Legislative Activity Update – FL Senate Bill 292

The state of Florida has passed Senate Bill 292.  This bill is responsible for defining the terms “loss run statement” and “provide”; requiring surplus lines and authorized insurers, respectively, to provide insureds either a loss run statement or certain information within a certain time frame after receipt of the insured’s written request.  This also requires insurers to provide notice to the agent of record after providing a loss run statement and prohibits insurers from charging a fee to prepare and provide one loss run statement annually.

Effective Date: 1/1/2021
Last Action: 6/22/2020 – Chapter No. 2020-51
Bill Text: Web Page | PDF

See the source image

Florida – Effective January 1, 2021, FL law changes for providing Loss Runs to the insured as well as notification to the Agent of Record.

  • An insurer shall provide loss runs to an insured within 15 calendar days after receipt of the insured’s written request.
  • Loss runs provided must contain the claims history with the insurer for the preceding 5 years or if history is less than 5 years then all years must be provided to the insured.
  • They can be electronically provided, allowing access through a secure website login or generate documents and mail.
  • The insurer must notify the Agent of Record that loss runs were provided to the insured at the time they are provided.
  • An insurer is not required to provide loss reserve information.

 

Workers’ Comp Premiums Could Skyrocket With COVID-19 Claims

Source: Bloomberg Environment

  • Health-care workers likely eligible for workers’ comp
  • Grocery, delivery workers will argue for eligibility

Health-care workers and emergency responders will benefit from rules eased in some states around workers’ compensation that will allow them to collect benefits if they can prove they caught Covid-19 on the job. Some say essential workers like grocery store employees and delivery workers also should qualify.

But employers need to be aware of the changing rules, and be prepared for the likely end result—skyrocketing premiums.

State workers’ compensation boards around the country are amending rules for benefits payouts to include health-care workers exposed to the virus and then quarantined.

Attorneys are keeping a close eye on the questions, such as who should be eligible to receive benefits, how does a worker prove they caught Covid-19 on the job, and how will an influx of successful claims affect businesses’ premiums to insurance carriers.

“If everybody who gets sick on the job is able to file a compensation claim and everyone is successful, it may bankrupt a company,” said Michael Duff, a workers’ compensation professor at the University of Wyoming.

Quarantined Workers

Workers’ compensation is a state-mandated insurance program that provides pay to workers who are injured on the job—in return, the worker agrees not to sue their employer. Like unemployment insurance, workers’ compensation rules vary by state.

In early March, Washington’s Department of Labor & Industries announced that it “will provide benefits to these workers during the time they’re quarantined after being exposed to COVID-19 on the job.”

And on March 13, Kentucky Gov. Andy Beshear’s office announced that Kentucky Employers’ Mutual Insurance will “expand coverage benefits to include the quarantine period for first responders and medical personnel,” a news release stated.

Still, many states haven’t changed their policies, and experts say proving causation can be tough for workers.

Proving Exposure at Work

Earlier this month, the Occupational Safety and Health Administration declared that coronavirus was a recordable injury—meaning an employer would have to notify the federal safety agency when a worker caught the disease at work—and issued guidance to that effect.

Safety attorneys said the guidance left confusion about how to prove whether a worker actually contracted the virus on the job, said Joshua Henderson, partner at Norton Rose Fulbright US LLP in California.

“At the moment, the question of causation is where there is a lot of uncertainty,” Henderson said. “Whether it was caused by a condition at work.”

Some lawyers and activists think grocery store workers and delivery drivers are eligible for workers’ comp benefits, since their employers deem them essential workers and they could be at higher risk of COVID-19 exposure based on their persistent contact with the public as the pandemic rages across the country.

Duff argues that there are scenarios where a worker could establish causation is by citing one’s essential employee status.

“If you’re required to come in and deemed essential employees, because you are by definition required to come into work during a pandemic, then I think the argument would be, ‘My risk of contracting this disease is by definition higher than the general public.’ What you’re basically saying is, ‘My workplace increases the risk of me contracting the disease’,” Duff said.

He said he believes many workers will qualify for claims, causing employer premiums to rise, and the pandemic exposes fissures in workers’ compensation rules and labor law as a whole.

“If I was in management, I’d figure out a strategy that is fair but won’t hasten my demise or subject me to extraordinary financial pressure,” Duff said. “I would be thinking about how I would responsibly contest claims in a way that doesn’t make me look like an ogre.”

