I don’t have an update on First DCA cases today, but I did have a recent research project on Professional Employment Organizations (PEO’s) that I thought I would share with you.

For many of us in the industry, PEO’s are an evolutionary step towards spreading risk of Workers’ Compensation claims.  Besides handling payroll for employers, PEO’s provide W/C insurance for many small businesses, offering them lower premiums than they would find individually.   But its important for PEO’s and employers who contract with PEO’s that any change in coverage, even termination of coverage, requires proper notice to employees.

Section 468.525(4)(f) requires PEO’s to notify all employees in writing of any changes–particularly termination–in their relationship with the employee.  When a PEO’s contract expires with an Employer, or if a provision in the contract calls for termination, it is so important for a PEO to provide written notification.

Case in point: Blue Stone Real Estate v. Ward, where the PEO terminated their relationship with the Employer, but only provided written notice to the client, not to Claimant.  The First DCA found this unacceptable and found that under s. 440.10(1)(b) the PEO was the statutory employer of Claimant.  I’ve seen situations like this where a Carrier failed to notice cancellation of a policy and nothing can be worse than finding out you owe benefits to a Claimant where all along you believed there was no coverage.  There are no reserves or preparing for a situation like this. 

Furthermore, the Court emphasized that a PEO must notify each employee, individually.  Merely letting the Employer know in a certified letter is not enough.  For PEO’s, having a system in place to notice employees of any changes in your service is vital towards your existence.  Be sure that this system is adequate in establishing an evidentiary chain of notice.