Committee Yet Again Delays Hearing PEO Unfriendly Florida HB1305

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We just learned from NAPEO that the House Commerce Committee has again delayed hearing HB 1305. The bill is NOT on this week’s agenda. This is GREAT news!

Our efforts are working! What was a tenuous situation at the beginning of session appears to be calmed down… for now.

The Florida legislature adjourns on April 30, so it’s increasingly likely that HB 1305 will not make it out of committee, however, that’s not a guarantee. We will keep you updated as soon as there is more news to report. Thank you so much for your efforts so far and making our voice heard. We’re moving in the right direction with the understanding that even if this battle is won, there will still be an ensuing war to wage to make sure that “The Gap in Coverage Myth” is buried with this bill.

Florida House Bill 1305 Stalls for Now

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One in Four construction workers in Florida lack workers compensation – a bigger issue is at hand; premium fraud in the construction industry.

When the House Commerce Committee agenda for April 14, 2021 was announced in Florida at 4:30 yesterday the 12’th, thankfully, HB 1305 was not a part of it. While this does not mean that the bill still cannot be taken up by the House Commerce Committee when it meets again Monday April 19’th, every day that passes is one less in the Legislative Session for this bill to get further traction.

We appreciate foremost the grass roots efforts of all PEO industry advocates in making sure that the real issue is addressed; the plight of uninsured worker. Further research by industry insiders has found that there are material amounts of workers in Florida whom are being passed off as 1099 employees (more on that to come) and still others that are being flatly paid under the table in cash. Add a language barrier that often exists with a typical construction worker in Florida and it is the backdrop for at best confusion and often times, unnecessary litigation. This is the dirty little secret trying to be pinned on the PEO industry.

Both FAPEO and NAPEO continue to do a good job in communicating the issues at hand and making sure that we are well represented in Tallahassee and the real issues are being addressed.

The focus of uninsured employees in workers’ compensation must be addressed. The lobbyist of the opposition went on public record that one in four workers on any given job site lack workers’ compensation insurance. Since PEO’s supply only one of seven checks to construction workers in Florida and these are workers that must be submitted as employees, that leaves a lot of claimants may finally be realized is not an offshoot of being in a PEO relationship,

Please continue to reach out to the following lawmakers to enforce that premium fraud is addressed in the State of Florida, not the legislation of it:

Here are the individuals to contact: 

Representative Webster Barnaby (Orange City)  Webster.Barnaby@myfloridahouse.gov

Representative Dan Daley (Sunrise) Dan.Daley@myfloridahouse.gov

Representative Brad Drake (DeFuniak Springs) rad.drake@myfloridahouse.gov

Representative Joe Geller (Dania Beach) joseph.geller@myfloridahouse.gov

Representative Chris Latvala (Clearwater) Chris.Latvala@myfloridahouse.gov

Representative Randy Maggard (Zephyrhills) randy.maggard@myfloridahouse.gov

Representative Lawrence McClure (Plant City) Lawrence.McClure@myfloridahouse.gov

Representative Angela ‘Angie’ Nixon (Jacksonville) Angie.Nixon@myfloridahouse.gov

Representative Anika Tene Omphroy (Sunrise) Anika.Omphroy@myfloridahouse.gov

Representative Scott Plakon (Longwood) Scott.Plakon@myfloridahouse.gov

Representative Rene Plasencia (Titusville) Rene.Plasencia@myfloridahouse.gov

Representative Anthony Rodriguez (Miami) Anthony.Rodriguez@myfloridahouse.gov

Representative Bob Rommel (Naples) Bob.Rommel@myfloridahouse.gov

Representative Jason Shoaf (Blountstown) jason.shoaf@myfloridahouse.gov

Representative David Silvers (West Palm Beach) David.Silvers@myfloridahouse.gov

Representative Emily Slosberg (Delray Beach) Emily.Slosberg@myfloridahouse.gov

Representative Josie Tomkow (Auburndale) Josie.Tomkow@myfloridahouse.gov

Representative Matt Willhite (Wellington)   Matt.Willhite@myfloridahouse.gov

Thank you for your help. This is not over and will not be in my mind until we prove the point that this is a premium fraud issue, not a PEO issue. Please reach out and let those that represent us know!

Bill Attacking PEOs in FL House Commerce Committee Not Being Heard This Week

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I am happy to understand from our friends at the Florida Association of Professional Employer Organizations (“FAPEO”) that Florida House Bill 1305 will not be heard by The House Commerce Committee Agenda for their Tuesday, April 6’th meeting. The House Commerce Committee agenda can be found here – https://www.myfloridahouse.gov/Sections/Committees/committeesdetail.aspx?CommitteeId=3098

…along with all of the members of this committee.

While FAPEO and NAPEO will continue working with members of committee to help them understand this is a bad bill, it cannot be stressed enough how much your grass roots efforts has slowed down the momentum of what seemed to be a runaway freight train a few weeks back. Thanks for stepping up, but its not over yet this year never mind in the future. There has never been a gap in what a PEO covers and we need to use this opportunity to memorialize this lack of issue. It should be noted this bill can still appear on a future committee meeting agenda this year and for sure if not passed, will be teed up for another run next year at PEO. 

Thank you for all of your help with this bill and let’s not just defeat it this year, let’s bury it for good.

*** A reminder announcement from FAPEO on the bill below ***

From: Robert Skrob 
Subject: Bill Attacking PEO

HB 1305 – Workers’ Compensation Insurance for Employee Leasing Companies has been assigned to the House Commerce Committee.  At 4:30 pm this Friday we will find out if the bill will be considered at the House Commerce Committee next Tuesday.  

