Disability Law

Employee Leasing Company Not Liable for Injuries to Employee of its Client

By David A. McCranie, Esq.

Crum Services v. Lopez, decided on 3/6/2008, illustrates a situation that arises all too often in the context of employee leasing companies.  Crum Services is an employee leasing company (also known as a "professional employer organization" or "PEO") who entered into a contract with P&G Roofing to provide leased employees to P&G.  The contract between Crum and P&G provided that Crum would provide workers' compensation coverage to all of P&G's leased employees.  In order to be a "leased employee," however, the contract specifically provided that the employee must first complete an employment application, a W-4 withholding form, and a Form I-9, all of which had to be delivered to Crum "before the employee commences employment."

Mr. Del Sol, an employee of P&G, hired Lopez to work for P&G at the rate of $80.00 per day.  Lopez did not, however, complete any paperwork for Crum.  He was injured on the third day of his employment with P&G, causing him to miss work for about four months.  Mr. Del Sol took Lopez to the doctor after the accident and promised to pay him $200.00 per week while he was out of work (about four months), but he never did. 

Under these circumstances, the First DCA held that although the claimant was clearly an employee of P&G, he was not an employee of Crum. Unfortunately for Mr. Lopez, despite being subpoenaed, P&G never made an appearance in the case and is likely "judgment proof."

In his concurring opinion, Judge Van Nortwick urges legislative action to correct this coverage "gap" common in employee leasing arrangements which allows employees such as Mr. Lopez to "fall through" the system.  Although there are three bills presently pending before the legislature involving the subject of employee leasing companies (SB 454, HB 239, and SB 2548), it doesn't appear to me that any of them would provide relief for this type of situation, i.e., where the client company retains the authority to hire its own employees, but lacks the authority to bind the employee leasing company with its decision to hire.

Full post as published by Florida Workers’ Compensation Law Blog on March 07, 2008 (boomark / email).