HB 1247 2003
1	A bill to be entitled
2	An act relating to workers’ compensation; amending s.
3	440.02, F.S.; revising and deleting definitions; amending
4	s. 440.05, F.S.; revising provisions relating to election
5	and revocation of exemption to remove references to sole
6	proprietors and partners; removing requirement that
7	corporate officers provide proof of status to claim
8	exemption; amending s. 440.077, F.S.; applying provisions
9	relating to election of exemption from ch. 440, F.S., to
10	corporate officers rather than sole proprietors and
11	partners; amending s. 440.10, F.S.; revising provisions
12	relating to liability for compensation; requiring
13	subcontractors to provide evidence of workers'
14	compensation coverage; providing an effective date.
15
16	Be It Enacted by the Legislature of the State of Florida:
17
18	Section 1. Subsections (8), (15), (16), (41), and (42) of
19	section 440.02, Florida Statutes, are amended to read:
20	440.02 Definitions.--When used in this chapter, unless the
21	context clearly requires otherwise, the following terms shall
22	have the following meanings:
23	(8) "Construction industry" means for-profit activities
24	involving the carrying out ofany building, clearing, filling,
25	excavation, or substantial improvement in the size or use of any
26	structure or the appearance of any land. When appropriate to the
27	context, "construction" refers to the act of construction or the
28	result of construction. However, "construction" doesshallnot
29	mean a homeowner'slandowner'sact of construction or the result
30	of a construction upon his or her own premises, provided such
31	premises are not intended to be sold,or resold, or leased by
32	the owner within 1 year after the commencement of construction.
33	The division may, by rule, establish standard industrial
34	classification codes and definitions thereof which meet the
35	criteria of the term “construction industry” as set forth in
36	this section.
37	(15)(a) "Employee" means any person who receives
38	remuneration from an employer for the performance of any work or
39	service, whether byengaged in any employment under any
40	appointment or contract forofhire or apprenticeship, express
41	or implied, oral or written, whether lawfully or unlawfully
42	employed, and includes, but is not limited to, aliens and
43	minors.
44	(b) "Employee" includes any person who is an officer of a
45	corporation and who performs services for remuneration for such
46	corporation within this state, whether or not such services are
47	continuous.
48	1. Any officer of a corporation may elect to be exempt
49	from this chapter by filing written notice of the election with
50	the department as provided in s. 440.05.
51	2. As to officers of a corporation who are actively
52	engaged in the construction industry, no more than three
53	officers of a corporation or of any group of affiliated
54	corporationsmay elect to be exempt from this chapter by filing
55	written notice of the election with the department as provided
56	in s. 440.05. Each officer must be a shareholder who owns at
57	least 10 percent of the stock of such corporation and is listed
58	as an officer of such corporation with the Division of
59	Corporations of the Department of State.However, any exemption
60	obtained by a corporate officer of a corporation actively
61	engaged in the construction industry is not applicable with
62	respect to any commercial building project estimated to be
63	valued at $250,000 or greater.
64	3. An officer of a corporation who elects to be exempt
65	from this chapter by filing a written notice of the election
66	with the department as provided in s. 440.05 is not an employee.
67
68	Services are presumed to have been rendered to the corporation
69	if the officer is compensated by other than dividends upon
70	shares of stock of the corporation which the officer owns. The
71	term “affiliated” means and includes one or more corporations or
72	entities, any one of which is a corporation engaged in the
73	construction industry, under the same or substantially the same
74	control of a group of business entities which are connected or
75	associated so that one entity controls or has the power to
76	control each of the other business entities. “Affiliated”
77	includes the officers, directors, executives, shareholders
78	active in management, employees, and agents of the affiliated
79	corporation. The ownership by one business entity of a
80	controlling interest in another business entity or a pooling of
81	equipment or income among business entities shall be prima facie
82	evidence that one business is affiliated with the other.
