Bill Text: FL H0933 | 2011 | Regular Session | Introduced

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Bill Title: Employee Leasing Companies

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2011-05-07 - Indefinitely postponed and withdrawn from consideration [H0933 Detail]

Download: Florida-2011-H0933-Introduced.html

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HB 933

1	A bill to be entitled
2	An act relating to employee leasing companies; amending s.
3	468.525, F.S.; requiring an employee licensing company to
4	carry workers' compensation insurance coverage and provide
5	notice to a client company within a specified period after
6	an employee leasing arrangement is terminated; requiring a
7	client company to provide an employee leasing company with
8	certain written information regarding certain contractual
9	relationships; requiring a client company to notify an
10	employee leasing company of certain agreements within a
11	specified period; requiring a client company to provide
12	certain information about certain employees; amending s.
13	468.529, F.S.; requiring an employee leasing company to
14	secure workers' compensation coverage before obtaining or
15	renewing a license; providing circumstances requiring a
16	person to become an employee of a leasing company;
17	requiring a client company to report within a specified
18	period the hiring of specified employees and carry
19	workers' compensation insurance for such employees;
20	providing that a client company is liable for payment of
21	certain expenses incurred by an employee leasing company
22	for failure to report certain information within a
23	specified period of time; requiring the employee leasing
24	company to notify each leased employee or specified client
25	company by mail of the termination of an employee leasing
26	agreement; requiring certain information be included in
27	the notice; specifying a period after which a specified
28	leased employee is no longer covered by workers'
29	compensation insurance; requiring issuance of a multiple
30	coordinated policy to an employee leasing company when
31	obtaining workers' compensation coverage; requiring a
32	client company to apply its experience rating modification
33	factor to workers' compensation charges made by the
34	employee leasing company under a specified condition;
35	requiring a client company that meets a specified
36	condition to have its own experience rating modification
37	factor used by a workers' compensation insurance carrier;
38	requiring an employee leasing company meeting a specified
39	condition to provide the client company with certain
40	records regarding workers' compensation insurance within a
41	specified period; specifying that certain immunity
42	provisions apply only under a specified condition;
43	amending s. 627.192, F.S.; deleting provisions allowing a
44	lessor to make certain decisions regarding workers'
45	compensation coverage; requiring a lessor applying for or
46	covered by a workers' compensation insurance policy to
47	provide certain information to the insurer; revising the
48	time period to notify certain individuals covered under a
49	workers' compensation policy of the cancellation of such
50	policy; providing an effective date.
51
52	Be It Enacted by the Legislature of the State of Florida:
53
54	Section 1.  Paragraph (f) of subsection (4) of section
55	468.525, Florida Statutes, is amended, paragraph (h) is added to
56	subsection (3), and paragraphs (g) through (j) are added to
57	subsection (4) of that section, to read:
58	468.525  License requirements.-
59	(3)  Each employee leasing company licensed by the
60	department shall have a registered agent for service of process
61	in this state and at least one licensed controlling person. In
62	addition, each licensed employee leasing company shall comply
63	with the following requirements:
64	(h)  Each employee leasing company must, regardless of the
65	number of leased employees, maintain at all times a workers'
66	compensation policy acceptable under the laws of this state
67	providing coverage for such employees.
68	(4)  The employee leasing company's contractual
69	arrangements with its client companies shall satisfy the
70	following conditions, whereby the leasing company:
71	(f)  Gives Has given written notice of the relationship
72	between the employee leasing company and the client company to
73	each leased employee it assigns to perform services at the
74	client's worksite.
75	(g)  Provides 30 days' notice to the client company before
76	termination of an employee leasing agreement.
77	(h)  Requires the client company to provide in writing to
78	the employee leasing company the names and addresses of all
79	parties with which it has a contractor relationship at the time
80	of entering into the employee leasing arrangement. The client
81	company must notify the employee leasing company within 48 hours
82	after entering into a subcontractor relationship with a third
83	party or immediately upon commencement of such contract work, if
84	earlier.
85	(i)  Secures the workers' compensation coverage for the
86	leased employees.
87	(j)  Requires the client company to provide to the employee
88	leasing company in writing the names of any direct, nonleased
89	employees employed by the client company at the time of entering
90	into the employee leasing arrangement.
