Legislation was recently filed in the Florida Senate that would negatively impact the PEO industry.
The bill would force a PEO’s workers’ compensation policy to cover their clients’ employees even if the PEO does not know they exist or were otherwise not covered under the client service agreement. SB 820, filed by Senator Keith Perry (R – District 8), would require an insurer of an employee leasing company to provide workers’ compensation for both leased and non-leased employees of a client company during the contract period between an employee leasing company and client company.
The bill also amends certain definitions and specifies when a person becomes an employee of the employee leasing company, among other changes. This bill is similar to legislation that was attempted in past years, except this language applies to all industries, not just the construction industry as it had in the past.
PEOs already struggle with getting clients to enter their new hires into the payroll system. This proposed legislation could erode a key advantage PEOs have historically held over ASOs.