83	(c)1. "Employee" includes:
84	1. A sole proprietor or a partner who is not engaged in
85	the construction industry,devotes full time to the
86	proprietorship or partnership, and, except as provided in this
87	paragraph,elects to be included in the definition of employee
88	by filing notice thereof as provided in s. 440.05. Partners or
89	sole proprietors actively engaged in the construction industry
90	are considered employees unless they elect to be excluded from
91	the definition of employee by filing written notice of the
92	election with the department as provided in s. 440.05. However,
93	no more than three partners in a partnership that is actively
94	engaged in the construction industry may elect to be excluded. A
95	sole proprietor or partner who is actively engaged in the
96	construction industry and who elects to be exempt from this
97	chapter by filing a written notice of the election with the
98	department as provided in s. 440.05 is not an employee. For
99	purposes of this chapter, an independent contractor is an
100	employee unless he or she meets all of the conditions set forth
101	in subparagraph (d)1.
102	2. All persons who are being paid by a construction
103	contractor as a subcontractor, unless the subcontractor has
104	validly elected an exemption as permitted by this chapter, or
105	has otherwise secured the payment of compensation coverage as a
106	subcontractor, consistent with s. 440.10, for work performed by
107	or as a subcontractor.
108	3. An independent contractor working or performing
109	services in the construction industry.
110	4. A sole proprietor who engages in the construction
111	industry and a partner or partnership that is engaged in the
112	construction industry.
113	2. Notwithstanding the provisions of subparagraph 1., the
114	term "employee" includes a sole proprietor or partner actively
115	engaged in the construction industry with respect to any
116	commercial building project estimated to be valued at $250,000
117	or greater. Any exemption obtained is not applicable, with
118	respect to work performed at such a commercial building project.
119	(d) "Employee" does not include:
120	1. An independent contractor who is not engaged in the
121	construction industry., if:
122	a. In order to meet the definition of "independent
123	contractor," at least four of the following criteria must be
124	met:The independent contractor maintains a separate business
125	with his or her own work facility, truck, equipment, materials,
126	or similar accommodations;
127	(I) The independent contractor maintains a separate
128	business with his or her own work facility, truck, equipment,
129	materials, or similar accommodations;
130	(II) The independent contractor holds or has applied for a
131	federal employer identification number, unless the independent
132	contractor is a sole proprietor who is not required to obtain a
133	federal employer identification number under state or federal
134	regulations;
135	(III) The independent contractor receives compensation for
136	services rendered or work performed and such compensation is
137	paid to a business rather than to an individual;
138	(IV) The independent contractor holds one or more bank
139	accounts in the name of the business entity for purposes of
140	paying business expenses or other expenses related to services
141	rendered or work performed for compensation;
142	(V) The independent contractor performs work or is able to
143	perform work for any entity in addition to or besides the
144	employer at his or her own election without the necessity of
145	completing an employment application or process; or
146	(VI) The independent contractor receives compensation for
147	work or services rendered on a competitive-bid basis or
148	completion of a task or a set of tasks as defined by a
149	contractual agreement, unless such contractual agreement
150	expressly states that an employment relationship exists.
151	b. If four of the above criteria do not exist, an
152	individual may still be presumed to be an independent contractor
153	and not an employee based on full consideration of the nature of
154	the individual situation with regard to satisfying any of the
155	following conditions:The independent contractor holds or has
156	applied for a federal employer identification number, unless the
157	independent contractor is a sole proprietor who is not required
158	to obtain a federal employer identification number under state
159	or federal requirements;
160	(I) The independent contractor performs or agrees to
161	perform specific services or work for a specific amount of money
162	and controls the means of performing the services or work;
163	(II) The independent contractor incurs the principal
164	expenses related to the service or work that he or she performs
165	or agrees to perform;
166	(III) The independent contractor is responsible for the
167	satisfactory completion of the work or services that he or she
168	performs or agrees to perform;
169	(IV) The independent contractor receives compensation for
170	work or services performed for a commission or on a per-job
171	basis and not on any other basis;
172	(V) The independent contractor may realize a profit or
173	suffer a loss in connection with performing work or services;
174	(VI) The independent contractor has continuing or
175	recurring business liabilities or obligations; and
176	(VII) The success or failure of the independent
177	contractor’s business depends on the relationship of business
178	receipts to expenditures.
