Employee Leasing Arrangements
An Employee Leasing Company (also known as a PEO or labor contractor) seeking to obtain workers compensation benefits for leased workers through the FWCJUA shall secure the coverage for the leased workers on a multiple coordinated policy basis (MCP). An MCP basis is a form of policy issuance used to provide workers' compensation and employer's liability insurance for the leased workers of a PEO. Under the MCP basis, policy issuance will be as follows:
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The Employee Leasing Company will have its own standard policy covering only its direct workers.
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Each client also has its own standard policy covering its leased workers.
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Endorsements are used to coordinate coverage between the client and the Employee Leasing Company in accordance with FWCJUA rules.
An Employer, who is a client in an employee leasing arrangement that secures coverage directly through the FWCJUA shall be required to cover any and all of its leased workers on the FWCJUA policy and shall be responsible for paying premium to the FWCJUA that includes any and all of its leased workers' payroll in addition to its direct employees (non-leased workers), regardless of whether the labor contractor provides workers' compensation and employer's liability insurance for any or all of the leased workers.
An Employer who is a client in an employee leasing arrangement that secures coverage through the FWCJUA on a multiple coordinated policy basis in coordination with a labor contractor shall maintain all of the leased workers on its FWCJUA policy. Direct employees (non-leased workers) of the client shall not be included on the FWCJUA policy issued on a multiple coordinated policy basis. The client may secure FWCJUA coverage for its direct employees (non-leased workers) under separate application to the FWCJUA; however, such coverage is only available through the FWCJUA while the Employer's multiple coordinated policy issued through the FWCJUA covering the leased workers is in force without a notice of cancellation.
An Employer who is a labor contractor that secures coverage through the FWCJUA shall be required to cover any and all of its direct employees and any and all of its leased workers on a multiple coordinated policy basis.
The labor contractor, when feasible, shall notify the FWCJUA of intent to terminate any client relationship prior to the termination of an employee leasing arrangement with a client during the policy term or at policy expiration date. When prior notice is not feasible, the labor contractor shall notify the FWCJUA within 5 working days following actual termination.
The multiple coordinated policy is an assessable policy issued under Tier 3. If the FWCJUA is unable to pay its obligations, the policyholders in Tier 3 will be required to contribute on a pro rata premium basis the money necessary to meet any assessment levied. The labor contractor and client are jointly liable under the multiple coordinated policy on a pro rata basis for that portion of the total assessment which corresponds to the earned premiums attributed to the client's leased workers, the client will be required to pay such assessment directly to the FWCJUA without regard to whether the client has made any payments to the labor contractor.
By the way, the FWCJUA will issue an "if any" policy for an eligible Employer who leases all of its employees only if the Employer's employee leasing company is also insured by the FWCJUA. If the Employer's leasing company is not insured by the FWCJUA, the FWCJUA will not issue the Employer an "if any" policy.
For further details regarding Employee Leasing and/or PEO Arrangements, please refer to the FWCJUA Operations Manual, Part Six - Coverage and Rating Rules and Procedures section.
For more information, contact our Underwriting Department at 941-378-7400 or e-mail underwriting@fwcjua.com. |