91	Section 2.  Section 468.529, Florida Statutes, is amended
92	to read:
93	468.529  Licensee's insurance; employment tax; benefit
94	plans.-
95	(1)  A licensed employee leasing company is the employer of
96	the leased employees, except that this provision is not intended
97	to affect the determination of any issue arising under Pub. L.
98	No. 93-406, the Employee Retirement Income Security Act, as
99	amended from time to time. An employee leasing company is solely
100	shall be responsible for timely payment of unemployment taxes
101	pursuant to chapter 443, and is shall be responsible for
102	obtaining providing workers' compensation coverage pursuant to
103	this part and chapter 440. However, no licensed employee leasing
104	company shall sponsor a plan of self-insurance for health
105	benefits, except as may be permitted by the provisions of the
106	Florida Insurance Code or, if applicable, by Pub. L. No. 93-406,
107	the Employee Retirement Income Security Act, as amended from
108	time to time. For purposes of this section, a "plan of self-
109	insurance" shall exclude any arrangement where an admitted
110	insurance carrier has issued a policy of insurance primarily
111	responsible for the obligations of the health plan.
112	(2)  An initial or renewal license may not be issued to any
113	employee leasing company unless the employee leasing company
114	first files with the board evidence that it has secured of
115	workers' compensation coverage for all leased employees in this
116	state before such license may be issued. Each employee leasing
117	company shall maintain and make available to its workers'
118	compensation carrier the following information:
119	(a)  The correct name and federal identification number of
120	each client company.
121	(b)  A listing of all covered employees provided to each
122	client company, by classification code.
123	(c)  The total eligible wages by classification code and
124	the premiums due to the carrier for the employees provided to
125	each client company.
126	(3)  A licensed employee leasing company shall within 30
127	days after initiation or termination of an employee leasing
128	arrangement notify its workers' compensation insurance carrier,
129	the Division of Workers' Compensation of the Department of
130	Financial Services, and the state agency providing unemployment
131	tax collection services under contract with the Agency for
132	Workforce Innovation through an interagency agreement pursuant
133	to s. 443.1316 of both the initiation or the termination of the
134	company's relationship with any client company.
135	(4)  During the term of an employee leasing arrangement
136	with a client company, a person must become an employee of the
137	leasing company upon the earlier of the following:
138	(a)  The hiring of such person by the client company;
139	(b)  The commencement of work for the client company by
140	such person; or
141	(c)  The hiring of the person directly by the employee
142	leasing company.
143	(5)  A client company that hires direct, nonleased
144	employees must report such employees to the employee leasing
145	company within 48 hours after hiring. The client company must
146	have an active workers' compensation policy covering such
147	direct, nonleased employees. If an employee leasing company
148	becomes liable for the payment of workers' compensation benefits
149	to one of its employees hired by the client company, and the
150	client company has failed to report such hiring within 48 hours
151	after hiring, the employee leasing company's insurer, or the
152	employee leasing company if self-insured, is entitled to recover
153	from the client company three times the amount of premium and
154	administrative costs that would have been owed by the client
155	company if the employee had been reported.
156	(6)(a)  When an employee leasing arrangement is terminated,
157	the employee leasing company must send notice of the termination
158	by first-class United States mail to the last known address of
159	each leased employee who had been assigned to the terminated
160	client company. The notification must state the date that the
161	employee leasing arrangement was terminated. If the client
162	company is a contractor or involved in the construction
163	industry, the employee leasing company must send the notice to
164	all contractors with whom the client company has contracted.
165	(b)  A leased employee who remains employed by a terminated
166	client company is not covered by the workers' compensation
167	policy of the employee leasing company upon the 31st day after
168	the employee leasing company terminates its relationship with
169	the client company.
170	(7)  The responsibility to obtain workers' compensation
171	coverage for leased employees must be by way of a multiple
172	coordinated policy issued to the employee leasing company.
173	(8)  Any client company covered by an insurer, other than
174	an insurer for an employee leasing company, which enters into an
175	employee leasing arrangement must have the experience rating
176	modification factor it has developed applied to charges made by
177	the employee leasing company for workers' compensation coverage
178	and premium.
