Cam Fentriss, FRSA LEGISLATIVE COUNSEL
Even when rates are reasonable, we have a list of things to do in the effort to keep workers’ comp insurance from landing back in a ditch.
The concern now is the behavior of employee leasing companies or PEO's. They are great at taking your money and sometimes not so great at assuming responsibility when there is an injury. Let me explain.
Unlike insurance companies, PEO's are allowed to provide differing and optional services, and that can make insurance accountability impossible. Unlike construction contracting, PEO's have too much latitude in specific and detailed compliance rules. Unlike all other employers, PEO's can finesse their employer obligations to avoid the big obligations, such as OSHA. Unlike any other person or entity, PEO's seem to fully use their cultivated set of double standards so the applicable rules for employers, insurance, safety and all forms of responsibility can apply to them when convenient and not when they’d rather not comply. I have to hand it to them, PEO's have perfected the art of having it both ways. And because no government entity should spend all its enforcement money in one
place, PEO's get away with some slippery moves because they toggle from one role to another.
We are working to have PEO's play by the same rules as do all other employers, and they are fighting us. They argue they do not break the rules, but rather it’s those fraudulent PEO client contractors who save a buck by waiting to report hires to the PEO and paying in cash and trying to squeeze one in when there is an injury, etc. It’s the old “we’re the victim” sob story. But the victim is the one who gets hurt, so how are you a victim when you collect money, pay nothing and dodge the expensive responsibility?
If you are a contractor who uses a PEO, how does it feel to know they are happy to take your money AND throw you right under the bus when it’s time to try to solve the very real problem of PEO-denied workers’ comp claims?
And they do not just blame the problems on contractor clients – when it comes time to talk solutions, they are quick to suggest that it be contractors, not PEO's, who make all the changes. They call for more penalties against cheating contractors. Incorrectly, they demand to know why the Division of Workers’ Compensation is not enforcing the law. For the record, the Division works very hard to enforce the law. Also for the record, since PEO's are not usually on jobsites and so many PEO's claim they have no direct responsibility for much of this level of compliance, how would a PEO know whether or not the Division is monitoring compliance and issuing stop work orders?
Unless I completely misunderstand what the PEO representatives say in meetings, they believe they are the employer of leased employees until the serious stuff comes up (like OSHA and other costly employer responsibilities). If an employee appears to be leased and gets injured, too often the PEO or the PEO’s insurer are allowed to simply deny responsibility without the kind of documentation that applies to actual employers and other insurers.
I will bet that, if confronted with this blame tactic,
a PEO would tell its client contractor that it’s cheaper
for the client contractor to increase penalties
on bad contractors than to make PEO's and their insurers actually accountable. That is probably true except for two things. First, you never know when the blame shift is going to backfire and, when it does, it most likely will hit the client contractor, not the PEO or its insurer (remember, they are really, really good at having it both ways). Second, since this problem will eventually cause workers’ comp rates to go up, the PEO will be able to use this to make even more money off its client contractors and be able to blame it all on the system.
Anna Cam Fentriss is an attorney licensed in Florida since 1988 representing clients with legislative and state agency interests. Cam has represented FRSA since 1993, is an Honorary Member of FRSA, recipient of the FRSA President’s Award and the Campanella Award in 2010.
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