The time for outreach to members of the committee is NOW.   

Here’s text of the bill so you can see how damaging that language could be to the PEO Industry. 

Like the bill before, the amended bill shifts liability from construction contractors to PEOs for workers compensation fraud.  

Will you support our efforts to kill this bad bill by sending  an email to members of the House Commerce Committee? If this bill moves forward, these are the individuals who will consider this bad proposal.  It’s important to start our outreach now.  

If you know any of these Representatives personally, please let me know.  

Here are some talking points to select from and adapt for this communication:  

  • An employee leasing company covers 100 percent of their employees with workers compensation coverage.
  • What bill proponents call a “gap in coverage” is simply workers compensation fraud in construction (paying under the table) and has been persistent in Florida in the traditional business model as well with subcontractors utilizing an employee leasing company arrangement.
  • Rather than work to address the underlying problem of workers comp fraud, the bill only shifts liability from general contractors to employee leasing companies for workers comp fraud.
  • This bill would only increase workers compensation fraud in construction in Florida.
  • It financially encourages general contractors to turn a blind eye to both the price of a subcontractors work and checking workers for employees of subcontractors who are on their jobsite for without  required workers compensation coverage. 

Here are the individuals to contact: 

Representative Webster Barnaby (Orange City)  Webster.Barnaby@myfloridahouse.gov

Representative Dan Daley (Sunrise) Dan.Daley@myfloridahouse.gov

Representative Brad Drake (DeFuniak Springs) rad.drake@myfloridahouse.gov

Representative Joe Geller (Dania Beach) joseph.geller@myfloridahouse.gov

Representative Chris Latvala (Clearwater) Chris.Latvala@myfloridahouse.gov

Representative Randy Maggard (Zephyrhills) randy.maggard@myfloridahouse.gov

Representative Lawrence McClure (Plant City) Lawrence.McClure@myfloridahouse.gov

Representative Angela ‘Angie’ Nixon (Jacksonville) Angie.Nixon@myfloridahouse.gov

Representative Anika Tene Omphroy (Sunrise) Anika.Omphroy@myfloridahouse.gov

Representative Scott Plakon (Longwood) Scott.Plakon@myfloridahouse.gov

Representative Rene Plasencia (Titusville) Rene.Plasencia@myfloridahouse.gov

Representative Anthony Rodriguez (Miami) Anthony.Rodriguez@myfloridahouse.gov

Representative Bob Rommel (Naples) Bob.Rommel@myfloridahouse.gov

Representative Jason Shoaf (Blountstown) jason.shoaf@myfloridahouse.gov

Representative David Silvers (West Palm Beach) David.Silvers@myfloridahouse.gov

Representative Emily Slosberg (Delray Beach) Emily.Slosberg@myfloridahouse.gov

Representative Josie Tomkow (Auburndale) Josie.Tomkow@myfloridahouse.gov

Representative Matt Willhite (Wellington)   Matt.Willhite@myfloridahouse.gov

Thank you for your help. 

To give you a bit of perspective on where this bill is in the Legislative process.  To become law this bill would have to pass House Commerce Committee before reaching the House floor, getting on the agenda and passing the House.  In addition, this bill would need to pass through three committees in the Senate and pass through the Senate floor vote with the exact same language as the House bill.  And, all of this would have to happen by April 30th

We are fighting to kill this bill every step of the way.  Your efforts are a huge help. Thank you! 

Florida PEO Legislative and Legal Update: April 21st at 2p est.

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SAVE THE DATE: Given all of the recent legislative activity in Florida, you will not want to miss the upcoming FAPEO PEO Legislative and Legal Update on 4/21/21 at 2p est. See details and login information below.

On April 21st there will be ten days left of Florida’s legislative session and there remain a lot of unanswered questions. One bill provides SUTA rate relief for all Florida job creators hit with rate increases from social costs from the pandemic. Another bill would shift liability for workers’ compensation fraud from construction contractors to PEOs. You’ll discover which bills have stopped moving forward as well as which ones are likely to become law.  And, what this means for your PEO. 

No registration necessary.  Just show-up on April 21st at 2:00 pm Eastern by clicking: HERE

If you don’t have an electronic device with an internet connection you may access via phone: 

Phone: (929) 205-6099

Meeting ID: 829 5013 3757

Passcode: 738647

Florida PEO Legislative & Legal Update

Wednesday, April 21, 2021

2:00 pm – 4:00 pm Eastern/1:00 pm – 3:00 PM Central

Florida PEO Legislative Briefing

  • David Daniel, Florida PEO Governmental Affairs, Smith, Bryan & Myers 

Legal Issues Impacting Your PEO

  • Michael Miller, FAPEO General Counsel, Fisher & Phillips LLP

Deputy General Counsel Report

  • Torben Madson, FAPEO Deputy General Counsel, The PEO Law Firm

National PEO Legislative & Legal Issues Briefing

  • Nick Kapiotis, General Counsel
  • Michael Kreiter, Senior Director of State Government Affairs, National Association of Professional Employer Organizations

Latest from FAPEO regarding HB 1305

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HB 1305 – Workers’ Compensation Insurance for Employee Leasing Companies has been assigned to the House Commerce Committee.  At 4:30 pm this Friday we will find out if the bill will be considered at the House Commerce Committee next Tuesday.  

The time for outreach to members of the committee is NOW.   

Here’s text of the bill so you can see how damaging that language could be to the PEO Industry. 

Like the bill before, the amended bill shifts liability from construction contractors to PEOs for workers compensation fraud.  