179	(9)  Any client company who terminates a leasing
180	arrangement or has such leasing arrangement terminated by the
181	employee leasing company must have its own experience rating
182	modification factor used by any carrier who provides coverage
183	for such client company.
184	(10)  Within 15 days after termination of an employee
185	leasing agreement, the employee leasing company must provide the
186	client company an opportunity to receive records regarding the
187	loss experience of the workers' compensation insurance during
188	the course of the employee leasing agreement.
189	(11)  Except as otherwise provided in s. 627.192(7) or
190	chapter 440, s. 440.11(2) applies to the employee leasing
191	company, the client company, and all other persons set forth in
192	s. 440.11(2) only if workers' compensation coverage is secured
193	for leased employees by the employee leasing company.
194	(12)(4)  An initial or renewal license may not be issued to
195	any employee leasing company unless the employee leasing company
196	first provides evidence to the board, as required by board rule,
197	that the employee leasing company has paid all of the employee
198	leasing company's obligations for payroll, payroll-related
199	taxes, workers' compensation insurance, and employee benefits.
200	All disputed amounts must be disclosed in the application.
201	(13)(5)  The provisions of this section are subject to
202	verification by department or board audit.
203	Section 3.  Section 627.192, Florida Statutes, is amended
204	to read:
205	627.192  Workers' compensation insurance; employee leasing
206	arrangements.-
207	(1)  The purpose of this section is to ensure that an
208	employer who leases some or all of its workers properly obtains
209	workers' compensation insurance coverage for all of its
210	employees, including those leased from or coemployed with
211	another entity, and that premium paid by an employee leasing
212	company is commensurate with exposure and anticipated claim
213	experience for all employees.
214	(2)  For purposes of the Florida Insurance Code:
215	(a)  "Employee leasing" shall have the same meaning as set
216	forth in s. 468.520(4).
217	(b)  "Experience rating modification" means a factor
218	applied to a premium to reflect a risk's variation from the
219	average risk. The experience modification is determined by
220	comparing actual losses to expected losses, using the risk's own
221	past experience.
222	(c)  "Leased employee" means a person performing services
223	for a lessee under an employee leasing arrangement.
224	(d)  "Lessee" means an entity which obtains all or part of
225	its workforce from another entity through an employee leasing
226	arrangement or which employs the services of an entity through
227	an employee leasing arrangement.
228	(e)  "Lessor" means an employee leasing company, as set
229	forth in part XI of chapter 468, engaged in the business of or
230	holding itself out as being in the business of employee leasing.
231	A lessor may also be referred to as an employee leasing company.
232	(f)  "Premium subject to dispute" means that the insured
233	has provided a written notice of dispute to the insurer or
234	service carrier, has initiated any applicable proceeding for
235	resolving such disputes as prescribed by law or rating
236	organization procedures approved by the office, or has initiated
237	litigation regarding the premium dispute. The insured must have
238	detailed the specific areas of dispute and provided an estimate
239	of the premium the insured believes to be correct. The insured
240	must have paid any undisputed portion of the bill.
241	(3)  A lessor that obtains coverage in the voluntary
242	workers' compensation market may elect, with the voluntary
243	market insurer's knowledge and consent, to secure the coverage
244	on leased employees through a workers' compensation policy
245	issued to the lessor. The insurer of the lessor may, in its
246	discretion, take all reasonable steps to ascertain exposure
247	under the policy and collect the appropriate premium by:
248	(a)  Requiring the lessor to provide a complete description
249	of lessor's operations.
250	(b)  Requiring periodic reporting by the lessor of covered
251	lessees' payroll, classifications, claims information, loss
252	data, and jurisdictions with exposure. This reporting may be
253	supplemented by a requirement for lessees to submit to the
254	carrier Internal Revenue Service Form 941 or its equivalent on a
255	quarterly basis.
256	(c)  Auditing the lessor's operations.
257	(d)  Using other reasonable measures to determine the
258	appropriate premium.
