WORKERS= COMPENSATION: EXEMPTION FROM COVERAGE REQUIREMENTS

Community associations often hire workers considered to be independent contractors. Can you avoid obtaining workers= compensation coverage for these workers? You can, but if it is not done right, there may be hefty back charges to contend with.

Recently, a Florida appellate court determined that an employer did not submit enough evidence to establish that workers hired as Aindependent contractors@ were actually exempt under the Workers= Compensation Law. In Florida Department of Financial Services v. MJ Versaggi Trust, 32 Fla. L. Weekly D676 (Fla. 2^nd DCA, March 9, 2007), the MJ Versaggi Trust began refurbishing an apartment building in 1997. Although the Trust obtained workers= compensation coverage for its employees, the Trust did not pay premiums for two men it hired to work on the project who the Trust considered to be independent contractors.

After the insurer became insolvent and went into receivership, the Florida Department of Financial Services, as receiver for the insurer, determined that the two workers should have been treated as employees and not as independent contractors. The Department sued the Trust for the additional premium due for the two workers.

The Trust asserted that the workers were independent contractors; thus, the Trust claimed that the Trust did not have to provide workers= compensation coverage for the workers. When the workers were hired, the workers completed forms entitled AConstruction Industry Certificate of Election to Be Exempt From The Florida Workers= Compensation Law.@ The trial court agreed the workers were exempt from coverage requirements and granted judgment to the Trust.

The Florida appellate court found that the evidence was not sufficient to prove that the two workers were actually independent contractors. The appellate court pointed out that Section 440.05, Florida Statutes provides that notice of election must be mailed to the Division of Workers= Compensation. The Division of Workers= Compensation issues a certification of the election after it determines that the statutory requirements are met.

The forms submitted by the two workers contain a box to be filled out by the Division of Workers= Compensation. The court noted that the forms submitted into evidence by the Trust were not completed by the Division of Workers= Compensation. The court further noted the Trust did not submit any additional evidence that the forms were in fact mailed to and received by the Division of Workers= Compensation. Even though the two workers swore that they met the independent contractor definition, the court determined that their affidavits were not legally sufficient to exempt them from the definition of an employee for workers= compensation purposes.

This case points out the importance of Florida employers and associations strictly complying with the Florida Workers= Compensation statute if you are treating workers as independent contractors and not obtaining workers= compensation coverage for the workers. Remember, you must seek and obtain a valid certificate of exemption from the Florida Division of Workers= Compensation. The forms must be properly completed. It is also important to monitor contractors to make sure they are complying with the statute. Otherwise, the back charges may be hefty.

SPRINKLERS: WHO IS EXEMPT?

As you may recall, several years ago the Florida legislature enacted legislation requiring residential condominiums to install fire sprinkler systems in the common areas. The law provides a few exemptions as noted in a recent Attorney General=s Opinion.

Section 718.112(2)(l), Florida Statutes provides that a condominium is not obligated to retrofit the common elements or units of a residential condominium with a fire sprinkler system if the unit owners have voted to forego such retrofitting by the affirmative vote of two-thirds of all voting interests. This exemption does not apply to residential >high-rise@ buildings, defined as being greater than 75 feet in height.

The exemption for retrofitting condominiums with fire sprinkler systems in Section 718.112(2)(1), Florida Statutes applies to residential condominium units located in a mixed-use high rise building, according to Florida Attorney General=s Opinion 2007-03. However, the exemption does not alter the firesafety code requirements for commercial or industrial condominium units.

For those buildings which are required to have fire sprinkler systems, the retrofitting of the common areas with a sprinkler system must be completed before the end of 2014.

This information is provided for general information purposes only, may no be relied upon and is provided without obligation or fee. It is distributed to the firm's association clients to provide a general comment of recent legal changes. This information is not legal advice, representation counsel or opinion. The changes in the law may not have been reviewed by Florida courts and may be subject to further challenge. Before taking any action you are urged to consult with counsel to ensure that your legal rights are protected.

8 2007 by Gelfand & Arpe, P.A.