179	c. Notwithstanding anything to the contrary in this
180	subparagraph, an individual claiming to be an independent
181	contractor has the burden of proving that he or she is an
182	independent contractor for purposes of this act.The independent
183	contractor performs or agrees to perform specific services or
184	work for specific amounts of money and controls the means of
185	performing the services or work;
186	d. The independent contractor incurs the principal
187	expenses related to the service or work that he or she performs
188	or agrees to perform;
189	e. The independent contractor is responsible for the
190	satisfactory completion of work or services that he or she
191	performs or agrees to perform and is or could be held liable for
192	a failure to complete the work or services;
193	f. The independent contractor receives compensation for
194	work or services performed for a commission or on a per-job or
195	competitive-bid basis and not on any other basis;
196	g. The independent contractor may realize a profit or
197	suffer a loss in connection with performing work or services;
198	h. The independent contractor has continuing or recurring
199	business liabilities or obligations; and
200	i. The success or failure of the independent contractor's
201	business depends on the relationship of business receipts to
202	expenditures.
203
204	However, the determination as to whether an individual included
205	in the Standard Industrial Classification Manual of 1987,
206	Industry Numbers 0711, 0721, 0722, 0751, 0761, 0762, 0781, 0782,
207	0783, 0811, 0831, 0851, 2411, 2421, 2435, 2436, 2448, or 2449,
208	or a newspaper delivery person, is an independent contractor is
209	governed not by the criteria in this paragraph but by common-law
210	principles, giving due consideration to the business activity of
211	the individual. Notwithstanding the provisions of this paragraph
212	or any other provision of this chapter, with respect to any
213	commercial building project estimated to be valued at $250,000
214	or greater, a person who is actively engaged in the construction
215	industry is not an independent contractor and is either an
216	employer or an employee who may not be exempt from the coverage
217	requirements of this chapter.
218	2. A real estate salesperson or agent, if that person
219	agrees, in writing, to perform for remuneration solely by way of
220	commission.
221	3. Bands, orchestras, and musical and theatrical
222	performers, including disk jockeys, performing in licensed
223	premises as defined in chapter 562, if a written contract
224	evidencing an independent contractor relationship is entered
225	into before the commencement of such entertainment.
226	4. An owner-operator of a motor vehicle who transports
227	property under a written contract with a motor carrier which
228	evidences a relationship by which the owner-operator assumes the
229	responsibility of an employer for the performance of the
230	contract, if the owner-operator is required to furnish the
231	necessary motor vehicle equipment and all costs incidental to
232	the performance of the contract, including, but not limited to,
233	fuel, taxes, licenses, repairs, and hired help; and the owner-
234	operator is paid a commission for transportation service and is
235	not paid by the hour or on some other time-measured basis.
236	5. A person whose employment is both casual and not in the
237	course of the trade, business, profession, or occupation of the
238	employer.
239	6. A volunteer, except a volunteer worker for the state or
240	a county, municipality, or other governmental entity. A person
241	who does not receive monetary remuneration for services is
242	presumed to be a volunteer unless there is substantial evidence
243	that a valuable consideration was intended by both employer and
244	employee. For purposes of this chapter, the term "volunteer"
245	includes, but is not limited to:
246	a. Persons who serve in private nonprofit agencies and who
247	receive no compensation other than expenses in an amount less
248	than or equivalent to the standard mileage and per diem expenses
249	provided to salaried employees in the same agency or, if such
250	agency does not have salaried employees who receive mileage and
251	per diem, then such volunteers who receive no compensation other
252	than expenses in an amount less than or equivalent to the
253	customary mileage and per diem paid to salaried workers in the
254	community as determined by the department; and
255	b. Volunteers participating in federal programs
256	established under Pub. L. No. 93-113.
