Here is clip 1 of a few that outlines our argument against House Bill 1305.
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) email@example.com
Representative Joe Geller (Dania Beach) firstname.lastname@example.org
Representative Chris Latvala (Clearwater) Chris.Latvala@myfloridahouse.gov
Representative Randy Maggard (Zephyrhills) email@example.com
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) firstname.lastname@example.org
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!
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 email@example.com Matt Solomon HCP Associates 8133180565 firstname.lastname@example.org
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!
Here’s a recap of the recent activity regarding House Bill 1305:
- On Tuesday, March 23, 2021, the Insurance & Banking Subcommittee heard HB 1305.
- Click here to access the video (coverage begins around 1:20s)
- Please send a THANK YOU to those committee members that supported PEO
- 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
- Representatives Include:
- Representative Cyndi Stevenson, Chair (Saint Augustine) email@example.com
- Representative Randy Maggard, Vice Chair (Zephyrhills) firstname.lastname@example.org
- Representative Joy Goff-Marcil, Minority Ranking Member (Maitland) Joy.Goff-Marcil@myfloridahouse.gov
- Representative David Borrero (Miami) David.Borrero@myfloridahouse.gov
- Representative Wyman Duggan (Jacksonville) Wyman.Duggan@myfloridahouse.gov
- Representative Jason Fischer (Jacksonville) Jason.Fischer@myfloridahouse.gov
- Representative Yvonne Hayes Hinson (Gainesville) Yvonne.Hinson@myfloridahouse.gov
- Representative Christine Hunschofsky (Coconut Creek) Christine.Hunschofsky@myfloridahouse.gov
- Representative Sam Killebrew (Winter Haven) Sam.Killebrew@myfloridahouse.gov
- Representative Traci Koster (Safety Harbor) Traci.Koster@myfloridahouse.gov
- Representative Tobin Rogers ‘Toby’ Overdorf (Stuart) Toby.Overdorf@myfloridahouse.gov
- Representative Felicia Simone Robinson (Miami Gardens) Felicia.Robinson@myfloridahouse.gov
- Representative Jackie Toledo (Tampa) Jackie.Toledo@myfloridahouse.gov
- Representative Marie Paule Woodson (Pembroke Pines) Marie.Woodson@myfloridahouse.gov
- Key Talking Points:
- 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 job site 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.
- Representatives Include:
More to come…
Have a great weekend!