Will you support our efforts to kill this bad bill by sending  an email to members of the House Commerce Committee? If this bill moves forward, these are the individuals who will consider this bad proposal.  It’s important to start our outreach now.  

If you know any of these Representatives personally, please let me know.  

Here are some talking points to select from and adapt for this communication:  

·        An employee leasing company covers 100 percent of their employees with workers compensation coverage.

·        What bill proponents call a “gap in coverage” is simply workers compensation fraud in construction (paying under the table) and has been persistent in Florida in the traditional business model as well with subcontractors utilizing an employee leasing company arrangement.

·        Rather than work to address the underlying problem of workers comp fraud, the bill only shifts liability from general contractors to employee leasing companies for workers comp fraud.

·        This bill would only increase workers compensation fraud in construction in Florida.

·        It financially encourages general contractors to turn a blind eye to both the price of a subcontractors work and checking workers for employees of subcontractors who are on their jobsite forwithout  required workers compensation coverage. 

Here are the individuals to contact: 

Representative Webster Barnaby (Orange City)  Webster.Barnaby@myfloridahouse.gov

Representative Dan Daley (Sunrise) Dan.Daley@myfloridahouse.gov

Representative Brad Drake (DeFuniak Springs) rad.drake@myfloridahouse.gov

Representative Joe Geller (Dania Beach) joseph.geller@myfloridahouse.gov

Representative Chris Latvala (Clearwater) Chris.Latvala@myfloridahouse.gov

Representative Randy Maggard (Zephyrhills) randy.maggard@myfloridahouse.gov

Representative Lawrence McClure (Plant City) Lawrence.McClure@myfloridahouse.gov

Representative Angela ‘Angie’ Nixon (Jacksonville) Angie.Nixon@myfloridahouse.gov

Representative Anika Tene Omphroy (Sunrise) Anika.Omphroy@myfloridahouse.gov

Representative Scott Plakon (Longwood) Scott.Plakon@myfloridahouse.gov

Representative Rene Plasencia (Titusville) Rene.Plasencia@myfloridahouse.gov

Representative Anthony Rodriguez (Miami) Anthony.Rodriguez@myfloridahouse.gov

Representative Bob Rommel (Naples) Bob.Rommel@myfloridahouse.gov

Representative Jason Shoaf (Blountstown) jason.shoaf@myfloridahouse.gov

Representative David Silvers (West Palm Beach) David.Silvers@myfloridahouse.gov

Representative Emily Slosberg (Delray Beach) Emily.Slosberg@myfloridahouse.gov

Representative Josie Tomkow (Auburndale) Josie.Tomkow@myfloridahouse.gov

Representative Matt Willhite (Wellington)   Matt.Willhite@myfloridahouse.gov

Thank you for your help. 

To give you a bit of perspective on where this bill is in the Legislative process.  To become law this bill would have to pass House Commerce Committee before reaching the House floor, getting on the agenda and passing the House.  In addition, this bill would need to pass through three committees in the Senate and pass through the Senate floor vote with the exact same language as the House bill.  And, all of this would have to happen by April 30th

We are fighting to kill this bill every step of the way.  Your efforts are a huge help. Thank you!

Bill Attacking PEOs Moves to Commerce Committee

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See the latest news from FAPEO regarding HB 1305. Interesting and concerning to note that someone ‘in House leadership pushed to advance this bill by having it removed from the sub-committee’.

HB 1305 – Workers’ Compensation Insurance for Employee Leasing Companies was removed from the House State Administration & Technology Appropriations Subcommittee and assigned directly to the House Commerce Committee today. 

This means someone in House leadership pushed to advance this bill by having it removed from the sub-committee. 

The House Commerce Committee meets today at 4:00 pm, but the agenda deadline has already passed.  The Commerce Committee meeting after today is Tuesday, April 6th with the agenda due at 4:30 pm on Friday.  

We should expect the bill to be on the Commerce Committee agenda 12:30PM – 2:30PM on Tuesday, April 6, 2020. 

Many of the members of the House Commerce Committee already voted on the bill as members of the House Insurance & Banking Subcommittee.  We have begun outreach to members of that committee.  

We will discuss this bill and next steps on our FAPEO Board of Directors call on Wednesday, March 31st at 10:00 am. 

To become law this bill would have to pass House Commerce Committee before reaching the House floor, getting on the agenda and passing the House.  In addition, this bill would need to pass through three committees in the Senate and pass through the Senate floor vote with the exact same language as the House bill.  And, all of this would have to happen by April 30th

We continue to fight this bill at every step to prevent lawmakers from shifting liability increasing the incentive for workers’ compensation fraud in the construction industry.

House Bill 1305: Week in Review

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Happy Friday!

Here’s a recap of the recent activity regarding House Bill 1305:

  • The bill now moves to the House State Administration & Technology Appropriations Subcommittee. This hearing could be as early as Thursday, April 1, 2021
  • NAPEO and FAPEO have asked that we all email our state representatives regarding why this bill is bad for the PEO industry

More to come…

Have a great weekend!

PEO Unfriendly House Bill 1305 Passed in Florida

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Unfortunately, HB 1305 – Workers’ Compensation Insurance for Employee Leasing Companies passed through the House Insurance & Banking Subcommittee Tuesday, March 23’rd.  

The bill was amended, the entire bill was replaced with a new version.  Here’s the amendment which replaced the previous text of the bill so you can see how damaging that language could be to the PEO Industry.

