Florida is suffering from a shortage of skilled trades to use for your construction job. As this shortage continues, subcontractors are having to find different ways to supply employees. You as the GC should know that there is an exposure to your worker's compensation policy or to your individual pocket if you do not have a worker’s compensation policy.
Your subcontractor is required to provide workers compensation coverage for all workers on your job site. If a Subcontractor’s worker is injured and not covered under the subcontractor’s work comp, your company will be liable for workers compensation benefits to the injured individual. This will lead to significantly higher workers comp costs for you as the general contractor. When you accept a work comp certificate from a subcontractor who uses a (PEO Professional Employer Organization, Southeast or Frank Crum as common examples), it only provides coverage to those employees whose payroll is reported and then processed by the PEO. The problem arises when you do not know if the workers your sub brings on to your job site are covered under his PEO certificate or not.
We recommend you take the following steps to avoid uninsured workers on your job site.
- Determine if the Contractor has leased If you are going to accept a certificate from a leasing company, verify that the Owner is covered for Workers Compensation through the leasing company. You can verify this by requesting a copy of his latest PEO billing statement showing his name included under payroll. If not, make sure that the Owner complies with the exemption requirements of the Florida Statute.
- For all Contractors with leased employees, regular contact should be made with the leasing company to determine the identity of the leased employees. Random checks should be made of those Contractors using leased employees by you or your personnel to determine that the people on the construction site are in fact from the leasing company. Only those employees leased are covered by the leasing company’s worker’s compensation insurance. If you find uncovered workers on the site, the Contractor should be immediately dismissed from the worksite.
- Have all subcontractors sign the affidavit below representing that all employees on your job sites are covered under their employee leasing workers compensation policy.
Several contractors that I know have been caught under this loophole for the sub. Claims of $70,000 to several hundred thousand dollars have been claimed against their worker's compensation policies. Don’t let it be you. Use the Worker’s Compensation Employee Leasing Affidavit attached to prevent this exposure to your business.
Worker’s Compensation Employee Leasing Affidavit.pdf
