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.
   12  Be It Enacted by the Legislature of the State of Florida:
   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.