It is important that we all reach out and thank those that voted for PEO and more choice for Florida businesses. Please send a message of THANK YOU to these lawmakers for standing up to support PEO’s in Florida: 

Representative Kamia L. Brown (Orlando)  Kamia.Brown@myfloridahouse.gov

Representative Fentrice Driskell (Tampa) Fentrice.Driskell@myfloridahouse.gov

Representative William Cloud ‘Will’ Robinson (Bradenton)  Will.Robinson@myfloridahouse.gov

This bill now moves to the House State Administration & Technology Appropriations Subcommittee. FAPEO, NAPEO and all interested stakeholders are working to prevent this bill from getting heard and killing this bill outright.  

We will alert you to the new committee members that will be our focus to educate on why this bill is bad for Florida.

As a reminder, here are some talking points to select from and adapt for this communication:  

  • An employee leasing company covers 100 percent of their employees with workers compensation coverage.
  • What bill proponents call a “gap in coverage” is simply workers compensation fraud in construction (paying under the table) and has been persistent in Florida in the traditional business model as well with subcontractors utilizing an employee leasing company.
  • Rather than work to address the underlying problem of workers comp fraud, the bill only shifts liability from general contractors to employee leasing companies for workers comp fraud.
  • This  bill would only increase workers compensation fraud in construction in Florida.
  • It financially encourages general contractors to turn a blind eye to both the price of a subcontractors work and checking workers for subcontractors who are on their jobsite for workers compensation coverage. 
  • And it reduces workers compensation coverage options for small to medium sized construction companies that already have limited options for coverage in the open market.

PEO Bill 1305 Amendment #1 Entered Yesterday, Reviewed Today

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The formal agenda for today’s meeting starting at 9:30 am is below

Insurance & Banking Subcommittee

Start Date and Time: Tuesday, March 23, 2021 9:30 AM

End Date and Time: Tuesday, March 23, 2021 12:15 PM

Location:Webster Hall (212 Knott)

Duration:2.75

Consideration of the following bill(s):
  • HB 1305 – Workers’ Compensation Insurance for Employee Leasing Companies
  • HB 1593 – Seminole County
Consideration of the following proposed committee substitute(s):
  • PCS for HB 305 – Insurance

Meeting Overview/Summary:This meeting will be live-streamed on https://thefloridachannel.org/. Persons who wish to attend must register at www.myfloridahouse.gov, and pick up a pass at the Legislative Welcome Center on the 4th Floor of the Capitol beginning one hour before the start of the meeting. Audience seating will be socially distanced and will be available on a first-come, first-served basis. Registration closes three hours before the meeting starts.

______________________________________________________________________________________________________

At 4:45 pm yesterday, an amendment https://static-s3.lobbytools.com/bills/2021/pdf/1305923915.pdf to the already egregious House Bill 1305 as previously written was filed to be reviewed by the Insurance and Banking Subcommittee today. Key changes this amendment brings are as follows:

  • This amendment section 2, subsection (4), paragraph (g) – “Provides that during the term of the employee leasing arrangement, if the client company is a subcontractor engaged in the construction industry, all leased and nonleased employees of the subcontractor, including any such employees who are hired by the subcontractor, commence work for the subcontractor, or are hired directly by the employee leasing company during the term of the employee leasing arrangement, are deemed employees of the employee leasing company for purposes of workers’ compensation coverage”.
  • This amendment section 2, subsection (4), paragraph (h), “Provides at least 10 days’ notice to a client company who is a subcontractor engaged in the construction industry before terminating an employee leasing arrangement.If the termination is for cause, allows the client company to cure any contractual defaults or deficiencies within the time frame”.
  • Amendment section 4, “During the term of an employee leasing arrangement with a client company who is a subcontractor engaged in the construction industry, all leased and nonleased employees of the subcontractor, including any such employees who are hired by the subcontractor, commence work for the subcontractor, or are hired directly by the employee leasing company during the term of the employee leasing arrangement, are deemed employees of the employee leasing company for purposes of workers’ compensation coverage”.
  • Amendment section 7, “If an employee leasing arrangement between an employee leasing company and a client company who is a subcontractor engaged in the construction industry is terminated, the employee leasing company must send notice by first class mail to the last known address of each employee who was assigned to the client company. The notification must include the date the employee leasing arrangement was terminated. The notice must also be sent by first class mail to all contractors with whom the client company has contracted, if known.
  • Amendment section 8, “Workers’ compensation coverage must continue to be provided by the employee leasing company
  • for 20 days after the leasing company terminates the arrangement with a client company who is a subcontractor engaged in the construction industry.”

    This language if added and passed will effectively prevent those in the construction industry from doing business with a PEO.

    The original language of HB 1305 impacts PEO’s in Florida in the following ways:

    • This bill https://flsenate.gov/Session/Bill/2021/1305/BillText/Filed/PDF, unlike SB 820, is focused only on the construction industry
    • If passed, the PEO is on the hook for workers’ compensation for all employees of any subcontractor, whether reported or not – the PEO arrangement automatically covers the uninsured employees without the subcontractor having to pay a premium for the coverage
    • If passed, it allows those that are fraudulently doing business without insurance to have a safety net to bail them out
    • If passed, the workers’ compensation market for construction accounts will constrict rapidly, especially for General Contractors and those that rely heavily on sub-contracted work
    • If passed, WC coverage (coemployment) starts now at hiring level of the subcontractor and employee, versus when employee is reported to PEO 
    • The language of this bill keeps bringing up the “hiring the person directly by the employee leasing company”, which tells me there is confusion that a PEO would normally hire employees for a client company – I believe there is confusion with the staffing industry
    • Section 3 (4) “During the term of an employee leasing arrangement with a subcontractor, if a subcontractor does not obtain workers’ compensation insurance for non-leased employees, a person is deemed an employee of the employee leasing company for purposes of workers’ compensation insurance” – read anyone on the job-site that cannot prove they have their own workers’ compensation coverage will fall back on GC and thus PEO
    • It is anticipated that further argument is going to be made on a minimum amount of days (prob 30) to give a client company to get off their workers’ compensation policy

    This is the summary of the bill’s impact on the State’s WC system according to the analysts https://www.flsenate.gov/Session/Bill/2021/1305/Analyses/h1305.IBS.PDF

    What is especially remarkable to me is that there has been little analysis done on the economic and market impact these decisions will have on the constituents of Florida in terms of availability, conditions and price.