257	7. Unless otherwise prohibited by this chapter,any
258	officer of a corporation who elects to be exempt from this
259	chapter.
260	8. Ana sole proprietor or officer of a corporation who
261	actively engages in the construction industry, and a partner in
262	a partnership that is activelyengaged in the construction
263	industry,who elects to be exempt from the provisions of this
264	chapter, as otherwise permitted by this chapter. Such sole
265	proprietor, officer, or partneris not an employee for any
266	reason until the notice of revocation of election filed pursuant
267	to s. 440.05 is effective.
268	9. An exercise rider who does not work for a single horse
269	farm or breeder, and who is compensated for riding on a case-by-
270	case basis, provided a written contract is entered into prior to
271	the commencement of such activity which evidences that an
272	employee/employer relationship does not exist.
273	10. A taxicab, limousine, or other passenger vehicle-for-
274	hire driver who operates said vehicles pursuant to a written
275	agreement with a company which provides any dispatch, marketing,
276	insurance, communications, or other services under which the
277	driver and any fees or charges paid by the driver to the company
278	for such services are not conditioned upon, or expressed as a
279	proportion of, fare revenues.
280	11. A person who performs services as a sports official
281	for an entity sponsoring an interscholastic sports event or for
282	a public entity or private, nonprofit organization that sponsors
283	an amateur sports event. For purposes of this subparagraph, such
284	a person is an independent contractor. For purposes of this
285	subparagraph, the term "sports official" means any person who is
286	a neutral participant in a sports event, including, but not
287	limited to, umpires, referees, judges, linespersons,
288	scorekeepers, or timekeepers. This subparagraph does not apply
289	to any person employed by a district school board who serves as
290	a sports official as required by the employing school board or
291	who serves as a sports official as part of his or her
292	responsibilities during normal school hours.
293	(16)(a)"Employer" means the state and all political
294	subdivisions thereof, all public and quasi-public corporations
295	therein, every person carrying on any employment, and the legal
296	representative of a deceased person or the receiver or trustees
297	of any person. If the employer is a corporation, parties in
298	actual control of the corporation, including, but not limited
299	to, the president, officers who exercise broad corporate powers,
300	directors, and all shareholders who directly or indirectly own a
301	controlling interest in the corporation, are considered the
302	employer for the purposes of ss. 440.105 and 440.106.
303	(b) A landowner shall not be considered the employer of
304	persons hired by the homeowner to carry out construction on the
305	homeowner’s own premises if those premises are not intended for
306	immediate sale or resale.
307	(41) "Commercial building" means any building or structure
308	intended for commercial or industrial use, or any building or
309	structure intended for multifamily use of more than four
310	dwelling units, as well as any accessory use structures
311	constructed in conjunction with the principal structure. The
312	term, "commercial building," does not include the conversion of
313	any existing residential building to a commercial building.
314	(42) "Residential building" means any building or
315	structure intended for residential use containing four or fewer
316	dwelling units and any structures intended as an accessory use
317	to the residential structure.
