Title: Workers' Compensation Coverage by Employee Leasing Companies

Summary: Provides employees of construction contractors & subcontractors are deemed employees of employee leasing company for purposes of workers' compensation coverage; requires employee leasing company provide notice of intent to terminate contractual arrangement; requires employee leasing company allow client company to cure contractual defaults or deficiencies; requires employee leasing company provide written notice of termination of contractual arrangement with client company; requires employee leasing company to continue coverage for specified period after termination of contractual arrangement; provides requirements relating to specified reports and documents for client companies that are construction contractors or subcontractors.

Full Text:
An act relating to workers' compensation coverage by employee leasing companies; amending s. 440.10, F.S.; providing an additional manner in which construction contractors and subcontractors must secure and maintain workers' compensation for employees under certain circumstances; amending s. 468.525, F.S.; providing that employees of construction contractors and subcontractors are deemed employees of an employee leasing company for purposes of workers' compensation coverage under certain circumstances; requiring an employee leasing company to provide notice of intent to terminate a contractual arrangement to specified client companies under certain circumstances; requiring an employee leasing company to allow a client company to cure contractual defaults or deficiencies under certain circumstances; amending s. 468.529, F.S.; providing circumstances under which certain employees are deemed employees of an employee leasing company for workers' compensation coverage; requiring that an employee leasing company provide written notice of termination of a contractual arrangement with a client company under certain circumstances; providing requirements for the notice; requiring the employee leasing company to continue HB 2022 workers' compensation coverage for a specified period after termination of a contractual arrangement under certain circumstances; creating s. 468.5315, F.S.; providing requirements relating to specified reports and documents for certain client companies that are construction contractors or subcontractors; providing for attorney fees; providing penalties; reenacting s. 468.532(1)(g), F.S., relating to discipline, to incorporate the amendments made by the act; pro viding applicability; providing an effective date. Be It Enacted by the Legislature of the State of Florida: Section 1. Paragraph (a) of subsection (1) of section 440.10, Florida Statutes, is amended to read: 440.10 Liability for compensation.-(1)(a) Every employer coming within the provisions of this chapter shall be liable for, and shall secure, the payment to his or her employees, or any physician, surgeon, or pharmacist providing services under the provisions of s. 440.13, of the compensa tion payable under ss. 440.13, 440.15, and 440.16. Any contractor or subcontractor who engages in any public or private construction in the state shall secure and maintain compensation for his or her employees under this chapter as provided in s. 440.38 or under an employee leasing company's contractual HB 2022 arrangement as provided in s. 468.525(4)(g).Section 2. Paragraphs (g) and (h) are added to subsection (4) of section 468.525, Florida Statutes, to read: 468.525 License requirements.-(4) The employ ee leasing company's contractual arrangements with its client companies shall satisfy the following conditions, whereby the leasing company: (g) Provides that during the term of the contractual arrangement, if the client company is a contractor or subcontractor engaged in the construction industry, all leased and nonleased employees of the contractor or subcontractor, including any employees who are hired by the contractor or subcontractor, commence work for the contractor or subcontractor, or are hired directly by the employee leasing company during the term of the contractual arrangement, are deemed employees of the employee leasing company for purposes of workers' compensation coverage. (h) Provides at least days' notice to a client company that is a contractor or subcontractor engaged in the construction industry before terminating the contractual arrangement. If the termination is for cause, the employee leasing company must allow the client company to cure any contractual defaults or deficiencies within that timeframe. Section 3. Subsections (4) and (5) of section 468.529, Florida Statutes, are renumbered as subsections (5) and (6), HB 2022 respectively, subsection (1) is amended, and a new subsection (4) and subsections (7) and (8) are added to that section, to read: 468.529 Licensee's insurance; employment tax; benefit plans.-(1)(a) A licensed employee leasing company is the employer of the leased employees, except that this provision is not intended to affect the determination of any issue aris ing under Pub. L. No.-406, the Employee Retirement Income Security Act, as amended from time to time. An employee leasing company shall be responsible for timely payment of reemployment assistance taxes pursuant to chapter 443, and shall be responsible for providing workers' compensation coverage pursuant to chapter 440. (b) However, a no licensed employee leasing company may not shall sponsor a plan of self-insurance for health benefits, except as may be permitted by the provisions of the Florida Insurance Code or, if applicable, by Pub. L. No.