Disability Law

Proposed Legislation Would Affect Employee Leasing Companies

By David A. McCranie, Esq.

Though Florida's annual legislative session is set to begin on March 4, so far only two bills have been filed which would meaningfully affect the area of workers' compensation. Those identical bills, SB 454 and HB 239, concern employee leasing companies. Under these proposed bills:

(1) the contract between the leasing company and the client company must provide that the leasing company will give notice to all leased employees as to whether their workers’ compensation coverage is being provided by the leasing company or by the client company;

(2) when the leasing company terminates its contractual relationship with the client company, the leasing company must give written notice of that fact, including the date of contract termination, to each leased employee at the employee's last known address;

(3) the leasing company's workers' compensation insurance policy will no longer cover a leased employee at the earliest of (a) three days after the leasing company mails a notice of the contract’s termination to the last known address of the leased employee or (b) when the terminated leased employee has actual knowledge that he or she is no longer an employee of the of either the client company or of the leasing company.

(4) when the leasing company continues its contractual relationship with the client company, but terminates the employment of, lays off, or places on a leave of absence a leased employee, the leased employee is no longer covered by the leasing company’s workers’ compensation policy at the earliest of (a) three days after the leasing company mails a notice to the leased employee that he has been laid off, placed on a leave of absence, or is no longer an employee of the client company or leasing company to the last known address of the leased employee or (b) when the terminated leased employee has actual knowledge that he or she is no longer an employee of the of either the client company or of the leasing company. (The leased employee’s receipt and acceptance of either a direct deposit or cash from the client company that contains no indication that the payment is from the leasing company is conclusive proof that the leased employee had knowledge that he is no longer an employee of the leasing company).

(5) the immunity from tort liability provided by §440.11(2) applies both to the client company and to the leasing company, regardless of which one provides the workers’ compensation coverage.

 

These bills appear to modify the holdings of the First District Court of Appeal in Blue Stone Real Estate v. Ward and in Payroll, Inc. v. Elicker, 668 So.2d 1035 (Fla. 1st DCA 1996), which held that a leased employee remains an employee of the leasing company for workers' compensation purposes where the leasing company never notifies the leased employee that it has terminated its leasing contract with the client company. The bills also appear to modify the holdings in cases such as St. Lucie Falls Property Association v. Morelli, 956 So.2d 1283 (Fla. 4^th DCA 2007). In cases like Morelli, there are oftentimes “issues of fact” (thereby precluding summary judgment) about whether a leased employee is actually a “borrowed servant” of the client company. If he is not, then the client company is not entitled to immunity from tort liability.

If passed, this legislation is set to take effect on 7/1/2008.

Full post as published by Florida Workers’ Compensation Law Blog on February 13, 2008 (boomark / email).