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.