When it comes to independent contractor classification, human resources professionals can often feel no good deed goes unpunished. While (depending on context and location) there are a variety of tests for independent contractor status, as a general rule the more perks and benefits provided by a company, the more likely it is the individual will be deemed a bona fide employee and not a true independent contractor.
Florida SB 542, which was signed by Governor DeSantis last month and will go into effect on July 1, 2022, provides well-intentioned businesses in the Sunshine State with some relief. This new law shields businesses from misclassification claims when providing assistance to "engaged individuals" during declared emergencies. An "engaged individual" is defined as anyone "who provides a good or service to a business or on behalf of a business and who is remunerated for the good or service, regardless of the individual's classification as an employee or independent contractor."
During the Covid-19 pandemic, many businesses wanted to provide support to non-payroll workers such as independent contractors, gig workers, and freelancers but did not do so, as they feared the relationship would then be misclassified as an employee-employer relationship. The types of aid businesses wanted to provide varied; however, simple actions such as providing protective equipment or medical supplies were often avoided due to misclassification concerns. Companies feared that by providing this assistance they would be deemed employers of said individuals and thus subject to overtime wages, workers' compensation benefits, and other benefits that were not owed to non-payroll workers, as well as penalties for not properly classifying individuals.
The new law will protect businesses during public health emergencies declared by a state health official or state of emergency declared by the governor. Businesses will be able to provide financial assistance, provide benefits related to the health and safety of individuals, provide training or information related to the health and safety of individuals, or take other actions intended to protect public health and safety. These actions cannot be used against the businesses in certain civil causes of action under Florida law, such as those to recover lost wages, employment benefits, or other compensation due to a misclassification of the individual.
While the new statute only applies to lawsuits brought under Florida law (and does not apply to federal lawsuits or other actions), Florida businesses now have one less thing to worry about when providing assistance during times of crisis.
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