318	Section 2. Subsections (3), (6), (10), and (13) of section
319	440.05, Florida Statutes, are amended to read:
320	440.05 Election of exemption; revocation of election;
321	notice; certification.--
322	(3) Each sole proprietor, partner, orofficer of a
323	corporation who is activelyengaged in the construction industry
324	and who elects an exemption from this chapter or who, after
325	electing such exemption, revokes that exemption, must mail a
326	written notice to such effect to the department on a form
327	prescribed by the department. The notice of election to be
328	exempt from the provisions of this chapter must be notarized and
329	under oath. The notice of election to be exempt which is
330	submitted to the department by the sole proprietor, partner, or
331	officer of a corporation where such officer is allowed to claim
332	an exemption as provided by this chaptermust list the name,
333	federal tax identification number, social security number, all
334	certified or registered licenses issued pursuant to chapter 489
335	held by the person seeking the exemption, a copy of relevant
336	documentation as to employment status filed with the Internal
337	Revenue Service as specified by the department, a copy of the
338	relevant occupational license in the primary jurisdiction of the
339	business, and, for corporate officers and partners,the
340	registration number of the corporation or partnershipfiled with
341	the Division of Corporations of the Department of State along
342	with a copy of the stock certificate evidencing the required
343	ownership under this chapter. The notice of election to be
344	exempt must identify each sole proprietorship, partnership, or
345	corporation that employs the person electing the exemption and
346	must list the social security number or federal tax
347	identification number of each such employer and the additional
348	documentation required by this section. In addition, the notice
349	of election to be exempt must provide that the sole proprietor,
350	partner, orofficer electing an exemption is not entitled to
351	benefits under this chapter, must provide that the election does
352	not exceed exemption limits for officers and partnerships
353	provided in s. 440.02, and must certify that any employees of
354	the corporation, thesole proprietor, partner, or officer of
355	which is electing an exemption,are covered by workers'
356	compensation insurance. Upon receipt of the notice of the
357	election to be exempt, receipt of all application fees, and a
358	determination by the department that the notice meets the
359	requirements of this subsection, the department shall issue a
360	certification of the election to the sole proprietor, partner,
361	orofficer, unless the department determines that the
362	information contained in the notice is invalid. The department
363	shall revoke a certificate of election to be exempt from
364	coverage upon a determination by the department that the person
365	does not meet the requirements for exemption or that the
366	information contained in the notice of election to be exempt is
367	invalid. The certificate of election must list the namenamesof
368	the sole proprietorship, partnership, orcorporation listed in
369	the request for exemption. A new certificate of election must be
370	obtained each time the person is employed by a new sole
371	proprietorship, partnership, or differentcorporation that is
372	not listed on the certificate of election. A copy of the
373	certificate of election must be sent to each workers'
374	compensation carrier identified in the request for exemption.
375	Upon filing a notice of revocation of election, ana sole
376	proprietor, partner, or officer who is a subcontractor or an
377	officer of a corporate subcontractormust notify her or his
378	contractor. Upon revocation of a certificate of election of
379	exemption by the department, the department shall notify the
380	workers' compensation carriers identified in the request for
381	exemption.
382	(6) A construction industry certificate of election to be
383	exempt which is issued in accordance with this section shall be
384	valid for 2 years after the effective date stated thereon. Both
385	the effective date and the expiration date must be listed on the
386	face of the certificate by the department. The construction
387	industry certificate must expire at midnight, 2 years from its
388	issue date, as noted on the face of the exemption certificate.
389	Any person who has received from the division a construction
390	industry certificate of election to be exempt which is in effect
391	on December 31, 1998, shall file a new notice of election to be
392	exempt by the last day in his or her birth month following
393	December 1, 1998. A construction industry certificate of
394	election to be exempt may be revoked before its expiration by
395	the sole proprietor, partner, orofficer for whom it was issued
396	or by the department for the reasons stated in this section. At
397	least 60 days prior to the expiration date of a construction
398	industry certificate of exemption issued after December 1, 1998,
399	the department shall send notice of the expiration date and an
400	application for renewal to the certificateholder at the address
401	on the certificate.
402	(10) Each sole proprietor, partner, orofficer of a
403	corporation who is activelyengaged in the construction industry
404	and who elects an exemption from this chapter shall maintain
405	business records as specified by the division by rule, which
406	rules must include the provision that any corporation with
407	exempt officers and any partnership activelyengaged in the
408	construction industry with exempt partnersmust maintain written
409	statements of those exempted persons affirmatively acknowledging
410	each such individual's exempt status.