-406, the Employee Retirement Income Security Act, as amended from time to time. For purposes of this section, the term a "plan of self insurance" excludes shall exclude any arrangement where an admitted insur ance carrier has issued a policy of insurance primarily responsible for the obligations of the health plan. (4) During the term of a licensed employee leasing company's contractual arrangement with a client company that is HB 2022 a contractor or subcontractor engaged in the construction industry, all leased and nonleased employees of the contractor or subcontractor, including any employees who are hired by the contractor or subcontractor, commence work for the contractor or subcontractor, or are hired directly by the licensed employee leasing company during the term of the contractual arrangement, are deemed employees of the licensed employee leasing company for purposes of workers' compensation coverage. (7) If a contractual arra ngement between a licensed employee leasing company and a client company that is a contractor or subcontractor engaged in the construction industry is terminated, the licensed employee leasing company must send notice by first-class mail to the last known address of each leased and nonleased employee who was assigned to the client company. The notice must include the date the contractual arrangement was terminated. The notice must also be sent by first-class mail to each contractor or subcontractor with who mthe client company has contracted, if known. (8) The licensed employee leasing company must continue to provide workers' compensation coverage for days for all leased and nonleased employees assigned to a client company after the licensed employee leasing company terminates the contractual arrangement with a client company that is a contractor or subcontractor engaged in the construction industry. HB 2022 Section 4. Section 468.5315, Florida Statutes, is created to read: 468.5315 Contractor and subcont ractor client companies in construction industry; requirements; penalties.-(1) Each client company that is a contractor or subcontractor engaged in the construction industry shall submit a copy of the quarterly earnings report to the licensed employee leasing company and submit self-audits supported by the quarterly earnings report. The report must include a sworn statement by an officer or principal of the client company attesting to the accuracy of the information contained in the report. (2) Each cl ient company that is a contractor or subcontractor engaged in the construction industry shall make available all records necessary for a payroll verification audit and authorize the licensed employee leasing company to make a physical inspection of the cli ent company's operation. If the client company fails upon request of the licensed employee leasing company to provide access to the documents specified in this section and the licensed employee leasing company cannot complete the audit as a result, the cli ent company shall pay a penalty not to exceed three times the most recent estimated annual premium to the licensed employee leasing company. (3) If a client company that is a contractor or subcontractor engaged in the construction industry understates HB 2022 or conceals payroll, or misrepresents or conceals employee duties so as to avoid proper classification for premium calculations, the client company shall pay to the licensed employee leasing company reasonable attorney fees and a penalty equal to three times the difference of the amount of the premium paid and the amount of the premium that should have been paid. The penalty may be enforced in the circuit court of this state having jurisdiction where the client company or the licensed employee leasing company is located or transacts business. (4) If an employee of a client company that is a contractor or subcontractor engaged in the construction industry suffers a compensable injury and the employee was not reported to the licensed employee leasing company pursuant to the contractual arrangement as earning wages before the accident, the client company shall indemnify the licensed employee leasing company for all workers' compensation benefits paid to or on behalf of the employee. Any action for indemnificatio nbrought by the licensed employee leasing company is cognizable in the circuit court having jurisdiction where the client company or licensed employee leasing company is located or transacts business. The licensed employee leasing company is entitled to a reasonable attorney fee if it recovers any portion of the benefits paid in the action. Section 5. For the purpose of incorporating the amendment made by this act to section 468.529, Florida Statutes, in a HB 2022 reference thereto, paragraph (g) of subsection (1) of section 468.532, Florida Statutes, is reenacted to read: 468.532 Discipline.-(1) The following constitute grounds for which disciplinary action against a licensee may be taken by the board: (g) Failing to maintain workers' compensation insurance as required in s. 468.529. Section 6. This act applies to contracts entered into or renewed on or after July 1, 2022. Section 7. This act shall take effect July 1, 2022.