259	(3)(4)  A lessor that applies for coverage or is covered by
260	a workers' compensation insurance policy through the voluntary
261	market shall also maintain and furnish to the insurer on an
262	annual basis, and as the insurer may otherwise reasonably
263	require, sufficient information to permit the calculation of an
264	experience rating modification factor for each lessee upon
265	termination of the employee leasing relationship. Information
266	accruing during the term of the leasing arrangement which is
267	used to calculate an experience rating modification factor for a
268	lessee upon termination of the leasing relationship shall
269	continue to be used in the future experience ratings of the
270	lessor. Such information shall include:
271	(a)  The lessee's corporate name.
272	(b)  The lessee's taxpayer or employer identification
273	number.
274	(c)  Payroll summaries and class codes applicable to each
275	lessee, and, if requested by the insurer, a listing of all
276	leased employees associated with a given lessee.
277	(d)  Claims information grouped by lessee, and any other
278	information maintained by or readily available to the lessor
279	that is necessary for the calculation of an experience rating
280	modification factor for each lessee.
281	(4)(5)  In addition to any other provision of law, any
282	material violation of this section by an employee leasing
283	company is grounds for cancellation or nonrenewal of the
284	lessor's insurance policy provided that the employee leasing
285	company has been provided a reasonable opportunity to cure the
286	violation. If an employee leasing company has received notice
287	that its workers' compensation insurance policy will be canceled
288	or nonrenewed, the leasing company shall notify by certified
289	mail, within 5 15 days after receipt of the notice, all of the
290	lessees for which there is an employee leasing arrangement
291	covered under the policy to be canceled, except notice is not
292	required if the employee leasing company has obtained another
293	insurance policy with an effective date that is the same as the
294	date of cancellation or nonrenewal.
295	(5)(6)  If the employee leasing arrangement with a lessee
296	is terminated, the lessee shall be assigned an experience rating
297	modification factor which reflects its experience during the
298	experience period specified by the approved experience rating
299	plan, including, if applicable, experience incurred for leased
300	employees under the employee leasing arrangements. The employee
301	leasing company shall notify the insurer of its intent to
302	terminate any lessee relationship prior to termination when
303	feasible. When prior notice is not feasible, the employee
304	leasing company shall notify its insurer within 5 working days
305	following actual termination.
306	(6)(7)  This section shall not have any effect on the
307	statutory obligation, if any, of a lessee to secure workers'
308	compensation coverage for employees that the lessee does not
309	coemploy or lease pursuant to an employee leasing arrangement.
310	(7)(8)  A lessee shall not enter into an employee leasing
311	relationship or be eligible for workers' compensation coverage
312	in the voluntary market if the lessee owes its current or a
313	prior insurer any premium for workers' compensation insurance,
314	or if the lessee owes its current or prior employee leasing
315	company amounts due under the service agreement, except for
316	premium or amounts due that are subject to dispute. For the
317	purposes of this section and compliance with other laws and
318	regulations, a lessor may rely on a sworn statement by the
319	lessee that the lessee has met any and all prior premium or fee
320	obligations, unless the lessor has actual knowledge to the
321	contrary.
322	(8)(9)  Insurers shall conduct annual audits of payroll and
323	classifications of employee leasing companies in order to ensure
324	that the appropriate premium is charged for workers'
325	compensation coverage. The audits shall be conducted to ensure
326	that all sources of payment by lessors to employees,
327	subcontractors, and independent contractors have been reviewed
328	and the accuracy of classifications of employees has been
329	verified. Insurers may provide for more frequent audits of
330	lessors based on such factors as amount of premium, type of
331	business, loss ratios, or other relevant factors. Payroll and
332	classification verification audit rules of insurers must
333	include, but need not be limited to, use by the insurer of state
334	and federal reports of employee income, payroll and other
335	accounting records, certificates of insurance maintained by
336	subcontractors, and duties of employees.
337	(9)(10)  If a lessor or a lessee fails to provide
338	reasonable access to payroll and classification records for a
339	payroll and classification audit, the insured shall pay a
340	premium to the insurer not to exceed three times the most recent
341	estimated annual premium. However, the lessor is not subject to
342	such penalty if the failure to obtain the needed records is the
343	direct result of the acts or omissions of the lessee.
344	Section 4.  This act shall take effect July 1, 2011.

CODING: Words stricken are deletions; words underlined are additions.