President signs appropriations bill with payroll items


The President signed the Consolidated and Further Continuing Appropriations Act, 2015 (HR 83) (PL 113-235) on December 16, 2014. The law contains a few payroll-related items.

Payroll notice

The IRS is required to issue a notice of confirmation of any address change relating to an employer making employment tax payments. The notice must be sent to both the employer’s former and new address. In addition, the IRS is required to give special consideration to an offer-in-compromise from a taxpayer who has been the victim of fraud by a third party payroll tax preparer.

Trucker service hours relaxed

Before the law was approved, under the Federal Motor Carrier Safety Act, a driver could not drive after 60/70 hours on duty in 7/8 consecutive days. The driver could restart a 7/8 consecutive day period after taking 34 or more consecutive hours off duty. Previously, regulations limited the use of the 34-hour restart provision to once every 168 hours and required that anyone using the 34-hour restart provision have as part of the restart two periods that included 1 a.m. to 5 a.m.. The regulations were effective February 27, 2012, and the compliance date was July 1, 2013. The rules are also posted at (76 FR 81,133, December 27, 2011). The law suspends enforcement of the rules until Sept. 30, 2015.

Insurance adjuster overtime exemption

Prior to the law some insurance adjusters were exempt from the Fair Labor Standards Act’s (FLSA) wage and overtime requirements under the “administrative” employee exemption. However, to be exempt employees had to be paid a minimum of $455 per week by the employer. The rules applied on a case by case basis.

The law now exempts from the maximum hours requirements any employee who: (1) adjusts or evaluates claims resulting from or relating to a major disaster for at least $591 per week (or any minimum weekly amount established by the Secretary of Labor, whichever is greater) during the 2-year period after the disaster; and (2) is employed as an adjuster or evaluator by an employer not itself engaged, directly or through an affiliate, in underwriting, selling, or marketing property, casualty, or liability insurance policies or contracts. In other words, some insurance claims adjusters are exempt from the minimum wage and overtime requirements under the FLSA, effective December 16, 2014.

Specifically, the duties allowed are:

• interviewing insured individuals, individuals who suffered injuries or other damages or losses arising from or relating to a disaster, witnesses, or physicians;

• inspecting property damage or reviewing factual information to prepare damage estimates;

• evaluating and making recommendations regarding coverage or compensability of claims or determining liability or value aspects of claims;

• negotiating settlements; or

• making recommendations regarding litigation.

Definitions. The term “major disaster” means any disaster or catastrophe declared or designated by any State or Federal agency or department. The term “employee employed to adjust or evaluate claims resulting from or relating to such major disaster” means an individual who timely secured or secures a license required by applicable law to engage in and perform the activities described above and is employed by an employer that maintains worker compensation insurance coverage or protection for its employees, if required by applicable law, and withholds applicable federal, state, and local income and payroll taxes from the wages, salaries and any benefits of such employees. The term “affiliate” means a company that, by reason of ownership or control of 25% or more of the outstanding shares of any class of voting securities of one or more companies, directly or indirectly, controls, is controlled by, or is under common control with, another company.”

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