Jeff Eddinger, regulatory business management specialist at the National Council on Compensation Insurance, told Bloomberg Law that no national data is available that can outline the impact of COVID-19 on premiums. Assuming there’s an influx of workers’ compensation claims from the health-care sector, “that would certainly cause some upward pressure on claim costs in the system, but then I would say on the other side of that, during this time where people are telecommuting and some industries shut down, that creates downward pressure because people aren’t working. Those two things could offset each other.”

Duff said employers should develop practices and policies that can reasonably contest claims, but “don’t unreasonably respond to workers because my customers aren’t going to feel good about it.”

Grocery, Delivery, and Essential Workers

Edward W. Guldi, a New York plaintiff’s workers’ comp attorney at The Perecman Firm, P.L.L.C., also said it’s not likely grocery or delivery drivers would be successful in worker’s comp claims.

“Nurses are going to get their claims, the hospital workers, too,” Guldi said. “The people who aren’t are grocery store workers, waiters, office workers and delivery drivers and basically everybody else who doesn’t qualify.”

He compared their position to the Sept. 11 firefighters and first responders in New York who initially were denied workers’ compensation. Later, the state legislature passed Article 8-A, which addressed the complications caused by the two-year statutory filing deadline, allowing those injured or sickened in rescue, recovery, and cleanup efforts access to compensation.

The New York Committee for Occupational Safety and Health—an organization of unions, worker centers, and activists—already has begun lobbying for sick workers to receive workers’ compensation in New York. A representative from the organization wasn’t available for comment.

John Ruser, president and CEO of the independent, nonprofit Workers Compensation Research Institute, said one way to ensure nonhealth-care workers are covered by workers’ compensation is through state legislation.

“In some cases, legislators passed a law that said certain conditions are presumed to be work-related, therefore all claims that come from a class of workers related to COVID-19 would be compensable. Legislators can pass that,” he said.

Guldi said maybe the New York State Assembly “will do the right thing for those who have this illness. I know when George Pataki was governor, it took unions and police unions and 9/11 widows and lobbying to make that happen.”

To contact the reporter on this story: Fatima Hussein in Washington at fhussein@bloombergenvironment.com

To contact the editors responsible for this story: Cheryl Saenz at csaenz@bloombergtax.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

California’s gig worker law is forcing small businesses to rethink staffing

Source: CBSNews.com

A California law that makes it harder for companies to treat workers as independent contractors takes effect on January 1. Ahead of that date, small businesses in and outside the state are rethinking their staffing.

The law puts tough restrictions on who can be independent contractors or freelancers rather than employees. Supporters say it addresses inequities created by the growth of the gig economy, including the employment practices of ride-sharing companies like Uber and Lyft that use contractors. Company owners with independent contractors must now decide whether to hire them as employees or look for help in other states. Another alternative: Asking these workers to start their own businesses, a setup the law allows.

Although the law affects companies of all sizes and out-of-state businesses that use California contractors, it likely will have a greater impact on the many small businesses that have hired independent contractors because of limited staffing budgets.

Tamara Ellison has used independent contractors in both her consulting and construction businesses. She’s expecting to hire five of her consulting contractors as employees to bring her company into compliance with the law. But she’s also thinking she may have to limit the services she offers because not all her hires will have all the skills she needs for all her clients. She may also have to raise her prices, a worrisome proposition.

“Little companies just trying to start out won’t be able to afford our services,” said Ellison, whose Ontario, California-based company bears her name.

Ellison won’t need to hire her construction contractors; they’re subcontractors, a classification that complies with the new law.

The law approved by the California legislature in September codifies a 2018 ruling by the state’s Supreme Court that said workers misclassified as independent contractors lose rights and protections including a minimum wage, workers’ compensation, and unemployment compensation. The ruling came in a lawsuit brought against the delivery company Dynamex; workers around the country have complained that services like Uber and Lyft have misclassified them as well.

The law is being challenged in state courts, and companies including Uber and Lyft are campaigning for a referendum on the 2020 election ballot on whether they should be exempt from the law. And employment law attorneys expect the state legislature to add to the list of professions the law already excludes.

