Bill Text: FL S1658 | 2024 | Regular Session | Introduced
Bill Title: Workers' Compensation Insurance for Employee Leasing Companies
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2024-03-08 - Died in Banking and Insurance [S1658 Detail]
Download: Florida-2024-S1658-Introduced.html
Florida Senate - 2024 SB 1658
By Senator Perry
9-01123-24 20241658__
1 A bill to be entitled
2 An act relating to workers’ compensation insurance for
3 employee leasing companies; amending s. 627.192, F.S.;
4 revising the purpose of specified provisions governing
5 workers’ compensation insurance; defining the terms
6 “client company” and “employee leasing company”;
7 revising definitions; deleting the definitions of the
8 terms “lessee” and “lessor”; authorizing the insurer
9 of an employee leasing company to require that the
10 employee leasing company and client company provide
11 certain information and to audit the operations of the
12 employee leasing company and client company; requiring
13 the insurer of an employee leasing company to provide
14 workers’ compensation coverage to all employees of the
15 client company under certain conditions; specifying
16 when a person is an employee of an employee leasing
17 company; providing that the failure by a client
18 company to report a leased employee’s hiring to an
19 employee leasing company may not serve as a basis for
20 the denial of workers’ compensation benefits for an
21 unreported client company employee; providing that
22 such failure does not preclude the charging of
23 additional premiums by an employee leasing company’s
24 insurer against a client company for workers’
25 compensation coverage; requiring insurers to conduct
26 annual audits of employee leasing companies and client
27 companies for certain purposes; applying penalties for
28 an employee leasing company’s or client company’s
29 failure to provide reasonable access to certain
30 records; conforming provisions to changes made by the
31 act; making technical changes; providing an effective
32 date.
33
34 Be It Enacted by the Legislature of the State of Florida:
35
36 Section 1. Section 627.192, Florida Statutes, is amended to
37 read:
38 627.192 Workers’ compensation insurance; employee leasing
39 arrangements.—
40 (1) The purpose of this section is to ensure that an
41 employer who leases some or all of its workers properly obtains
42 workers’ compensation insurance coverage in compliance with
43 chapter 440 for all of its employees, including those leased
44 from an employee leasing company or coemployed with another
45 entity, and that premium paid by an employee leasing company is
46 commensurate with exposure and anticipated claim experience for
47 all employees.
48 (2) For purposes of the Florida Insurance Code:
49 (a) “Client company” has the same meaning as provided in s.
50 468.520(6).
51 (b) “Employee leasing” has shall have the same meaning as
52 provided set forth in s. 468.520(4).
53 (c) “Employee leasing company” has the same meaning as
54 provided in s. 468.520(5).
55 (d)(b) “Experience rating modification factor” means a
56 factor applied to a premium to reflect a risk’s variation from
57 the average risk. The experience modification is determined by
58 comparing actual losses to expected losses, using the risk’s own
59 past experience.
60 (e)(c) “Leased employee” means an employee as defined in s.
61 440.02(18) a person performing services for a client company
62 lessee under an employee leasing arrangement.
63 (d) “Lessee” means an entity which obtains all or part of
64 its workforce from another entity through an employee leasing
65 arrangement or which employs the services of an entity through
66 an employee leasing arrangement.
67 (e) “Lessor” means an employee leasing company, as set
68 forth in part XI of chapter 468, engaged in the business of or
69 holding itself out as being in the business of employee leasing.
70 A lessor may also be referred to as an employee leasing company.
71 (f) “Premium subject to dispute” means that the insured has
72 provided a written notice of dispute to the insurer or service
73 carrier, has initiated any applicable proceeding for resolving
74 such disputes as prescribed by law or rating organization
75 procedures approved by the office, or has initiated litigation
76 regarding the premium dispute. The insured must have detailed
77 the specific areas of dispute and provided an estimate of the
78 premium the insured believes to be correct. The insured must
79 have paid any undisputed portion of the bill.
80 (3) An employee leasing company A lessor that obtains
81 coverage in the voluntary workers’ compensation market may
82 elect, with the voluntary market insurer’s knowledge and
83 consent, to secure the coverage on leased employees through a
84 workers’ compensation policy issued to the employee leasing
85 company lessor. The insurer of the employee leasing company
86 lessor may, in its discretion, take all reasonable steps to
87 ascertain exposure under the policy and collect the appropriate
88 premium by:
89 (a) Requiring the employee leasing company and the client
90 company lessor to provide a complete description of the employee
91 leasing company’s and the client company’s respective lessor’s
92 operations.
93 (b) Requiring periodic reporting by the employee leasing
94 company lessor of covered client companies’ lessees’ payroll,
95 classifications, claims information, loss data, and
96 jurisdictions with exposure. This reporting may be supplemented
97 by a requirement for client companies lessees to submit to the
98 insurer carrier Internal Revenue Service Form 941 or its
99 equivalent on a quarterly basis.
100 (c) Auditing the employee leasing company’s or the client
101 company’s lessor’s operations.
102 (d) Using other reasonable measures to determine the
103 appropriate premium.
104 (4)(a) During the contract period of an employee leasing
105 arrangement with a client company, the insurer of an employee
106 leasing company must provide workers’ compensation coverage for
107 all leased and nonleased employees of the client company if the
108 client company fails to secure and maintain separate workers’
109 compensation coverage as required by this section and ss. 440.10
110 and 440.38. A person is such an employee of the employee leasing
111 company upon the earliest of the following:
112 1. The hiring of such person by the client company;
113 2. The commencement of work for the client company by such
114 person; or
115 3. The hiring of the person directly by the employee
116 leasing company.
