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