HB 933

1
A bill to be entitled
2An act relating to employee leasing companies; amending s.
3468.525, F.S.; requiring an employee licensing company to
4carry workers' compensation insurance coverage and provide
5notice to a client company within a specified period after
6an employee leasing arrangement is terminated; requiring a
7client company to provide an employee leasing company with
8certain written information regarding certain contractual
9relationships; requiring a client company to notify an
10employee leasing company of certain agreements within a
11specified period; requiring a client company to provide
12certain information about certain employees; amending s.
13468.529, F.S.; requiring an employee leasing company to
14secure workers' compensation coverage before obtaining or
15renewing a license; providing circumstances requiring a
16person to become an employee of a leasing company;
17requiring a client company to report within a specified
18period the hiring of specified employees and carry
19workers' compensation insurance for such employees;
20providing that a client company is liable for payment of
21certain expenses incurred by an employee leasing company
22for failure to report certain information within a
23specified period of time; requiring the employee leasing
24company to notify each leased employee or specified client
25company by mail of the termination of an employee leasing
26agreement; requiring certain information be included in
27the notice; specifying a period after which a specified
28leased employee is no longer covered by workers'
29compensation insurance; requiring issuance of a multiple
30coordinated policy to an employee leasing company when
31obtaining workers' compensation coverage; requiring a
32client company to apply its experience rating modification
33factor to workers' compensation charges made by the
34employee leasing company under a specified condition;
35requiring a client company that meets a specified
36condition to have its own experience rating modification
37factor used by a workers' compensation insurance carrier;
38requiring an employee leasing company meeting a specified
39condition to provide the client company with certain
40records regarding workers' compensation insurance within a
41specified period; specifying that certain immunity
42provisions apply only under a specified condition;
43amending s. 627.192, F.S.; deleting provisions allowing a
44lessor to make certain decisions regarding workers'
45compensation coverage; requiring a lessor applying for or
46covered by a workers' compensation insurance policy to
47provide certain information to the insurer; revising the
48time period to notify certain individuals covered under a
49workers' compensation policy of the cancellation of such
50policy; providing an effective date.
51
52Be It Enacted by the Legislature of the State of Florida:
53
54     Section 1.  Paragraph (f) of subsection (4) of section
55468.525, Florida Statutes, is amended, paragraph (h) is added to
56subsection (3), and paragraphs (g) through (j) are added to
57subsection (4) of that section, to read:
58     468.525  License requirements.-
59     (3)  Each employee leasing company licensed by the
60department shall have a registered agent for service of process
61in this state and at least one licensed controlling person. In
62addition, each licensed employee leasing company shall comply
63with the following requirements:
64     (h)  Each employee leasing company must, regardless of the
65number of leased employees, maintain at all times a workers'
66compensation policy acceptable under the laws of this state
67providing coverage for such employees.
68     (4)  The employee leasing company's contractual
69arrangements with its client companies shall satisfy the
70following conditions, whereby the leasing company:
71     (f)  Gives Has given written notice of the relationship
72between the employee leasing company and the client company to
73each leased employee it assigns to perform services at the
74client's worksite.
75     (g)  Provides 30 days' notice to the client company before
76termination of an employee leasing agreement.
77     (h)  Requires the client company to provide in writing to
78the employee leasing company the names and addresses of all
79parties with which it has a contractor relationship at the time
80of entering into the employee leasing arrangement. The client
81company must notify the employee leasing company within 48 hours
82after entering into a subcontractor relationship with a third
83party or immediately upon commencement of such contract work, if
84earlier.
85     (i)  Secures the workers' compensation coverage for the
86leased employees.
87     (j)  Requires the client company to provide to the employee
88leasing company in writing the names of any direct, nonleased
89employees employed by the client company at the time of entering
90into the employee leasing arrangement.