Independent contractors and freelancers have long been a sore point for federal and state officials who contend that many of these workers are doing work that employees do. When employers classify workers as independent contractors, they avoid taxes including the 6.2% of salary and wages companies must pay for Social Security and the 1.45% they must pay for Medicare. Employers must also pay for workers’ compensation and unemployment and disability insurance and often their health insurance and retirement benefits.

For many small business owners, especially those who do a variety of projects requiring different types of expertise, contractors provide more flexibility. WebConsults, a digital marketing agency with offices in California and Tennessee, bases its hiring decision on the work it has and whether projects are long term or short term.

“We may need a developer who specializes in a specific language to help us build one website,” managing partner John McGhee said. “If we don’t anticipate having to use that language again in the near future, we’ll hire a contractor to build the website.”

The layoffs companies were forced to make during and after the Great Recession encouraged many small business owners to choose independent contractors over employees. Contractors often cost less — they don’t get health insurance, 401(k) contributions and other benefits — and owners don’t have to let people go and pay severance when business slows.

The new law allows workers to be classified as independent contractors only if companies don’t have the right to control their work and how it is done. A number of factors go into making that determination, including how closely the worker is supervised — for example, who sets their hours. The work being done must not be part of the company’s regular business, and the worker’s occupation must be distinct from the company’s; in other words, a graphic designer cannot be an independent contractor for a graphic design firm.

There are exemptions for professionals like doctors, lawyers, architects, and insurance brokers, but they must have the freedom to set their own hours, negotiate their own fees and exercise their own judgment as they do their jobs. Workers like graphic artists, freelance writers, and travel agents can also be exempt if they have similar autonomy. And people who work in barbershops, hair and nail salons and spas can have exemptions, but they have to set their own rates and hours, choose their own clients and be paid directly by the clients.

man standing beside man sitting on barber chair

Marisa Vallbona has transitioned a contractor who has worked for her in California into an employee and is being more selective about the work she takes on in the state. Vallbona, who recently moved the headquarters of her public relations firm, CIM, to Houston from California, is now using only Texas-based contractors.

“I don’t work with freelancers in California anymore because of the gig economy problems,” she said.

Other companies inside and out of California may follow suit. The increase in remote working over the past two decades has made it easier for companies to find workers anywhere.

Companies that don’t comply with the law face the possibility of penalties running into the tens or hundreds of thousands of dollars, said Nannina Angioni, an employment law attorney with Kaedian LLP in Los Angeles. She’s warning clients that the law expands the ability of local officials, and not just state tax officials, to enforce the law starting July 1. Moreover, she says the law can lead to lawsuits brought by workers.

Some owners may believe it’s OK to use independent contractors or freelancers because some workers like being part of the gig economy, said Michael Boro, a consultant with PwC whose expertise is in workplace issues.

“These people don’t want to be employees” is the position owners may take, Boro said. But, he warned, they need to follow the law, not workers’ wishes.

 https://www.cbsnews.com/news/californias-gig-economy-law-is-forcing-small-businesses-to-rethink-staffing/

 

New Jersey Governor Signs PEO Bill into Law

PEO NEW JERSEY

PEO New Jersey news and information.

From NAPEO: Governor Chris Christie (R) signed Senate Bill 2512 into law 9/13/2017. The new law allows a client or PEO to provide workers’ compensation coverage for worksite employees. Previously, New Jersey law only permitted the PEO to provide such coverage for worksite employees. A client company that assumes the responsibility of providing workers compensation coverage to worksite employees will be required to provide a copy of the client service agreement to its insurance carrier prior to the issuance of the policy or upon partnering with a PEO. In the event that a client company’s policy is canceled pursuant to New Jersey law, the insurance carrier is required to provide the PEO with copies of all notices required to be issued to the client company by regular mail.

In addition, the law modernizes the state’s PEO statute by:

  • Allowing the PEO and client company the flexibility to allocate responsibility for the direction and control over management of safety, risk and hazard control at the client worksite; and
  • Requiring the client to accurately report wages to the PEO.

In recent months, both chambers passed the bill by unanimous vote. NAPEO worked to enhance the legislation throughout the legislative process and testified in support of the bill. The new law goes into effect immediately, though insurance carriers will have up to 180 days following enactment of SB2512 to comply with the new notice provisions. For more information, please contact Daniel Harris.

Source: The National Association of Professional Employer Organizations