Florida Senate - 2020 SB 1356 By Senator Bean 4-00632C-20 20201356__ 1 A bill to be entitled 2 An act relating to employer contributions for 3 reemployment assistance; amending s. 443.1216, F.S.; 4 reducing the initial rate that certain client 5 companies of employee leasing companies must pay under 6 specified circumstances to tax collection service 7 providers; amending s. 443.131, F.S.; requiring the 8 tax collection service provider to adjust the initial 9 employer contribution rate under certain 10 circumstances; providing an effective date. 11 12 Be It Enacted by the Legislature of the State of Florida: 13 14 Section 1. Paragraph (a) of subsection (1) of section 15 443.1216, Florida Statutes, is amended to read: 16 443.1216 Employment.—Employment, as defined in s. 443.036, 17 is subject to this chapter under the following conditions: 18 (1)(a) The employment subject to this chapter includes a 19 service performed, including a service performed in interstate 20 commerce, by: 21 1. An officer of a corporation. 22 2. An individual who, under the usual common-law rules 23 applicable in determining the employer-employee relationship, is 24 an employee. However, whenever a client, as defined in s. 25 443.036(18), which would otherwise be designated as an employing 26 unit has contracted with an employee leasing company to supply 27 it with workers, those workers are considered employees of the 28 employee leasing company. An employee leasing company may lease 29 corporate officers of the client to the client and other workers 30 to the client, except as prohibited by regulations of the 31 Internal Revenue Service. Employees of an employee leasing 32 company must be reported under the employee leasing company’s 33 tax identification number and contribution rate for work 34 performed for the employee leasing company. 35 a. However, except for the internal employees of an 36 employee leasing company, each employee leasing company may make 37 a separate one-time election to report and pay contributions 38 under the tax identification number and contribution rate for 39 each client of the employee leasing company. Under the client 40 method, an employee leasing company choosing this option must 41 assign leased employees to the client company that is leasing 42 the employees. The client method is solely a method to report 43 and pay unemployment contributions, and, whichever method is 44 chosen, such election may not impact any other aspect of state 45 law. An employee leasing company that elects the client method 46 must pay contributions at the rates assigned to each client 47 company. 48 (I) The election applies to all of the employee leasing 49 company’s current and future clients. 50 (II) The employee leasing company must notify the 51 Department of Revenue of its election by July 1, 2012, and such 52 election applies to reports and contributions for the first 53 quarter of the following calendar year. The notification must 54 include: 55 (A) A list of each client company and the unemployment 56 account number or, if one has not yet been issued, the federal 57 employment identification number, as established by the employee 58 leasing company upon the election to file by client method; 59 (B) A list of each client company’s current and previous 60 employees and their respective social security numbers for the 61 prior 3 state fiscal years or, if the client company has not 62 been a client for the prior 3 state fiscal years, such portion 63 of the prior 3 state fiscal years that the client company has 64 been a client must be supplied; 65 (C) The wage data and benefit charges associated with each 66 client company for the prior 3 state fiscal years or, if the 67 client company has not been a client for the prior 3 state 68 fiscal years, such portion of the prior 3 state fiscal years 69 that the client company has been a client must be supplied. If 70 the client company’s employment record is chargeable with 71 benefits for less than 8 calendar quarters while being a client 72 of the employee leasing company, the client company must pay 73 contributions at the initial rate of 2.7 percent. Beginning 74 January 1, 2021, if the client company’s employment record is 75 chargeable with benefits for less than 8 calendar quarters while 76 being a client of the employee leasing company, the client 77 company must pay contributions at the initial rate of 1.0 78 percent; and 79 (D) The wage data and benefit charges for the prior 3 state 80 fiscal years that cannot be associated with a client company 81 must be reported and charged to the employee leasing company. 82 (III) Subsequent to choosing the client method, the 83 employee leasing company may not change its reporting method. 84 (IV) The employee leasing company shall file a Florida 85 Department of Revenue Employer’s Quarterly Report for each 86 client company by approved electronic means, and pay all 87 contributions by approved electronic means. 88 (V) For the purposes of calculating experience rates when 89 the client method is chosen, each client’s own benefit charges 90 and wage data experience while with the employee leasing company 91 determines each client’s tax rate where the client has been a 92 client of the employee leasing company for at least 8 calendar 93 quarters before the election. The client company shall continue 94 to report the nonleased employees under its tax rate. 95 (VI) The election is binding on each client of the employee 96 leasing company for as long as a written agreement is in effect 97 between the client and the employee leasing company pursuant to 98 s. 468.525(3)(a). If the relationship between the employee 99 leasing company and the client terminates, the client retains 100 the wage and benefit history experienced under the employee 101 leasing company. 102 (VII) Notwithstanding which election method the employee 103 leasing company chooses, the applicable client company is an 104 employing unit for purposes of s. 443.071. The employee leasing 105 company or any of its officers or agents are liable for any 106 violation of s. 443.071 engaged in by such persons or entities. 107 The applicable client company or any of its officers or agents 108 are liable for any violation of s. 443.071 engaged in by such 109 persons or entities. The employee leasing company or its 110 applicable client company is not liable for any violation of s. 111 443.071 engaged in by the other party or by the other party’s 112 officers or agents. 