91     Section 2.  Section 468.529, Florida Statutes, is amended
92to read:
93     468.529  Licensee's insurance; employment tax; benefit
94plans.-
95     (1)  A licensed employee leasing company is the employer of
96the leased employees, except that this provision is not intended
97to affect the determination of any issue arising under Pub. L.
98No. 93-406, the Employee Retirement Income Security Act, as
99amended from time to time. An employee leasing company is solely
100shall be responsible for timely payment of unemployment taxes
101pursuant to chapter 443, and is shall be responsible for
102obtaining providing workers' compensation coverage pursuant to
103this part and chapter 440. However, no licensed employee leasing
104company shall sponsor a plan of self-insurance for health
105benefits, except as may be permitted by the provisions of the
106Florida Insurance Code or, if applicable, by Pub. L. No. 93-406,
107the Employee Retirement Income Security Act, as amended from
108time to time. For purposes of this section, a "plan of self-
109insurance" shall exclude any arrangement where an admitted
110insurance carrier has issued a policy of insurance primarily
111responsible for the obligations of the health plan.
112     (2)  An initial or renewal license may not be issued to any
113employee leasing company unless the employee leasing company
114first files with the board evidence that it has secured of
115workers' compensation coverage for all leased employees in this
116state before such license may be issued. Each employee leasing
117company shall maintain and make available to its workers'
118compensation carrier the following information:
119     (a)  The correct name and federal identification number of
120each client company.
121     (b)  A listing of all covered employees provided to each
122client company, by classification code.
123     (c)  The total eligible wages by classification code and
124the premiums due to the carrier for the employees provided to
125each client company.
126     (3)  A licensed employee leasing company shall within 30
127days after initiation or termination of an employee leasing
128arrangement notify its workers' compensation insurance carrier,
129the Division of Workers' Compensation of the Department of
130Financial Services, and the state agency providing unemployment
131tax collection services under contract with the Agency for
132Workforce Innovation through an interagency agreement pursuant
133to s. 443.1316 of both the initiation or the termination of the
134company's relationship with any client company.
135     (4)  During the term of an employee leasing arrangement
136with a client company, a person must become an employee of the
137leasing company upon the earlier of the following:
138     (a)  The hiring of such person by the client company;
139     (b)  The commencement of work for the client company by
140such person; or
141     (c)  The hiring of the person directly by the employee
142leasing company.
143     (5)  A client company that hires direct, nonleased
144employees must report such employees to the employee leasing
145company within 48 hours after hiring. The client company must
146have an active workers' compensation policy covering such
147direct, nonleased employees. If an employee leasing company
148becomes liable for the payment of workers' compensation benefits
149to one of its employees hired by the client company, and the
150client company has failed to report such hiring within 48 hours
151after hiring, the employee leasing company's insurer, or the
152employee leasing company if self-insured, is entitled to recover
153from the client company three times the amount of premium and
154administrative costs that would have been owed by the client
155company if the employee had been reported.
156     (6)(a)  When an employee leasing arrangement is terminated,
157the employee leasing company must send notice of the termination
158by first-class United States mail to the last known address of
159each leased employee who had been assigned to the terminated
160client company. The notification must state the date that the
161employee leasing arrangement was terminated. If the client
162company is a contractor or involved in the construction
163industry, the employee leasing company must send the notice to
164all contractors with whom the client company has contracted.
165     (b)  A leased employee who remains employed by a terminated
166client company is not covered by the workers' compensation
167policy of the employee leasing company upon the 31st day after
168the employee leasing company terminates its relationship with
169the client company.
170     (7)  The responsibility to obtain workers' compensation
171coverage for leased employees must be by way of a multiple
172coordinated policy issued to the employee leasing company.
173     (8)  Any client company covered by an insurer, other than
174an insurer for an employee leasing company, which enters into an
175employee leasing arrangement must have the experience rating
176modification factor it has developed applied to charges made by
177the employee leasing company for workers' compensation coverage
178and premium.
179     (9)  Any client company who terminates a leasing
180arrangement or has such leasing arrangement terminated by the
181employee leasing company must have its own experience rating
182modification factor used by any carrier who provides coverage
183for such client company.
