The U.S. government avoided shutting down in late March by pushing through a $1.2 trillion package to fund key agencies for the rest of fiscal year 2024, which ends on October 1.
Some pieces of the 1,000-plus page legislation involve some nuanced Payroll issues, including a directive to the Internal Revenue Service (IRS), a new requirement for the employment and pay of certain nonimmigrant workers, and a re-enacted overtime exemption threshold that can be applied when there is a major disaster.
IRS Requirement
The new law (P.L. 118-47) signed late on March 23 by President Biden, requires the IRS to provide “special consideration” to taxpayers making an offer-in-compromise on tax liabilities when a third-party payroll tax provider has fraudulently victimized them.
The same clause tells the agency to send notices confirming any address changes relating to employers making employment tax payments. These notices shall be sent to the employer’s former and new address.
Exemption From Overtime Pay Reinstituted
The bill re-enacted a specific exemption from overtime pay from the Fair Labor Standards Act for insurance claims adjusters working after a major disaster. Such workers will continue to be exempted from overtime pay requirements if they make at least $591 a week for work performed up to two years following the disaster occurrence for work that specifically surrounds those insurance claims.
This is a lower amount than the currently-designated $684-a-week salary requirement test set by the Labor Department for many who may qualify as exempt from FLSA provisions requiring overtime pay. (A new Labor Department rule increasing that amount is being reviewed and is expected to be finalized soon.)
This provision is effective immediately and impacts employees of insurance companies that provide post-disaster coverage to claimants.
Special Visa Requirements for Seafood Workers
In addition, seafood industry employers have to re-assess local labor market conditions after 90 days when hiring certain temporary nonresident alien workers under an H-2B visa.
The H2-B visa is for temporary non-agricultural workers, and U.S. employers must apply several tests to ensure that such positions are not displacing U.S. citizens or qualified residents. The number of nonresidents that can work under such visas is capped each year but the number was expanded in 2024.
Hiring Nonresidents
Finally, a major focus of the budget agreement was on securing the U.S. border and limiting opportunities for nonresident aliens to be lawfully employed by the U.S. government was a priority. An exception is allowed for the employment of nonresidents as “Wildland firefighters” for up to 120 days by either the Department of the Interior or the USDA Forest Service, pursuant to an agreement with another country.
Overall, the legislation retained existing funding levels for the Internal Revenue Service but reduced the budgeted amount for the Department of Labor by some $400 million. While no reduction from 2023 appropriation amounts was seen for the Wage and Hour Division, which is charged with enforcing the FLSA, by keeping the amount appropriated flat for 2024, the division will need to reduce staff, according to prior budget documents that included the scenario of flat funding.
Other Federal and State Activities
The March 11 effective date for a Labor Department rule changing the tests for determining employee or contractor status came and went without any legal challenge to stop the rule’s implementation. Chances remain, however, that a federal judge in one of four states where challenges were filed may stop the rule from being fully implemented. House Republicans on the Committee on Education and the Workforce passed a measure that would block the rule, but even if this proposal passes the House, it likely will not be addressed in the Senate.
For some recent state activity, Wisconsin became the latest state to formally pass a law addressing earned wage access (also known as on-demand pay) administration in the state. Nevada and Missouri also passed similar measures allowing the practice with certain requirements.
It appears employees subject to taxes in the state of Georgia will get an accelerated rate cut this year, possibly by July 1. Taxes already were set to be reduced, but this bill that passed both houses and was sent to the governor would implement reductions sooner.
Florida minors will soon be able to work more hours, as the governor approved legislation to loosen restrictions on time worked for 16 and 17 year-olds, and modified work time limits for those aged 15.
Michael Baer is president of Baer Unlimited, an independent research, analysis, and communications provider that helps Payroll modernize operations, stay compliant, and improve the use and security of their data. For more on these issues discussed above, book Michael as a mentor through the GPA Mentor page, or contact him directly at mike.baer@baerunlimited.com.
