Florida PEO Community Braces for House Bill 1305
New Workers' Compensation for all Employees of Any Subcontractor Bill
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.
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