184     (10)  Within 15 days after termination of an employee
185leasing agreement, the employee leasing company must provide the
186client company an opportunity to receive records regarding the
187loss experience of the workers' compensation insurance during
188the course of the employee leasing agreement.
189     (11)  Except as otherwise provided in s. 627.192(7) or
190chapter 440, s. 440.11(2) applies to the employee leasing
191company, the client company, and all other persons set forth in
192s. 440.11(2) only if workers' compensation coverage is secured
193for leased employees by the employee leasing company.
194     (12)(4)  An initial or renewal license may not be issued to
195any employee leasing company unless the employee leasing company
196first provides evidence to the board, as required by board rule,
197that the employee leasing company has paid all of the employee
198leasing company's obligations for payroll, payroll-related
199taxes, workers' compensation insurance, and employee benefits.
200All disputed amounts must be disclosed in the application.
201     (13)(5)  The provisions of this section are subject to
202verification by department or board audit.
203     Section 3.  Section 627.192, Florida Statutes, is amended
204to read:
205     627.192  Workers' compensation insurance; employee leasing
206arrangements.-
207     (1)  The purpose of this section is to ensure that an
208employer who leases some or all of its workers properly obtains
209workers' compensation insurance coverage for all of its
210employees, including those leased from or coemployed with
211another entity, and that premium paid by an employee leasing
212company is commensurate with exposure and anticipated claim
213experience for all employees.
214     (2)  For purposes of the Florida Insurance Code:
215     (a)  "Employee leasing" shall have the same meaning as set
216forth in s. 468.520(4).
217     (b)  "Experience rating modification" means a factor
218applied to a premium to reflect a risk's variation from the
219average risk. The experience modification is determined by
220comparing actual losses to expected losses, using the risk's own
221past experience.
222     (c)  "Leased employee" means a person performing services
223for a lessee under an employee leasing arrangement.
224     (d)  "Lessee" means an entity which obtains all or part of
225its workforce from another entity through an employee leasing
226arrangement or which employs the services of an entity through
227an employee leasing arrangement.
228     (e)  "Lessor" means an employee leasing company, as set
229forth in part XI of chapter 468, engaged in the business of or
230holding itself out as being in the business of employee leasing.
231A lessor may also be referred to as an employee leasing company.
232     (f)  "Premium subject to dispute" means that the insured
233has provided a written notice of dispute to the insurer or
234service carrier, has initiated any applicable proceeding for
235resolving such disputes as prescribed by law or rating
236organization procedures approved by the office, or has initiated
237litigation regarding the premium dispute. The insured must have
238detailed the specific areas of dispute and provided an estimate
239of the premium the insured believes to be correct. The insured
240must have paid any undisputed portion of the bill.
241     (3)  A lessor that obtains coverage in the voluntary
242workers' compensation market may elect, with the voluntary
243market insurer's knowledge and consent, to secure the coverage
244on leased employees through a workers' compensation policy
245issued to the lessor. The insurer of the lessor may, in its
246discretion, take all reasonable steps to ascertain exposure
247under the policy and collect the appropriate premium by:
248     (a)  Requiring the lessor to provide a complete description
249of lessor's operations.
250     (b)  Requiring periodic reporting by the lessor of covered
251lessees' payroll, classifications, claims information, loss
252data, and jurisdictions with exposure. This reporting may be
253supplemented by a requirement for lessees to submit to the
254carrier Internal Revenue Service Form 941 or its equivalent on a
255quarterly basis.
256     (c)  Auditing the lessor's operations.
257     (d)  Using other reasonable measures to determine the
258appropriate premium.