411	(13) Any corporate officer permitted by this chapter to
412	claimclaiming an exemption under this sectionmust be listed on
413	the records of this state's Secretary of State, Division of
414	Corporations, as a corporate officer. If the person who claims
415	an exemption as a corporate officer is not so listed on the
416	records of the Secretary of State, the individual must provide
417	to the division, upon request by the division, a notarized
418	affidavit stating that the individual is a bona fide officer of
419	the corporation and stating the date his or her appointment or
420	election as a corporate officer became or will become effective.
421	The statement must be signed under oath by both the officer and
422	the president or chief operating officer of the corporation and
423	must be notarized.The division shall issue a stop-work order
424	under s. 440.107(1) to any corporation who employs a person who
425	claims to be exempt as a corporate officer but who fails or
426	refuses to produce the documents required under this subsection
427	to the division within 3 business days after the request is
428	made.
429	Section 3. Section 440.077, Florida Statutes, is amended
430	to read:
431	440.077 When a corporatesole proprietor, partner, or
432	officer rejects chapter, effect.--Ana sole proprietor, partner,
433	or officer of a corporation who is permitted to elect an
434	exemption under this chapteractively engaged in the
435	construction industryand who elects to be exempt from the
436	provisions of this chapter may not recover benefits under this
437	chapter.
438	Section 4. Paragraphs (c), (d), and (g) of subsection (1)
439	of section 440.10, Florida Statutes, are amended to read:
440	440.10 Liability for compensation.--
441	(1)
442	(c) A contractor shallmayrequire a subcontractor to
443	provide evidence of workers' compensation insurance or a copy of
444	his or her certificate of election. A subcontractor that is a
445	corporation, and that has anelecting to be exempt as a sole
446	proprietor, partner, or officer who elects to be exempt, as
447	permitted under this chapter,of a corporationshall provide a
448	copy of his or her certificate of election of exemptionto the
449	contractor.
450	(d)1. If a contractor becomes liable for the payment of
451	compensation to the employees of a subcontractor who has failed
452	to secure such payment in violation of s. 440.38, the contractor
453	or other third-party payor shall be entitled to recover from the
454	subcontractor all benefits paid or payable plus interest unless
455	the contractor and subcontractor have agreed in writing that the
456	contractor will provide coverage.
457	2. If a contractor or third-party payor becomes liable for
458	the payment of compensation to the corporate officeremployeeof
459	a subcontractor who is activelyengaged in the construction
460	industry and has elected to be exempt from the provisions of
461	this chapter, but whose election is invalid, the contractor or
462	third-party payor may recover from the claimant, partnership,or
463	corporation all benefits paid or payable plus interest, unless
464	the contractor and the subcontractor have agreed in writing that
465	the contractor will provide coverage.
466	(g) For purposes of this section, a person is conclusively
467	presumed to be an independent contractor if:
468	1. The independent contractor provides the general
469	contractor with an affidavit stating that he or she meets all
470	the requirements of s. 440.02; and
471	2. The independent contractor provides the general
472	contractor with a valid certificate of workers' compensation
473	insurance or a valid certificate of exemption issued by the
474	department.
475
476	Ana sole proprietor, partner, orofficer of a corporation who
477	elects exemption from this chapter by filing a certificate of
478	election under s. 440.05 may not recover benefits or
479	compensation under this chapter. An independent contractor who
480	provides the general contractor with both an affidavit stating
481	that he or she meets the requirements of s. 440.02 and a
482	certificate of exemption is not an employee under s. 440.02 and
483	may not recover benefits under this chapter.For purposes of
484	determining the appropriate premium for workers' compensation
485	coverage, carriers may not consider any officer of a corporation
486	person who validlymeets the requirements of this paragraph to
487	be an employee.
488	Section 5. This act shall take effect upon becoming a law.