The U.S. government avoided shutting down in late March by pushing through a $1.2 trillion package to fund key agencies for the rest of fiscal year 2024, which ends on October 1.
Some pieces of the 1,000-plus page legislation involve some nuanced Payroll issues, including a directive to the Internal Revenue Service (IRS), a new requirement for the employment and pay of certain nonimmigrant workers, and a re-enacted overtime exemption threshold that can be applied when there is a major disaster.
IRS Requirement
The new law (P.L. 118-47) signed late on March 23 by President Biden, requires the IRS to provide “special consideration” to taxpayers making an offer-in-compromise on tax liabilities when a third-party payroll tax provider has fraudulently victimized them.
The same clause tells the agency to send notices confirming any address changes relating to employers making employment tax payments. These notices shall be sent to the employer’s former and new address.
Exemption From Overtime Pay Reinstituted
The bill re-enacted a specific exemption from overtime pay from the Fair Labor Standards Act for insurance claims adjusters working after a major disaster. Such workers will continue to be exempted from overtime pay requirements if they make at least $591 a week for work performed up to two years following the disaster occurrence for work that specifically surrounds those insurance claims.
This is a lower amount than the currently-designated $684-a-week salary requirement test set by the Labor Department for many who may qualify as exempt from FLSA provisions requiring overtime pay. (A new Labor Department rule increasing that amount is being reviewed and is expected to be finalized soon.)
This provision is effective immediately and impacts employees of insurance companies that provide post-disaster coverage to claimants.
Special Visa Requirements for Seafood Workers
In addition, seafood industry employers have to re-assess local labor market conditions after 90 days when hiring certain temporary nonresident alien workers under an H-2B visa.
The H2-B visa is for temporary non-agricultural workers, and U.S. employers must apply several tests to ensure that such positions are not displacing U.S. citizens or qualified residents. The number of nonresidents that can work under such visas is capped each year but the number was expanded in 2024.
Hiring Nonresidents
Finally, a major focus of the budget agreement was on securing the U.S. border and limiting opportunities for nonresident aliens to be lawfully employed by the U.S. government was a priority. An exception is allowed for the employment of nonresidents as “Wildland firefighters” for up to 120 days by either the Department of the Interior or the USDA Forest Service, pursuant to an agreement with another country.
Overall, the legislation retained existing funding levels for the Internal Revenue Service but reduced the budgeted amount for the Department of Labor by some $400 million. While no reduction from 2023 appropriation amounts was seen for the Wage and Hour Division, which is charged with enforcing the FLSA, by keeping the amount appropriated flat for 2024, the division will need to reduce staff, according to prior budget documents that included the scenario of flat funding.
Other Federal and State Activities
The March 11 effective date for a Labor Department rule changing the tests for determining employee or contractor status came and went without any legal challenge to stop the rule’s implementation. Chances remain, however, that a federal judge in one of four states where challenges were filed may stop the rule from being fully implemented. House Republicans on the Committee on Education and the Workforce passed a measure that would block the rule, but even if this proposal passes the House, it likely will not be addressed in the Senate.
For some recent state activity, Wisconsin became the latest state to formally pass a law addressing earned wage access (also known as on-demand pay) administration in the state. Nevada and Missouri also passed similar measures allowing the practice with certain requirements.
It appears employees subject to taxes in the state of Georgia will get an accelerated rate cut this year, possibly by July 1. Taxes already were set to be reduced, but this bill that passed both houses and was sent to the governor would implement reductions sooner.
Florida minors will soon be able to work more hours, as the governor approved legislation to loosen restrictions on time worked for 16 and 17 year-olds, and modified work time limits for those aged 15.
Michael Baer is president of Baer Unlimited, an independent research, analysis, and communications provider that helps Payroll modernize operations, stay compliant, and improve the use and security of their data. For more on these issues discussed above, book Michael as a mentor through the GPA Mentor page, or contact him directly at mike.baer@baerunlimited.com.