PEO Brokers, Agents, and Interested Parties.

The attack against the PEO industry continues…  Like the previous email, the State Legislature is reviewing possible legislation that would be damaging for the PEO industry and as a result your career as a PEO advocate and sales professional.  They had a two prong approach but have consolidated efforts under one bill.  The abandoned Senate Bill 820 / House Bill 1183 are now under Senate Bill / House Bill 1305. 

FL Senate Bill 1458 / FL House Bill 1305: Workers’ Compensation Insurance for Employee Leasing Companies

(These bills are companion bills meaning they will mirror each other in each branch of government.)

Just like the previous bill, this proposed legislation is bad for the PEO industry as it tries to put PEO’s on the hook to cover non employees with workers’ compensation without knowledge of those individuals or collection of any premium!  This bill also wants to impose periods of free workers compensation to be provided by the PEO to its clients and additional time consuming and expensive administrative tasks.  

A contractor who fails to report all wages of all of its employees to a workers’ compensation carrier or to an employee leasing company is engaging in workers’ compensation fraud. Under existing law, the carrier for the general contractor is ultimately liable for injuries to the workers of uninsured contractors on their job sites. This legislation considers shifting liability for workers’ compensation fraud at construction worksites from the general contractor to an employee leasing company that is not a part of the construction contract or the contractor relationship.

By shifting liability to employee leasing companies, the proposed legislation would perpetuate and encourage workers’ compensation fraud.

This would make the employee leasing company responsible for workers’ compensation insurance coverage for all direct employees of the subcontractor on the job site, regardless of whether any of those employees are leased.  What happens when a PEO is not involved at the job site?  Nothing different than under current law.  So, if there was actually a gap that needed to be addressed, this bill does not fix the alleged problem, clearly making this an attack on the PEO industry alone.

This bill also would impose governments will in the contract between the PEO and its client by requiring the PEO provide workers’ compensation insurance after the agreement has been terminated for 20 additional days.  What if the client is the one that terminated the agreement?  What if the contract was violated with cause?  There are many questions and many scenarios that one could imagine where this would be bad policy even if you exclude the undetermined immeasurable liability extended by the free coverage.  

It is important for you to reach out to your local legislator that represents you in the House and the Senate.  As a PEO expert, you are in a great position to explain to them how PEO’s work and why there is no “gap in coverage” as some are proposing.  It’s important to tell them how bad this bill is for you, your community, your industry, and simply bad for business.  

Here are the links to the bills for your reference: Senate Bill, House Bill