    I hope the Florida JUA is ready for the waterfall of construction-related accounts it will be asked to take over in light of this huge reduction of workers’ compensation capacity for construction in Florida. As our State’s property market becomes the market of first resort, one has to wonder if the workers’ compensation residual market will be the next to overpopulate.

    FL PEO Community Braces for House Bill 1305

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    Late on Friday, it was announced that House Bill 1305 https://flsenate.gov/Session/Bill/2021/1305 …was added to the Florida Insurance & Banking Subcommittee agenda this coming Tuesday morning (3/23) at 9:30 am. If the bill stays in its current format, highlights are:

    • This bill https://flsenate.gov/Session/Bill/2021/1305/BillText/Filed/PDF, unlike SB 820, is focused only on the construction industry
    • If passed, the PEO is on the hook for workers’ compensation for all employees of any subcontractor, whether reported or not – the PEO arrangement automatically covers the uninsured employees without the subcontractor having to pay a premium for the coverage
    • If passed, it allows those that are fraudulently doing business without insurance to have a safety net to bail them out
    • If passed, the workers’ compensation market for construction accounts will constrict rapidly, especially for General Contractors and those that rely heavily on sub-contracted work
    • If passed, WC coverage (coemployment) starts now at hiring level of the subcontractor and employee, versus when employee is reported to PEO
    • The language of this bill keeps bringing up the “hiring the person directly by the employee leasing company”, which tells me there is confusion that a PEO would normally hire employees for a client company – I believe there is confusion with the staffing industry
    • Section 3 (4) “During the term of an employee leasing arrangement with a subcontractor, if a subcontractor does not obtain workers’ compensation insurance for non-leased employees, a person is deemed an employee of the employee leasing company for purposes of workers’ compensation insurance” – read anyone on the job-site that cannot prove they have their own wc will fall back on GC and thus PEO
    • It is anticipated that further argument is going to be made on a minimum amount of days (prob 30) to give a client company to get off their wc

    This is the summary of the bill’s impact on the State’s WC system according to the analysts https://www.flsenate.gov/Session/Bill/2021/1305/Analyses/h1305.IBS.PDF

    My commentary is that there is no “gap in coverage” for workers’ compensation. You pay and you are covered. It is a statutory line without limitations or exclusions.

    It is a shame that something so simple is now being confused. If, like in 39 other States/DC we saw this as a global problem of uninsured workers which was neutralized with an Uninsured Employer Fund. The claimant is taken care of foremost and then the State goes after the proper offender who did not purchase wc.

    As we understand further plans of action we will update accordingly.

    Report on PEO in Florida is Submitted

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    The report this report issued by The Office of Program Policy Analysis and Government Accountability (“OPPAGA”) in Florida, is clearly one commenced with negative overtones and questionable timing. As Senate Bill 820 looms in the background, this appears to be the “made for order” white paper to justify it. It is unfortunate that the issue of uninsured employers has been misconstrued with some sort of “gap in coverage” in workers’ compensation if a Professional Employer Organization is utilized. This is just not the case. A gap in coverage exists when a business does not buy insurance for its employees and that should be the focus of fixing the root issue of the uninsured employee.

    The scope of the report is:

    1. “What is the relationship between PEO’s and insurance carriers, and how might workers’ compensation coverage differ for businesses that use PEO’s?”
    2. “How can the relationship between a PEO and its client companies lead to a workers’ compensation coverage gap?”
    3. “What has been the history of PEO-related workers’ compensation insurance carrier insolvencies in Florida?”
    4. “Can PEO’s offering workers’ compensation coverage have an effect on the workers’ compensation insurance market, including premiums for other businesses?”
    5. How have other states addressed PEO regulation and PEO-related workers’ compensation insurance coverage gaps?”
    6. What options could the legislature consider to address PEO regulation and PEO-related workers’ compensation insurance coverage gaps?”

    According to the Director of the Florida Association of Professional Employer Organizations Robert Skrob:

    “Since the creation of the workers’ compensation system, employers fraudulently paying employees cash under the table has been a problem. That why the law  holds general contractors responsible for what happens on their job sites.  Shifting that responsibility away from general contractors would lead to more workers’ compensation fraud by letting general contractors who don’t adequately oversee their worksites avoid responsibility.

    Contractors who cheat the system by not providing workers’ compensation coverage for all people who work for them put those workers in danger. The Florida Legislature should eliminate the financial motivation and incentives built into the system that encourage workers compensation fraud in construction by increasing the number of jobsite investigations to keep up with the growth in the construction industry, and by holding the cheaters responsible.

    There are a number of proposed bills which would implement some of the recommendations within this report. Together with NAPEO we will fight the proposals contained within this report.”

    We could not agree more and look forward to helping any way possible to address the issue of the occupational uninsured. Not buying insurance for your employees is a crime.

