The Florida Senate

440.05  Election of exemption; revocation of election; notice; certification.--

(1)  Each corporate officer who elects not to accept the provisions of this chapter or who, after electing such exemption, revokes that exemption shall mail to the department in Tallahassee notice to such effect in accordance with a form to be prescribed by the department.

(2)  Each sole proprietor or partner who elects to be included in the definition of "employee" or who, after such election, revokes that election must mail to the department in Tallahassee notice to such effect, in accordance with a form to be prescribed by the department.

(3)  Each sole proprietor, partner, or officer of a corporation who is actively engaged in the construction industry and who elects an exemption from this chapter or who, after electing such exemption, revokes that exemption, must mail a written notice to such effect to the department on a form prescribed by the department. The notice of election to be exempt from the provisions of this chapter must be notarized and under oath. The notice of election to be exempt which is submitted to the department by the sole proprietor, partner, or officer of a corporation must list the name, federal tax identification number, social security number, all certified or registered licenses issued pursuant to chapter 489 held by the person seeking the exemption, a copy of relevant documentation as to employment status filed with the Internal Revenue Service as specified by the department, a copy of the relevant occupational license in the primary jurisdiction of the business, and, for corporate officers and partners, the registration number of the corporation or partnership filed with the Division of Corporations of the Department of State. The notice of election to be exempt must identify each sole proprietorship, partnership, or corporation that employs the person electing the exemption and must list the social security number or federal tax identification number of each such employer and the additional documentation required by this section. In addition, the notice of election to be exempt must provide that the sole proprietor, partner, or officer electing an exemption is not entitled to benefits under this chapter, must provide that the election does not exceed exemption limits for officers and partnerships provided in s. 440.02, and must certify that any employees of the sole proprietor, partner, or officer electing an exemption are covered by workers' compensation insurance. Upon receipt of the notice of the election to be exempt, receipt of all application fees, and a determination by the department that the notice meets the requirements of this subsection, the department shall issue a certification of the election to the sole proprietor, partner, or officer, unless the department determines that the information contained in the notice is invalid. The department shall revoke a certificate of election to be exempt from coverage upon a determination by the department that the person does not meet the requirements for exemption or that the information contained in the notice of election to be exempt is invalid. The certificate of election must list the names of the sole proprietorship, partnership, or corporation listed in the request for exemption. A new certificate of election must be obtained each time the person is employed by a new sole proprietorship, partnership, or corporation that is not listed on the certificate of election. A copy of the certificate of election must be sent to each workers' compensation carrier identified in the request for exemption. Upon filing a notice of revocation of election, a sole proprietor, partner, or officer who is a subcontractor must notify her or his contractor. Upon revocation of a certificate of election of exemption by the department, the department shall notify the workers' compensation carriers identified in the request for exemption.

(4)  The notice of election to be exempt from the provisions of this chapter must contain a notice that clearly states in substance the following: "Any person who, knowingly and with intent to injure, defraud, or deceive the department or any employer or employee, insurance company, or purposes program, files a notice of election to be exempt containing any false or misleading information is guilty of a felony of the third degree." Each person filing a notice of election to be exempt shall personally sign the notice and attest that he or she has reviewed, understands, and acknowledges the foregoing notice.

(5)  A notice given under subsection (1), subsection (2), or subsection (3) shall become effective when issued by the department or 30 days after an application for an exemption is received by the department, whichever occurs first. However, if an accident or occupational disease occurs less than 30 days after the effective date of the insurance policy under which the payment of compensation is secured or the date the employer qualified as a self-insurer, such notice is effective as of 12:01 a.m. of the day following the date it is mailed to the department in Tallahassee.

(6)  A construction industry certificate of election to be exempt which is issued in accordance with this section shall be valid for 2 years after the effective date stated thereon. Both the effective date and the expiration date must be listed on the face of the certificate by the department. The construction industry certificate must expire at midnight, 2 years from its issue date, as noted on the face of the exemption certificate. Any person who has received from the division a construction industry certificate of election to be exempt which is in effect on December 31, 1998, shall file a new notice of election to be exempt by the last day in his or her birth month following December 1, 1998. A construction industry certificate of election to be exempt may be revoked before its expiration by the sole proprietor, partner, or officer for whom it was issued or by the department for the reasons stated in this section. At least 60 days prior to the expiration date of a construction industry certificate of exemption issued after December 1, 1998, the department shall send notice of the expiration date and an application for renewal to the certificateholder at the address on the certificate.

