HB 1383

1	A bill to be entitled
2	An act relating to employee leasing companies; amending s.
3	468.521, F.S.; revising the criteria for appointment of
4	members of the Board of Employee Leasing Companies;
5	amending s. 468.525, F.S.; requiring that an applicant for
6	an initial license as an employee leasing company or
7	employee leasing company group license have a specified
8	net worth; deleting provisions that authorize alternative
9	methods of determining net worth; revising provisions
10	requiring maintenance of net worth; authorizing certain
11	financial statements to be prepared on a consolidated or
12	combined basis; deleting provisions authorizing certain
13	companies to submit financial statements that are reviewed
14	rather than audited by a certified public accountant;
15	requiring that an employee leasing company provide written
16	notice to leased employees under certain circumstances;
17	amending s. 468.529, F.S.; requiring that an employee
18	leasing company make certain information available to the
19	Department of Financial Services; revising procedures for
20	notices of initiation and termination of an employee
21	leasing company contract with a client company;
22	prescribing circumstances under which a person becomes a
23	leased employee; amending s. 627.192, F.S.; requiring a
24	workers' compensation insurer providing coverage for
25	employee leasing companies to provide certain information
26	to the rating organization; requiring a report by the
27	rating organization to the lessee under certain
28	circumstances; requiring workers' compensation coverage
29	for leased employees; providing an effective date.
30
31	Be It Enacted by the Legislature of the State of Florida:
32
33	Section 1.  Subsection (2) of section 468.521, Florida
34	Statutes, is amended to read:
35	468.521  Board of Employee Leasing Companies; membership;
36	appointments; terms.--
37	(2)  Five members of the board shall be chosen from
38	individuals already engaged in the employee leasing industry and
39	must be licensed pursuant to this part. One of the licensed
40	members must be in an employee leasing company that has an
41	annual gross Florida payroll for its leased employees which is
42	among the smallest 20 percent of licensed employee leasing
43	companies in the state at the time of the member's appointment
44	and each reappointment. The remaining two board members shall be
45	residents of this state and must not be, or ever have been,
46	connected with the business of employee leasing. One of the
47	remaining two board members must represent small employers, and
48	the other remaining board member must have experience in the
49	field of insurance regulation.
50	Section 2.  Subsection (3) and paragraph (f) of subsection
51	(4) of section 468.525, Florida Statutes, are amended to read:
52	468.525  License requirements.--
53	(3)  Each employee leasing company licensed by the
54	department shall have a registered agent for service of process
55	in this state and at least one licensed controlling person. In
56	addition, each licensed employee leasing company shall comply
57	with the following requirements:
58	(a)  The employment relationship with workers provided by
59	the employee leasing company to a client company shall be
60	established by written agreement between the leasing company and
61	the client, and written notice of that relationship shall be
62	given by the employee leasing company to each worker who is
63	assigned to perform services at the client company's worksite.
64	(b)  An applicant for an initial employee leasing company
65	license or employee leasing company group license shall have a
66	tangible accounting net worth of not less than $100,000 in
67	accordance with generally accepted accounting principles
68	$50,000.
69	(c)  An applicant for initial or renewal license of an
70	employee leasing company license or employee leasing company
71	group shall have an accounting net worth or shall have
72	guaranties, letters of credit, or other security acceptable to
73	the board in sufficient amounts to offset any deficiency. A
74	guaranty will not be acceptable to satisfy this requirement
75	unless the applicant submits sufficient evidence to satisfy the
76	board that the guarantor has adequate resources to satisfy the
77	obligation of the guaranty.
78	(c)(d)  Each employee leasing company and employee leasing
79	company group shall maintain at all times after licensure a
80	tangible an accounting net worth of at least $100,000 and
81	positive working capital, as determined in accordance with
82	generally accepted accounting principles, or shall have
83	guaranties, letters of credit, or other security acceptable to
84	the board in sufficient amounts to offset any deficiency in net
85	worth or working capital. A guaranty will not be acceptable to
86	satisfy this requirement unless the licensee submits sufficient
87	evidence, as defined by rule, that the guarantor has adequate
88	resources to satisfy the obligation of the guaranty. In
89	determining the amount of working capital, a licensee shall
90	include adequate reserves for all taxes and insurance, including
91	plans of self-insurance or partial self-insurance for claims
92	incurred but not paid and for claims incurred but not reported.
93	Compliance with the requirements of this paragraph is subject to
94	verification by department or board audit.
95	(d)(e)  Each employee leasing company or employee leasing
96	company group shall submit annual financial statements audited
97	by an independent certified public accountant, with the
98	application and within 120 days after the end of each fiscal
99	year, in a manner and time prescribed by the board. The
100	financial statements may be prepared on a consolidated or
101	combined basis., provided however, that any employee leasing
102	company or employee leasing company group with gross Florida
103	payroll of less than $2.5 million during any fiscal year may
104	submit financial statements reviewed by an independent certified
105	public accountant for that year.
106	(e)(f)  The licensee shall notify the department or board
107	in writing within 30 days after any change in the application or
108	status of the license.
109	(f)(g)  Each employee leasing company or employee leasing
110	company group shall maintain accounting and employment records
111	relating to all employee leasing activities for a minimum of 3
112	calendar years.
113	(4)  The employee leasing company's contractual
114	arrangements with its client companies shall satisfy the
115	following conditions, whereby the leasing company:
116	(f)  Is obligated to give Has given written notice of the
117	relationship between the employee leasing company and the client
118	company to all each leased employees as to whether the employee
119	leasing company is providing workers' compensation coverage
120	employee it assigns to perform services at the client's
121	worksite.