117 (b) The failure by a client company to report a leased
118 employee’s hiring to an employee leasing company may not serve
119 as a basis for the denial of workers’ compensation benefits for
120 such unreported employee of a client company and does not
121 preclude the charging of additional premiums and penalties by an
122 employee leasing company’s insurer against a client company for
123 workers’ compensation coverage as provided by s. 440.381.
124 (5) An employee leasing company A lessor that applies for
125 coverage or is covered through the voluntary market shall also
126 maintain and furnish to the insurer on an annual basis, and as
127 the insurer may otherwise reasonably require, sufficient
128 information to permit the calculation of an experience rating
129 modification factor for each client company lessee upon
130 termination of the employee leasing arrangement relationship.
131 For calculating future experience ratings of an employee leasing
132 company upon termination of a leasing arrangement, an insurer
133 shall continue using information that accrued accruing during
134 the term of the leasing arrangement which was is used to
135 calculate an experience rating modification factor for a client
136 company lessee upon termination of the leasing relationship
137 shall continue to be used in the future experience ratings of
138 the lessor. Such information must shall include:
139 (a) The client company’s lessee’s corporate name.
140 (b) The client company’s lessee’s taxpayer or employer
141 identification number.
142 (c) Payroll summaries and class codes applicable to each
143 client company lessee, and, if requested by the insurer, a
144 listing of all leased employees associated with a given client
145 company lessee.
146 (d) Claims information grouped by client company lessee,
147 and any other information maintained by or readily available to
148 the employee leasing company which lessor that is necessary for
149 the calculation of an experience rating modification factor for
150 each client company lessee.
151 (6)(5) In addition to any other provision of law, any
152 material violation of this section by an employee leasing
153 company is grounds for cancellation or nonrenewal of the
154 employee leasing company’s lessor’s insurance policy, provided
155 that the insurer provides the employee leasing company has been
156 provided a reasonable opportunity to cure the violation. If an
157 employee leasing company receives has received notice that its
158 workers’ compensation insurance policy will be canceled or
159 nonrenewed, the leasing company must shall notify by certified
160 mail, within 15 days after receipt of the notice, all of the
161 client companies lessees for which there is an employee leasing
162 arrangement covered under the policy to be canceled, except
163 notice is not required if the employee leasing company has
164 obtained another insurance policy with an effective date that is
165 the same as the date of cancellation or nonrenewal.
166 (7)(6) If an employee leasing company terminates the
167 employee leasing arrangement with a client company lessee is
168 terminated, the client company must lessee shall be assigned an
169 experience rating modification factor which reflects its
170 experience during the experience period specified by the
171 approved experience rating plan, including, if applicable,
172 experience incurred for leased employees under the employee
173 leasing arrangements. The employee leasing company shall notify
174 the insurer of its intent to terminate any employee leasing
175 arrangement lessee relationship prior to termination when
176 feasible. When prior notice is not feasible, the employee
177 leasing company shall notify its insurer within 5 working days
178 following actual termination.
179 (8)(7) This section does not affect shall not have any
180 effect on the statutory obligation, if any, of a client company
181 lessee to secure workers’ compensation coverage for employees
182 that the client company lessee does not coemploy or lease
183 pursuant to an employee leasing arrangement.
184 (9)(8) A client company may lessee shall not enter into an
185 employee leasing arrangement relationship or be eligible for
186 workers’ compensation coverage in the voluntary market if the
187 client company lessee owes its current or a prior insurer any
188 premium for workers’ compensation insurance, or if the client
189 company lessee owes its current or prior employee leasing
190 company amounts due under the service agreement, except for
191 premium or amounts due that are subject to dispute. For the
192 purposes of this section and compliance with other laws and
193 regulations, an employee leasing company a lessor may rely on a
194 sworn statement by the client company lessee that the client
195 company lessee has met any and all prior premium or fee
196 obligations, unless the employee leasing company lessor has
197 actual knowledge to the contrary.
198 (10)(9) Insurers shall conduct annual audits of payroll and
199 classifications of employee leasing companies and client
200 companies in compliance with s. 440.381 in order to ensure that
201 the appropriate premium is charged for workers’ compensation
202 coverage. Insurers shall conduct audits The audits shall be
203 conducted to ensure that all sources of payment by employee
204 leasing companies and client companies lessors to employees,
205 subcontractors, and independent contractors have been reviewed
206 and the accuracy of classifications of employees has been
207 verified. Insurers may provide for more frequent audits of
208 employee leasing companies and client companies lessors based on
209 such factors as amount of premium, type of business, loss
210 ratios, or other relevant factors. Payroll and classification
211 verification audit rules of insurers must include, but need not
212 be limited to, use by the insurer of state and federal reports
213 of employee income, payroll and other accounting records,
214 certificates of insurance maintained by subcontractors, and
215 duties of employees.
216 (11)(10) If an employee leasing company a lessor or a
217 client company lessee fails to provide reasonable access to
218 payroll and classification records for a payroll and
219 classification audit, the employee leasing company or the client
220 company must insured shall pay a premium to the insurer not to
221 exceed three times the most recent estimated annual premium.
222 However, the employee leasing company lessor is not subject to
223 such penalty if the failure to obtain the needed records is the
224 direct result of the acts or omissions of the client company
225 lessee.
226 Section 2. This act shall take effect July 1, 2024.