    From an insurance perspective, the real issue – taking care of the claimant, is addressed in most states through the administration of an “Office of Uninsured Employers”. If your employer did not buy workers’ compensation, you go to the State, the claimant’s benefits are funded, the employer is investigated/penalized and the fund is replenished. In Florida, if you are hurt and your employer has not purchased insurance, your primary recourse is to contact a personal injury attorney. “It’s free”, until their contingengies are triggered on what is already rightfully due tohe claimant. This is how it works in Florida in regard to uninsured employees of uninsured employers regardless of a PEO being involved or not.

    We will be reviewing the OPPAGA report in detail and provide additional insight on it before the weekend.

    How Can There Be a Gap in Coverage?

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    …if coverage does not exist in the first place!

    We have argued appropriately that coverage cannot exist based on a lack of insurable interest of the non co-employed employee. Not co-employment, not who was or was not payrolled, someone in the system knowingly committed fraud or else coverage would exist. This is not a “gap”, it is “black and white” in terms of coverage being purchased/provided or not.  The beauty of the workers’ compensation system is “The Great Tradeoff” – if you as the employer buy workers’ compensation (wc), you are protected from suit. Said simply, pay the wc insurance premiums and the employee base will be taken care of to the letter of the law.  In all States and DC (except TX, OK and NJ have opt out provisions), workers’ compensation is a mandatory purchase at certain employee counts (4 + typically).  There is no excuse to be ignorant of the need for workers’ compensation nor to pay the premiums necessary to ensure the proper medical and lost time payments due to an injured worker.  In all States, penalties and misdemeanors/ felonies follow with the lack of purchase of wc. 

    In NO state is an industry group targeted as a proposed safety net to those that have failed to purchase insurance and committed fraud.  Instead, the fraudsters have a safety net to take the heat off them for not purchasing wc and doing the right thing in the first place. Since all states manage workers’ compensation differently with their own unique rules and rate sets, it falls upon each State to manage the occupational accident and illness exposure of its citizens.

    Every state has some form of “subsequent” or “second injury” fund to make sure the cost of employers to hire prior workers’ comp claimants is offset and affordable.  This form of labor umbrella allows for employees to find gainful employment without putting their employers at increased financial risk based on prior events/claims.

    Thirty-nine states/district out of 51 have what is generally known as an “Uninsured Employer Fund” (UEF).  In these states, it is all about making sure the injured worker(s) get treatment and benefits first, with the responsibility of the lack of insurance investigated at the same time with the appropriate parties.  The employer(s) whom were responsible for not buying insurance are held accountable, and most importantly, the claimant gets the benefits they deserve without delay and hopefully litigation.

    The following 12 States do not have a UEF in order of population:

    • Texas (opt outs allowed)
    • Florida
    • Georgia
    • North Carolina
    • Indiana
    • Alabama
    • Louisiana
    • Iowa
    • Mississippi
    • Arkansas
    • Nebraska
    • Vermont

    In these states, for the innocent claimants that have unscrupulous employers that do not wish to purchase workers’ compensation, there is little recourse outside of litigation.  

    Not buying wc is fraud. Go after the perpetrators of the frauds and allow for a safety net for those that should matter the most – those the system is built to serve – the claimants.  An uninsured employer fund makes certain the Florida worker is covered, with the bill to be determined post-investigation.

    It should be noted that either the Department of Labor or Department of Insurance of most UEF states are the governing authority and therefore something new would not need to be created.  A few states DCBS’ also handle.

    Sunz Holdings Advocates for Employee Rights and Business Protection

    Great article from our friends at Sunz regarding their efforts to protect small businesses and worksite employees. Bravo!

    Bradenton, FL, April 12, 2021 (GLOBE NEWSWIRE) — SUNZ Holdings has long served as the bridge connecting employees, businesses, and lawmakers. As a national insurance provider, the company is in the unique position of being able to effectively translate the needs of businesses while also highlighting the potential voids in employee protection. This ability to see all sides and understand how various lawmakers across the country draft legislation has become an important part of protecting employees under the Professional Employer Organization (PEO) model.

    Providing perspective is essential to the ongoing relationship between government entities and the business community. Naturally, the two want to work together to form a symbiotic relationship, which ultimately leads to a stable workforce and robust economy. However, sometimes it can be difficult for the two sides to communicate effectively, often leaving workers in the crossfire. The role of SUNZ is to create an ongoing conversation that values the views of both parties and seeks to achieve a shared understanding. Through advocacy, education, and transparency, SUNZ creates that conversation in state capitals and board rooms across the country.

    To foster an open dialogue with lawmakers, SUNZ will meet one-on-one or in small committee groups with representatives. These meetings serve as working thought leader sessions where representatives can dive into important constituent issues specific to employment and workers’ compensation. Intimately understanding these issues, SUNZ provides lawmakers with a clear picture of how each decision will ultimately affect workers and businesses.

    Take, for example, HB 1305 introduced in the Florida House of Representatives in March of 2021. On its own, the bill does little to protect employees or ensure they are provided safe working conditions. That is a significant problem considering that according to the Bureau of Labor Statistics, 2.8 million nonfatal injuries occurred in the private sector in 2019 alone (2020 statistics are not available). One step further, according to the BLS, one worker died every 99 minutes in that same year. With such high numbers of workplace injuries, it is no surprise that American companies spend roughly $1 billion in workers’ compensation per week.

    Putting increased burden on PEO organizations, the bill was missing a crucial point of view. Working closely with lawmakers, the SUNZ team illustrated how “The Gap” left vulnerable employees uninsured. Since the early days of workmen’s compensation, “The Gap” has allowed contractors to underreport their employee roster to cut costs. By underreporting, contractors alleviate themselves of the responsibility and expense of insurance while employees are left in coverage limbo.