(7)  Any contractor responsible for compensation under s. 440.10 may register in writing with the workers' compensation carrier for any subcontractor and shall thereafter be entitled to receive written notice from the carrier of any cancellation or nonrenewal of the policy.

(8)(a)  The department must assess a fee of $50 with each request for a construction industry certificate of election to be exempt or renewal of election to be exempt under this section.

(b)  The funds collected by the department shall be used to administer this section, to audit the businesses that pay the fee for compliance with any requirements of this chapter, and to enforce compliance with the provisions of this chapter.

(9)  The department may by rule prescribe forms and procedures for filing an election of exemption, revocation of election to be exempt, and notice of election of coverage for all employers and require specified forms to be submitted by all employers in filing for the election of exemption. The department may by rule prescribe forms and procedures for issuing a certificate of the election of exemption.

(10)  Each sole proprietor, partner, or officer of a corporation who is actively engaged in the construction industry and who elects an exemption from this chapter shall maintain business records as specified by the ¹division by rule, which rules must include the provision that any corporation with exempt officers and any partnership actively engaged in the construction industry with exempt partners must maintain written statements of those exempted persons affirmatively acknowledging each such individual's exempt status.

(11)  Any sole proprietor or partner actively engaged in the construction industry claiming an exemption under this section shall maintain a copy of his or her federal income tax records for each of the immediately previous 3 years in which he or she claims an exemption. Such federal income tax records must include a complete copy of the following for each year in which an exemption is claimed:

(a)  For sole proprietors, a copy of Federal Income Tax Form 1040 and its accompanying Schedule C;

(b)  For partners, a copy of the partner's Federal Income Tax Schedule K-1 (Form 1065) and Federal Income Tax Form 1040 and its accompanying Schedule E.

A sole proprietor or partner shall produce, upon request by the ¹division, a copy of those documents together with a statement by the sole proprietor or partner that the tax records provided are true and accurate copies of what the sole proprietor or partner has filed with the federal Internal Revenue Service. The statement must be signed under oath by the sole proprietor or partner and must be notarized. The ¹division shall issue a stop-work order under s. 440.107(5) to any sole proprietor or partner who fails or refuses to produce a copy of the tax records and affidavit required under this paragraph to the ¹division within 3 business days after the request is made.

(12)  For those sole proprietors or partners that have not been in business long enough to provide the information required of an established business, the ¹division shall require such sole proprietor or partner to provide copies of the most recently filed Federal Income Tax Form 1040. The ¹division shall establish by rule such other criteria to show that the sole proprietor or partner intends to engage in a legitimate enterprise within the construction industry and is not otherwise attempting to evade the requirements of this section. The ¹division shall establish by rule the form and format of financial information required to be submitted by such employers.

(13)  Any corporate officer claiming an exemption under this section must be listed on the records of this state's Secretary of State, Division of Corporations, as a corporate officer. If the person who claims an exemption as a corporate officer is not so listed on the records of the Secretary of State, the individual must provide to the ¹division, upon request by the ¹division, a notarized affidavit stating that the individual is a bona fide officer of the corporation and stating the date his or her appointment or election as a corporate officer became or will become effective. The statement must be signed under oath by both the officer and the president or chief operating officer of the corporation and must be notarized. The ¹division shall issue a stop-work order under s. 440.107(1) to any corporation who employs a person who claims to be exempt as a corporate officer but who fails or refuses to produce the documents required under this subsection to the ¹division within 3 business days after the request is made.

History.--s. 5, ch. 17481, 1935; CGL 1936 Supp. 5966(5); ss. 17, 35, ch. 69-106; s. 2, ch. 70-148; s. 1, ch. 70-439; s. 3, ch. 74-197; s. 2, ch. 75-209; s. 23, ch. 78-300; s. 124, ch. 79-40; s. 21, ch. 79-312; s. 43, ch. 89-289; s. 56, ch. 90-201; s. 52, ch. 91-1; s. 2, ch. 91-2; s. 3, ch. 93-415; s. 99, ch. 97-103; s. 1, ch. 98-125; s. 2, ch. 98-174; s. 40, ch. 99-240; s. 13, ch. 2002-194; s. 6, ch. 2002-236.

¹Note.--The Division of Workers' Compensation of the Department of Labor and Employment Security was transferred to the Department of Insurance by s. 1, ch. 2002-194. Section 13, ch. 2002-194, replaced existing references to the division in s. 440.05 with references to the Department of Insurance.