, as defined in section 3131(e)(3)(B), and— (I) such request has been denied, provided that such denial is not the result of a refusal by the taxpayer or any contractors or subcontractors engaged in the performance of construction, alteration, or repair work with respect to such qualified facility to comply with the established standards and requirements of the registered apprenticeship program, or (II) the registered apprenticeship program fails to respond to such request within 5 business days after the date on which such registered apprenticeship program received such request. (iii) Intentional disregard If the Secretary determines that any failure described in subclause (i)(II) is due to intentional disregard of the requirements under subparagraphs (A) and (C), subclause (i)(II) shall be applied by substituting “$500” for “$50” in item (aa) thereof. (E) Definitions For purposes of this paragraph— (i) Labor hours The term “labor hours”— (I) means the total number of hours devoted to the performance of construction, alteration, or repair work by any individual employed by the taxpayer or by any contractor or subcontractor, and (II) excludes any hours worked by— (aa) foremen, (bb) superintendents, (cc) owners, or (dd) persons employed in a bona fide executive, administrative, or professional capacity (within the meaning of those terms in part 541 of title 29, Code of Federal Regulations ). (ii) Qualified apprentice The term “qualified apprentice” means an individual who is employed by the taxpayer or by any contractor or subcontractor and who is participating in a registered apprenticeship program, as defined in section 3131(e)(3)(B).