122	Section 3.  Section 468.529, Florida Statutes, is amended
123	to read:
124	468.529  Licensee's insurance; employment tax; benefit
125	plans.--
126	(1)  A licensed employee leasing company is the employer of
127	the leased employees, except that this provision is not intended
128	to affect the determination of any issue arising under Pub. L.
129	No. 93-406, the Employee Retirement Income Security Act, as
130	amended from time to time. An employee leasing company shall be
131	responsible for timely payment of unemployment taxes pursuant to
132	chapter 443, and shall be responsible for providing workers'
133	compensation coverage pursuant to chapter 440. However, no
134	licensed employee leasing company shall sponsor a plan of self-
135	insurance for health benefits, except as may be permitted by the
136	provisions of the Florida Insurance Code or, if applicable, by
137	Pub. L. No. 93-406, the Employee Retirement Income Security Act,
138	as amended from time to time. For purposes of this section, a
139	"plan of self-insurance" shall exclude any arrangement where an
140	admitted insurance carrier has issued a policy of insurance
141	primarily responsible for the obligations of the health plan.
142	(2)  An initial or renewal license may not be issued to any
143	employee leasing company unless the employee leasing company
144	first files with the board evidence of workers' compensation
145	coverage for all leased employees in this state. Each employee
146	leasing company shall maintain and make available to its
147	workers' compensation carrier and the Department of Financial
148	Services the following information:
149	(a)  The correct name and federal identification number of
150	each client company.
151	(b)  A listing of all covered employees provided to each
152	client company, by classification code.
153	(c)  The total eligible wages by classification code and
154	the premiums due to the carrier for the employees provided to
155	each client company.
156	(3)  A licensed employee leasing company shall within 7 30
157	days after initiation of an employee leasing company contract
158	with a client company or termination notify, in a format
159	acceptable to the Department of Financial Services, its workers'
160	compensation insurance carrier, the Division of Workers'
161	Compensation of the Department of Financial Services, and the
162	state agency providing unemployment tax collection services
163	under contract with the Agency for Workforce Innovation through
164	an interagency agreement pursuant to s. 443.1316 of both the
165	initiation or the termination of the employee leasing company's
166	relationship with the any client company. A notice of
167	termination of an employee leasing company's contract with a
168	client company shall be provided as set forth in this subsection
169	to those agencies and entities within 7 days after the employee
170	leasing company's receipt of written notification from the
171	client company that it is terminating the contractual
172	relationship with the employee leasing company or within 7 days
173	after receipt by the client company of the employee leasing
174	company's written notification that it is terminating the
175	contractual relationship with the client company. Such
176	notification must set forth the date of termination of the
177	employee leasing relationship.
178	(4)  An initial or renewal license may not be issued to any
179	employee leasing company unless the employee leasing company
180	first provides evidence to the board, as required by board rule,
181	that the employee leasing company has paid all of the employee
182	leasing company's obligations for payroll, payroll-related
183	taxes, workers' compensation insurance, and employee benefits.
184	All disputed amounts must be disclosed in the application.
185	(5)  A person applying to become a leased employee shall
186	become a leased employee upon the receipt by the employee
187	leasing company of the written notice provided by the employee
188	leasing company under s. 468.525(4)(f) which is signed by the
189	applicant acknowledging that the applicant has been informed of
190	the relationship between the employee leasing company and the
191	client company, the receipt by the employee leasing company of a
192	completed application for employment and any additional forms
193	required by the employee leasing company, or the receipt by the
194	applicant of the applicant's first paycheck from the employee
195	leasing company, whichever occurs first.
196	(6)(5)  The provisions of this section are subject to
197	verification by department or board audit.
198	Section 4.  Subsection (4) of section 627.192, Florida
199	Statutes, is amended, and subsection (11) is added to that
200	section, to read:
201	627.192  Workers' compensation insurance; employee leasing
202	arrangements.--
203	(4)  A lessor that applies for coverage or is covered
204	through the voluntary market shall also maintain and furnish to
205	the insurer on an annual basis, and as the insurer may otherwise
206	reasonably require, sufficient information to permit the
207	calculation of an experience modification factor for each lessee
208	upon termination of the employee leasing relationship. The
209	insurer shall report periodically to its rating organization
210	such information submitted by each lessor. Information accruing
211	during the term of the leasing arrangement which is used to
212	calculate an experience modification factor for a lessee upon
213	termination of the leasing relationship shall continue to be
214	used in the future experience ratings of the lessor. The rating
215	organization shall report the experience modification factor for
216	a lessee, if that information is available, within 30 days after
217	a request for that information is made by the lessee. Such
218	information shall include:
219	(a)  The lessee's corporate name.
220	(b)  The lessee's taxpayer or employer identification
221	number.
222	(c)  Payroll summaries and class codes applicable to each
223	lessee, and, if requested by the insurer, a listing of all
224	leased employees associated with a given lessee.
225	(d)  Claims information grouped by lessee, and any other
226	information maintained by or readily available to the lessor
227	that is necessary for the calculation of an experience
228	modification factor for each lessee.
229	(11)  Except as otherwise authorized, a lessor shall
230	provide workers' compensation insurance coverage to all leased
231	employees of a lessee.
232	Section 5.  This act shall take effect January 1, 2007.

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