HB 1383

CS

CHAMBER ACTION

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

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