Florida Board of Employee Leasing Companies Meeting Report: October 21

On Wednesday, October 21, 2009, the Florida Board of Employee Leasing Companies (“Board”) met to consider employee leasing company applications, controlling person applications, de minimis exemption and registration applications, change of ownership applications, employee leasing company name changes and the termination of employee leasing company operations requests.  To view the complete meeting agenda, click here.

The Board considered the following applications:

Milays Rodriguez, Best Concierge Services, Inc. – controlling person application

The application was approved by a vote of 4-2, with Board Members Celeste Dockery and Deborah Segal voting against it.  This is the first application the Board discussed for which a newly-created certificate of exemption for workers’ compensation was provided for a company officer.  During discussion of this application, the Board debated the legislative intent of a new statute that provides exemptions for workers’ compensation coverage.  Some Board Members asserted that the Florida Legislature did not intend to allow companies to become licensed without being required to provide workers’ compensation coverage for their employees.

A representative from the Florida Division of Workers’ Compensation (“DWC”) stated that the exemption only applies to corporate officers submitting an application for a single exemption.  Best Concierge Services, Inc. currently has no other employees in Florida. 

Ms. Rodriguez expressed her intention to fully comply with the law as soon as she hires employees, as well as her intent to procure a master policy to cover all future employees.  She stated that she has contacted workers’ compensation carriers for coverage, but was advised that a policy could not be written because she has no employees.

The Board expressed concern that a loophole has been created by the new exemption statute that would permit fraud, because a license may be granted with no proof that a company has workers’ compensation coverage or intention to secure it. The Board was concerned that there may be an increase in this type of application and that fraud would not be detected until a company filed its quarterly reports.  In the case of any exceptions, the Board members stated that it would be preferable to have these types of applicants provide a letter stating that they will procure workers’ compensation coverage as soon as they have employees on their payroll.

Discussion continued regarding the Board’s jurisdiction in this matter, the intent of the Legislature and the perceived loophole in the existing law.

FrankCrum 6, Inc. – employee leasing company application

This application was approved unanimously with little discussion.

Antonio Grijalva and John W. Allen, G&A Outsourcing, Inc. – controlling person application

This application was approved by a vote of 4-2, with Board Members Celeste Dockery and Deborah Segal voting against it after the following discussion:  A DWC representative stated that G&A Outsourcing, Inc. received a stop-work order in 2006 for failing to have workers’ compensation coverage, but has since been released from the order and continues to submit its fine payments on time. A representative for G&A Outsourcing, which is based in Texas, clarified the issue by stating that a company with which it had contracted sent employees to work in Florida without its knowledge, and that those employees had workers’ compensation coverage in Texas. G&A Outsourcing does not currently have coverage in Florida and is having difficulty securing coverage through the Florida Workers’ Compensation Joint Underwriting Association because the company does not have a physical address in Florida. G&A Outsourcing’s national policy underwriter, AmTrust, is reviewing whether it can provide Florida coverage.

Harry Hedaya, Receivables Management Acceptance Corporation – controlling person application

The application ultimately was approved by a vote of 4-2, with Celeste Dockery and Deborah Segal voting against it.  Discussion centered on a Chapter 11 bankruptcy previously filed by Mr. Hedaya.  The bankruptcy was a non-monetary default filed to allow for completion of an office building in Tampa.  During the bankruptcy, Mr. Hedaya never defaulted on his loan payments and had cash on hand.  No creditors suffered as result of the bankruptcy.  Mr. Hedaya provided a certificate of exemption for workers’ compensation as part of his application because he has no employees, but stated that he can provide a promise of coverage if required. 

STS Management Services of Florida, Inc. d/b/a Modern Business Associates X – employee leasing company application

This application was approved unanimously with little discussion.  Board member Marjorie Seltzer abstained from voting, because she serves as a controlling person for Modern Business Associates X.

Jeffrey J. Jensen, United Group Service Centers, Inc. – controlling person application

This application was tabled at the September Board meeting to allow the Board time to research whether the company needs a license. The company was sent a letter by the Florida Department of Revenue (“DOR”) regarding unemployment taxes, which United Group Service Centers currently is paying through its parent company.  During discussion, it was determined that since United Group Service Centers only leases employees to other companies under the same ownership and does not hold itself out to the public as an employee leasing company, the company would be exempt from separate tax filing under the Florida Tax Code.  The Board decided to send a letter to the DOR stating that the company falls within the Tax Code’s exception and table further discussion of the application until the Board’s next meeting.

Timothy Lee Russell, TLR of Bonita, Inc. d/b/a enterprise HR – controlling person application

The Board approved this application unanimously after discussion regarding Mr. Russell’s having been questioned by the police about a company he previously worked for that was under investigation for fraud. No charges were filed against Mr. Russell.

Additional actions:

• The de minimis exemption and registration applications for Merit Resources, Inc. and Merit Resources II, Inc. were approved with little discussion.
• The change of ownership applications for Global Employment Solutions PEO I-VI, Inc. were approved with no discussion.
• The employee leasing company name change applications for Employ America, I-IV, Inc. to Certigy I-IV, Inc. and from Certigy I-IV, Inc. to Certistaff I-IV, Inc. were unanimously approved after it was clarified that the Employ America companies changed their names to Certigy in July 2009 and then to Certistaff.
• The employee leasing company name change applications for National HR Advantage, Inc. to Oasis Outsourcing HR d/b/a/ Oasis Outsourcing and Waterstone Group Employment Administration Services, LLC to Waterstone HR, LLC were approved with no discussion.
• The termination of employee leasing company operations request for Modern Business Associates V, Inc. was approved unanimously with little discussion. Board member Marjorie Seltzer abstained from voting, because she serves as a controlling person for Modern Business Associates X.

An inquiry was raised regarding whether pending or prior complaints may be discussed in considering a company’s termination of operations request during a public meeting, since that information is not in the public record.  Board members questioned how they would be able to make an informed decision if that information cannot be divulged during a public meeting.  It was decided that the issue will be discussed at a later date.

No reports from the Florida Office of the Attorney General, Office of the General Counsel, Executive Director or Chairperson were given.

The time for the next Board meeting was changed and now will be held on November 17, 2009 from 11 a.m. through 5:00 p.m. in Saint Augustine, Florida.

The December meeting date was rescheduled and now will be held via teleconference on December 23, 2009.

The meeting was then adjourned. 

 

Should you have any questions or comments, please contact Colodny Fass.

 

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