113 (VIII) If an employee leasing company fails to select the 114 client method of reporting not later than July 1, 2012, the 115 entity is required to report under the employee leasing 116 company’s tax identification number and contribution rate. 117 (IX) After an employee leasing company is licensed pursuant 118 to part XI of chapter 468, each newly licensed entity has 30 119 days after the date the license is granted to notify the tax 120 collection service provider in writing of their selection of the 121 client method. A newly licensed employee leasing company that 122 fails to timely select reporting pursuant to the client method 123 of reporting must report under the employee leasing company’s 124 tax identification number and contribution rate. 125 (X) Irrespective of the election, each transfer of trade or 126 business, including workforce, or a portion thereof, between 127 employee leasing companies is subject to the provisions of s. 128 443.131(3)(g) if, at the time of the transfer, there is common 129 ownership, management, or control between the entities. 130 b. In addition to any other report required to be filed by 131 law, an employee leasing company shall submit a report to the 132 Labor Market Statistics Center within the Department of Economic 133 Opportunity which includes each client establishment and each 134 establishment of the leasing company, or as otherwise directed 135 by the department. The report must include the following 136 information for each establishment: 137 (I) The trade or establishment name; 138 (II) The former reemployment assistance account number, if 139 available; 140 (III) The former federal employer’s identification number, 141 if available; 142 (IV) The industry code recognized and published by the 143 United States Office of Management and Budget, if available; 144 (V) A description of the client’s primary business activity 145 in order to verify or assign an industry code; 146 (VI) The address of the physical location; 147 (VII) The number of full-time and part-time employees who 148 worked during, or received pay that was subject to reemployment 149 assistance taxes for, the pay period including the 12th of the 150 month for each month of the quarter; 151 (VIII) The total wages subject to reemployment assistance 152 taxes paid during the calendar quarter; 153 (IX) An internal identification code to uniquely identify 154 each establishment of each client; 155 (X) The month and year that the client entered into the 156 contract for services; and 157 (XI) The month and year that the client terminated the 158 contract for services. 159 c. The report must be submitted electronically or in a 160 manner otherwise prescribed by the Department of Economic 161 Opportunity in the format specified by the Bureau of Labor 162 Statistics of the United States Department of Labor for its 163 Multiple Worksite Report for Professional Employer 164 Organizations. The report must be provided quarterly to the 165 Labor Market Statistics Center within the department, or as 166 otherwise directed by the department, and must be filed by the 167 last day of the month immediately after the end of the calendar 168 quarter. The information required in sub-sub-subparagraphs b.(X) 169 and (XI) need be provided only in the quarter in which the 170 contract to which it relates was entered into or terminated. The 171 sum of the employment data and the sum of the wage data in this 172 report must match the employment and wages reported in the 173 reemployment assistance quarterly tax and wage report. 174 d. The department shall adopt rules as necessary to 175 administer this subparagraph, and may administer, collect, 176 enforce, and waive the penalty imposed by s. 443.141(1)(b) for 177 the report required by this subparagraph. 178 e. For the purposes of this subparagraph, the term 179 “establishment” means any location where business is conducted 180 or where services or industrial operations are performed. 181 3. An individual other than an individual who is an 182 employee under subparagraph 1. or subparagraph 2., who performs 183 services for remuneration for any person: 184 a. As an agent-driver or commission-driver engaged in 185 distributing meat products, vegetable products, fruit products, 186 bakery products, beverages other than milk, or laundry or 187 drycleaning services for his or her principal. 188 b. As a traveling or city salesperson engaged on a full 189 time basis in the solicitation on behalf of, and the 190 transmission to, his or her principal of orders from 191 wholesalers, retailers, contractors, or operators of hotels, 192 restaurants, or other similar establishments for merchandise for 193 resale or supplies for use in the business operations. This sub 194 subparagraph does not apply to an agent-driver or a commission 195 driver and does not apply to sideline sales activities performed 196 on behalf of a person other than the salesperson’s principal. 197 4. The services described in subparagraph 3. are employment 198 subject to this chapter only if: 199 a. The contract of service contemplates that substantially 200 all of the services are to be performed personally by the 201 individual; 202 b. The individual does not have a substantial investment in 203 facilities used in connection with the services, other than 204 facilities used for transportation; and 205 c. The services are not in the nature of a single 206 transaction that is not part of a continuing relationship with 207 the person for whom the services are performed. 208 Section 2. Paragraph (a) of subsection (2) of section 209 443.131, Florida Statutes, is amended to read: 210 443.131 Contributions.— 211 (2) CONTRIBUTION RATES.—Each employer must pay 212 contributions equal to the following percentages of wages paid 213 by him or her for employment: 214 (a) Initial rate.—Each employer whose employment record is 215 chargeable with benefits for less than 8 calendar quarters shall 216 pay contributions at the initial rate of 2.7 percent. Beginning 217 January 1, 2021, the tax collection service provider shall 218 adjust the initial rate for each employer whose employment 219 record is chargeable with benefits for less than 8 calendar 220 quarters to 1.0 percent. However, the tax collection service 221 provider may not adjust the initial rate for any year in which 222 the balance in the Unemployment Compensation Trust Fund requires 223 the computation of a positive adjustment factor under sub-sub 224 subparagraph (3)(e)2.a.(III). 225 Section 3. This act shall take effect July 1, 2020.