Fla. Stat. 627.192
Workers’ compensation insurance; employee leasing arrangements
(1)
The purpose of this section is to ensure that an employer who leases some or all of its workers properly obtains workers’ compensation insurance coverage for all of its employees, including those leased from or coemployed with another entity, and that premium paid by an employee leasing company is commensurate with exposure and anticipated claim experience for all employees.(2)
For purposes of the Florida Insurance Code:“Employee leasing” shall have the same meaning as set forth in s. 468.520(4).“Experience rating modification” means a factor applied to a premium to reflect a risk’s variation from the average risk. The experience modification is determined by comparing actual losses to expected losses, using the risk’s own past experience.“Leased employee” means a person performing services for a lessee under an employee leasing arrangement.“Lessee” means an entity which obtains all or part of its workforce from another entity through an employee leasing arrangement or which employs the services of an entity through an employee leasing arrangement.“Lessor” means an employee leasing company, as set forth in part XI of chapter 468, engaged in the business of or holding itself out as being in the business of employee leasing. A lessor may also be referred to as an employee leasing company.“Premium subject to dispute” means that the insured has provided a written notice of dispute to the insurer or service carrier, has initiated any applicable proceeding for resolving such disputes as prescribed by law or rating organization procedures approved by the office, or has initiated litigation regarding the premium dispute. The insured must have detailed the specific areas of dispute and provided an estimate of the premium the insured believes to be correct. The insured must have paid any undisputed portion of the bill.(a)
“Employee leasing” shall have the same meaning as set forth in s. 468.520(4).(b)
“Experience rating modification” means a factor applied to a premium to reflect a risk’s variation from the average risk. The experience modification is determined by comparing actual losses to expected losses, using the risk’s own past experience.(c)
“Leased employee” means a person performing services for a lessee under an employee leasing arrangement.(d)
“Lessee” means an entity which obtains all or part of its workforce from another entity through an employee leasing arrangement or which employs the services of an entity through an employee leasing arrangement.(e)
“Lessor” means an employee leasing company, as set forth in part XI of chapter 468, engaged in the business of or holding itself out as being in the business of employee leasing. A lessor may also be referred to as an employee leasing company.(f)
“Premium subject to dispute” means that the insured has provided a written notice of dispute to the insurer or service carrier, has initiated any applicable proceeding for resolving such disputes as prescribed by law or rating organization procedures approved by the office, or has initiated litigation regarding the premium dispute. The insured must have detailed the specific areas of dispute and provided an estimate of the premium the insured believes to be correct. The insured must have paid any undisputed portion of the bill.(3)
A lessor that obtains coverage in the voluntary workers’ compensation market may elect, with the voluntary market insurer’s knowledge and consent, to secure the coverage on leased employees through a workers’ compensation policy issued to the lessor. The insurer of the lessor may, in its discretion, take all reasonable steps to ascertain exposure under the policy and collect the appropriate premium by:Requiring the lessor to provide a complete description of lessor’s operations.Requiring periodic reporting by the lessor of covered lessees’ payroll, classifications, claims information, loss data, and jurisdictions with exposure. This reporting may be supplemented by a requirement for lessees to submit to the carrier Internal Revenue Service Form 941 or its equivalent on a quarterly basis.Auditing the lessor’s operations.Using other reasonable measures to determine the appropriate premium.(a)
Requiring the lessor to provide a complete description of lessor’s operations.(b)
Requiring periodic reporting by the lessor of covered lessees’ payroll, classifications, claims information, loss data, and jurisdictions with exposure. This reporting may be supplemented by a requirement for lessees to submit to the carrier Internal Revenue Service Form 941 or its equivalent on a quarterly basis.(c)
Auditing the lessor’s operations.(d)
Using other reasonable measures to determine the appropriate premium.(4)