259     (3)(4)  A lessor that applies for coverage or is covered by
260a workers' compensation insurance policy through the voluntary
261market shall also maintain and furnish to the insurer on an
262annual basis, and as the insurer may otherwise reasonably
263require, sufficient information to permit the calculation of an
264experience rating modification factor for each lessee upon
265termination of the employee leasing relationship. Information
266accruing during the term of the leasing arrangement which is
267used to calculate an experience rating modification factor for a
268lessee upon termination of the leasing relationship shall
269continue to be used in the future experience ratings of the
270lessor. Such information shall include:
271     (a)  The lessee's corporate name.
272     (b)  The lessee's taxpayer or employer identification
273number.
274     (c)  Payroll summaries and class codes applicable to each
275lessee, and, if requested by the insurer, a listing of all
276leased employees associated with a given lessee.
277     (d)  Claims information grouped by lessee, and any other
278information maintained by or readily available to the lessor
279that is necessary for the calculation of an experience rating
280modification factor for each lessee.
281     (4)(5)  In addition to any other provision of law, any
282material violation of this section by an employee leasing
283company is grounds for cancellation or nonrenewal of the
284lessor's insurance policy provided that the employee leasing
285company has been provided a reasonable opportunity to cure the
286violation. If an employee leasing company has received notice
287that its workers' compensation insurance policy will be canceled
288or nonrenewed, the leasing company shall notify by certified
289mail, within 5 15 days after receipt of the notice, all of the
290lessees for which there is an employee leasing arrangement
291covered under the policy to be canceled, except notice is not
292required if the employee leasing company has obtained another
293insurance policy with an effective date that is the same as the
294date of cancellation or nonrenewal.
295     (5)(6)  If the employee leasing arrangement with a lessee
296is terminated, the lessee shall be assigned an experience rating
297modification factor which reflects its experience during the
298experience period specified by the approved experience rating
299plan, including, if applicable, experience incurred for leased
300employees under the employee leasing arrangements. The employee
301leasing company shall notify the insurer of its intent to
302terminate any lessee relationship prior to termination when
303feasible. When prior notice is not feasible, the employee
304leasing company shall notify its insurer within 5 working days
305following actual termination.
306     (6)(7)  This section shall not have any effect on the
307statutory obligation, if any, of a lessee to secure workers'
308compensation coverage for employees that the lessee does not
309coemploy or lease pursuant to an employee leasing arrangement.
310     (7)(8)  A lessee shall not enter into an employee leasing
311relationship or be eligible for workers' compensation coverage
312in the voluntary market if the lessee owes its current or a
313prior insurer any premium for workers' compensation insurance,
314or if the lessee owes its current or prior employee leasing
315company amounts due under the service agreement, except for
316premium or amounts due that are subject to dispute. For the
317purposes of this section and compliance with other laws and
318regulations, a lessor may rely on a sworn statement by the
319lessee that the lessee has met any and all prior premium or fee
320obligations, unless the lessor has actual knowledge to the
321contrary.
322     (8)(9)  Insurers shall conduct annual audits of payroll and
323classifications of employee leasing companies in order to ensure
324that the appropriate premium is charged for workers'
325compensation coverage. The audits shall be conducted to ensure
326that all sources of payment by lessors to employees,
327subcontractors, and independent contractors have been reviewed
328and the accuracy of classifications of employees has been
329verified. Insurers may provide for more frequent audits of
330lessors based on such factors as amount of premium, type of
331business, loss ratios, or other relevant factors. Payroll and
332classification verification audit rules of insurers must
333include, but need not be limited to, use by the insurer of state
334and federal reports of employee income, payroll and other
335accounting records, certificates of insurance maintained by
336subcontractors, and duties of employees.
337     (9)(10)  If a lessor or a lessee fails to provide
338reasonable access to payroll and classification records for a
339payroll and classification audit, the insured shall pay a
340premium to the insurer not to exceed three times the most recent
341estimated annual premium. However, the lessor is not subject to
342such penalty if the failure to obtain the needed records is the
343direct result of the acts or omissions of the lessee.
344     Section 4.  This act shall take effect July 1, 2011.


CODING: Words stricken are deletions; words underlined are additions.