    In the above case of HB 1305, SUNZ serves a crucial role as voice and translator. Through its working relationship with legislators, SUNZ has carefully illustrated the reality of “The Gap.” If passed, this legislation would make it virtually impossible for PEOs to work with small construction companies, but it would not put a stop to the real problem, which is fraud. As a third party, the SUNZ team can provide a bird’s eye view of the situation and effectively advocate for the employees who suffer when fraud occurs.

    HB 1305 is only one of many national legislative priorities that the SUNZ team monitors on a daily basis. Clients of the organization come to SUNZ looking to streamline their employee insurance coverage while also providing the highest level of protection for their workforce. This need takes many different forms depending on the industry and is heavily influenced by state and federal legislation.

    Legislation can have profound and extended consequences for companies and their employees. While lawmakers often have the best intentions, it is vital that advocates provide a picture of how a decision will affect those downstream of it. SUNZ has and will continue to serve as that advocate, giving voice to the concerns of its clients and everyday employees nationwide. This mission is not about deal-making or lobbying; it is about providing companies and workers with the confidence that they and their families are protected in a risky world.

    SUNZ Holdings, LLC is the parent company of SUNZ Insurance, a national workers’ compensation insurance company headquartered in Bradenton, Florida. SUNZ Insurance develops unique workers’ compensation programs that deliver innovative and tailored solutions to protect businesses and their employees. SUNZ understands its clients’ needs for fluidity, offering workers’ compensation insurance options that do not begin and end with the printed policy. SUNZ believes that a safe work environment and a healthy workforce are the foundation for a successful business. There are several affiliate companies within the SUNZ Holdings enterprise that provide related and ancillary services to the workers’ compensation insurance industry. These companies include Next Level Administrators, WatchPoint, Avalon Subrogation Partners, and Ascential Care Partners. For more information, visit www.sunzinsurance.com.

    CONTACT: Rick Leonard SUNZ Insurance 9413063077 rleonard@sunzinsurance.com Matt Solomon HCP Associates 8133180565 msolomon@hcpassociates.com

    https://finance.yahoo.com/news/sunz-holdings-advocates-employee-rights-184100488.html

    Challenges or opportunities for brokers placing cyber risk

    Content used to write this post was originally written by NU Property Casualty 360’s Managing Editor, Ms. Heather A. Turner

    According to a Guidewire report the numbers for cybercrime in 2020, have almost doubled! In addition to an increase in attacks and breaches are the related budgetary allocations being made by small to mid-sized businesses for cyber insurance over the next 2 years. Ramping up cyber sturdy tools and in an effort to prevent cyber attacks are a necessary play in prevention for the ever evolving cyber market and being fought across the property and casualty landscape.


    According to a report published by CyberCube, a data-driven cyber analytics company for the insurance industry, the growing cyber market is creating unique opportunities for brokers to set themselves apart from their competitors. By marrying their existing areas of expertise with their new found and or improved fundamental comprehension of insurable cyber risk and exposure, brokers can show and or remind buyers and prospects alike why they are indispensable.

    The following list was created by CyberCube to further explore examples of challenges and opportunities brokers face in the cyber market today.

    Click here to read the detail following Opportunities 1-4 written by Heather A. Turner, of NU Property Casualty 360. You must register for free account.

    • Opportunity No. 1: Brokers are trusted advisors
    • Opportunity No. 2: Brokers can add value by mapping exposure to coverages and policy terms.
    • Opportunity No. 3: Getting a “yes” from insurers.
    • Opportunity No.4: Standalone cyber is just one aspect of a well rounded insurance program.

    Finding Subs Who Really Work

    The recent activities surrounding the Florida House Bill 1305 has forced a lot of attention and thought regarding subcontractors. We continue to monitor the progression of this bill, however one powerful takeaway from this conversation can already be appreciated: the importance of hiring and working with good subcontractors. But what makes a subcontractor “good”?

    A good subcontractor is willing to work within reasonable parameters which should always be set out in a written agreement. A sound Subcontractor Agreement should outline important items such as:

    • The Subcontractor’s responsibilities,
    • Terms and conditions of the work to be undertaken,
    • Safety requirements,
    • Indemnity stipulations,
    • Insurance requirements, and
    • Any additional provisions related specifically to the job.

    Here is a sample Subcontractor Agreement which speaks to recommended details for each of the above provisions. 

    Any company using Subcontractors should have a Subcontractor Management Plan (SMP) in place and should require all subs to adhere to the stipulations outlined in the plan.  A SMP provides guidance for subcontract management activities, including the following:

    • Prequalification and bidding process
    • Insurance considerations
    • Beginning work
    • Work site’s written safety plan
    • Safety training and recordkeeping policies
    • Safety inspections
    • Work-in-progress and post-project reviews

    We have included a downloadable copy of our SMP as an example, which includes a detailed and useful safety inspection checklist, among many other important guidelines.

    Well documented and verifiable proof of insurance is of upmost importance when dealing with a sub.  Subcontractors should maintain Commercial General Liability, Auto Liability, Umbrella or Excess Liability and Workers’ Compensation.  Of these coverages, Florida House Bill 1305 specifically focus on Workers’ Compensation.  The subcontractor should secure a workers’ compensation insurance policy. The workers’ compensation policy must cover all of the subcontractor’s work and performance and provide coverage for all employees, executive officers, sole proprietors, and partners and members of a limited liability company, in the amounts required by all applicable laws.  In addition, the subcontractor should secure an employers’ liability insurance policy (part II of the standard workers’ compensation policy). This type of coverage covers the damages that become due in case of bodily injury, occupational sickness or disease or death of subcontractor employees that are not covered by the workers’ compensation policy.