A lessor that applies for coverage or is covered through the voluntary market shall also maintain and furnish to the insurer on an annual basis, and as the insurer may otherwise reasonably require, sufficient information to permit the calculation of an experience modification factor for each lessee upon termination of the employee leasing relationship. Information accruing during the term of the leasing arrangement which is used to calculate an experience modification factor for a lessee upon termination of the leasing relationship shall continue to be used in the future experience ratings of the lessor. Such information shall include:The lessee’s corporate name.The lessee’s taxpayer or employer identification number.Payroll summaries and class codes applicable to each lessee, and, if requested by the insurer, a listing of all leased employees associated with a given lessee.Claims information grouped by lessee, and any other information maintained by or readily available to the lessor that is necessary for the calculation of an experience modification factor for each lessee.(a)
The lessee’s corporate name.(b)
The lessee’s taxpayer or employer identification number.(c)
Payroll summaries and class codes applicable to each lessee, and, if requested by the insurer, a listing of all leased employees associated with a given lessee.(d)
Claims information grouped by lessee, and any other information maintained by or readily available to the lessor that is necessary for the calculation of an experience modification factor for each lessee.(5)
In addition to any other provision of law, any material violation of this section by an employee leasing company is grounds for cancellation or nonrenewal of the lessor’s insurance policy provided that the employee leasing company has been provided a reasonable opportunity to cure the violation. If an employee leasing company has received notice that its workers’ compensation insurance policy will be canceled or nonrenewed, the leasing company shall notify by certified mail, within 15 days after receipt of the notice, all of the lessees for which there is an employee leasing arrangement covered under the policy to be canceled, except notice is not required if the employee leasing company has obtained another insurance policy with an effective date that is the same as the date of cancellation or nonrenewal.(6)
If the employee leasing arrangement with a lessee is terminated, the lessee shall be assigned an experience modification factor which reflects its experience during the experience period specified by the approved experience rating plan, including, if applicable, experience incurred for leased employees under the employee leasing arrangements. The employee leasing company shall notify the insurer of its intent to terminate any lessee relationship prior to termination when feasible. When prior notice is not feasible, the employee leasing company shall notify its insurer within 5 working days following actual termination.(7)
This section shall not have any effect on the statutory obligation, if any, of a lessee to secure workers’ compensation coverage for employees that the lessee does not coemploy or lease pursuant to an employee leasing arrangement.(8)
A lessee shall not enter into an employee leasing relationship or be eligible for workers’ compensation coverage in the voluntary market if the lessee owes its current or a prior insurer any premium for workers’ compensation insurance, or if the lessee owes its current or prior employee leasing company amounts due under the service agreement, except for premium or amounts due that are subject to dispute. For the purposes of this section and compliance with other laws and regulations, a lessor may rely on a sworn statement by the lessee that the lessee has met any and all prior premium or fee obligations, unless the lessor has actual knowledge to the contrary.(9)
Insurers shall conduct annual audits of payroll and classifications of employee leasing companies in order to ensure that the appropriate premium is charged for workers’ compensation coverage. The audits shall be conducted to ensure that all sources of payment by lessors to employees, subcontractors, and independent contractors have been reviewed and the accuracy of classifications of employees has been verified. Insurers may provide for more frequent audits of lessors based on such factors as amount of premium, type of business, loss ratios, or other relevant factors. Payroll and classification verification audit rules of insurers must include, but need not be limited to, use by the insurer of state and federal reports of employee income, payroll and other accounting records, certificates of insurance maintained by subcontractors, and duties of employees.(10)
If a lessor or a lessee fails to provide reasonable access to payroll and classification records for a payroll and classification audit, the insured shall pay a premium to the insurer not to exceed three times the most recent estimated annual premium. However, the lessor is not subject to such penalty if the failure to obtain the needed records is the direct result of the acts or omissions of the lessee.
Source:
Section 627.192 — Workers’ compensation insurance; employee leasing arrangements, https://www.flsenate.gov/Laws/Statutes/2024/0627.192 (accessed Aug. 7, 2025).