    The attached Subcontractor Certificate of Insurance Letter is a great, single page Word document which can be used to concisely outline your insurance requirements to a sub.  The document is in Word and can be amended as needed to suit you or your clients’ needs. Work with a sub should never be initiated until the items requested in this letter are received and verified.

    We hope you find these documents helpful!  Work smart and stay safe everyone! 

    Engage PEO Recognized by Inc. Magazine as one of Florida’s Fastest Growing Companies

    Congratulations to our friends at Engage for another well-deserved accolade. If you see Mr. Starkman today, wish him a Happy Birthday and congratulations!

    Fort Lauderdale, FL, USA – March 30, 2021 – Engage PEO, a professional employer organization providing HR outsourcing solutions to small and mid-sized businesses across the U.S., announced today that the company has been named one of the fastest-growing Florida-based private companies on the 2021 Inc. 5000 Regional Florida Series.A segment of the prestigious Inc. 5000 franchise, the second-annual regional list represents a unique look at the most successful companies within the Florida economy’s most dynamic segment-its independent small businesses. Engage also was named to Inc. Magazine’s ranking of fastest growing companies in the nation for the fifth consecutive year in 2020, earning a spot on the coveted Inc. 5000 “Honor Roll.””Earning a spot on an Inc. 5000 list continues to be quite the honor, be it on a national scale, or within our home state of Florida,” said Jay Starkman, CEO of Engage PEO. “In large part, our continued growth is due to Engage’s incredible team and our unique HR service delivery model through licensed attorneys. The caliber of our expertise has never been of more value to our clients and referral partners than it is today. We are grateful for this recognition and remain focused on helping our clients recover and rebound strongly in 2021.”

    The companies on this list show striking rates of growth across all industries in Florida. Between 2017 and 2019, these 250 private companies had an average growth rate of 202 percent and, in 2019 alone, they employed more than 83,000 people and added nearly $11 billion to the Florida economy. Companies based in major metro areas-Miami, Fort Lauderdale, Jacksonville, Tampa, and Orlando-brought in the highest revenue overall.Complete results of the Inc. 5000 Regionals, can be found here.

    Read more: http://www.digitaljournal.com/pr/5022599#ixzz6rSc4m4u5

    Interesting Tidbits for Your Week!

    Expecting the Unexpected for Your Small Business. Common insurance types for small businesses.

    For better or worse is generally a term related to marriage vows, but in business its just as important! Luckily for business owners there are ways to mitigate the risks associated with the “worse.” Pie Insurance recently released an article covering the types of common insurance for small businesses as well as some not so common options like a business owner’s policy (BOP); I thought it was worth sharing.

    A Business Owner’s policy can include professional liability insurance (errors and omissions insurance), a commercial umbrella policy, employment practices liability insurance, directors and offices liability insurance and terrorism insurance. You can check out the full article here. The key to insurance is never needing it, but having it in place when you do. It can make the difference in saving your company when the unexpected happens. Contact us at Libertate Insurance, we can help.

    1st Qtr 2021 Small Business Data

    NAPEO issued small business snapshot data on Q1 of 2021. Check out the full review here.

    High points from the data include:

    Percentage change of Daily Small Business Revenue from January 2020 to January 2021 showing 50% decrease in revenues at April 1, 2020 with slowing increase about 31% overall increase at January 1, 2021. Small businesses are slowly pulling back.

    Job losses in the United States are reported at 9.6 million; with the expected hardest hit industry of Leisure and Hospitality accounting for nearly 40% of all loss reported.

    On a state by state analysis the numbers are showing more increase than decrease with the average unemployment rate reporting at 5.6% at the close of February 2021. (US Bureau of Labor Statistics). Overall jobless rates are down in 23 states as of March and higher in only 4.

    US Small Business Administration (SBA) Updates

    If your business previously received the Economic Injury Disaster Loan (EIDL) Advance from the SBA for less than $10,000, the SBA is allowing applicants to re-apply to receive the full amount of the advance up to $10,000.

    If your business was also a recipient of the EIDL these loans were previously limited to six months of economic injury up to a maximum of $150,000; the SBA has announced a change that will allow loan limits up to 24 months of economic injury with a maximum loan amount of $500,000. Be advised and proceed with caution, as the SBA takes security interest in the business assets for loan amounts over $25,000.

    The SBA is also sending out emails to the EIDL loan recipients extending the first payment due on the EIDL loans to 2022 for loans issued in 2020. The first payment due date is extended 24 months from the date on the note. They have indicated that 2021 loans will have initial payments due 18 months from the note date. Interest continues to accrue during the deferment period.

    Follow these instructions if you wish to request a loan increase:

    • Send email to CovidEIDLIncreaseRequests@sba.gov
    • Use subject line “EIDL Increase Request for [insert your 10-digit application number]”
    • Be sure to include in the body of your email identifying information for your current loan including application number, loan number, business name, business address, business owner name(s), and phone number.

    Important: Do not include any financial documents or tax records with your initial request. You will receive a follow up email notification if we need additional documents.

    You can check out all of the updates for offerings available from the SBA here.

    History of Workers’ Compensation

    AND last but not least, for those insurance nerds, another very interesting release from Pie Insurance is a history of workers’ compensation insurance. Covering where the laws stand today, where it started and how it has changed the benefits to workers in the United States. Interesting and educational read, check it out here.

    Be sure to check out our continual updates here, on PEO Compass, regarding Florida’s House Bill 1305 and its impact on workers’ compensation and the PEO industry.