FAPEO SB 1718 PEO ISSUE TRACKER
IMPORTANT NOTICE
Revision date August 25, 2023. Copyright Florida Association of Professional Employer Organizations (FAPEO). THIS INFORMATION IS PROVIDED FOR GENERAL INFORMATIONAL PURPOSES AND IS NOT TO BE RELIED ON AS LEGAL OR OTHER PROFESSIONAL ADVICE. THIS INFORMATION IS SUBJECT TO CHANGE AND MAY NOT REPRESENT COMPLETE, DEFINITIVE, OR CURRENT INTERPRETATIONS OF LAW.
|
Issue |
Notes |
25 employee threshold filling a “permanent position” |
|
ELC/client responsibility |
|
| What constitutes an “understanding” (as opposed to a written agreement) to transfer responsibility for verification and certification of employment eligibility to an ELC client? | The Florida Department of Revenue (“FDOR”) states responsibility can be transferred ” . . . only by written agreement or written understanding. If this occurs, the ELC will continue to file reports with the Department [of Revenue], and the client company will be required to certify use of E-Verify.” FDOR TIP No. 2373B-01 June 15, 2023.
A representative of FDOR is greatly concerned that when his auditors are out in the field auditing PEO client companies, that some clients will assert they never received the “written understanding.” He felt that if such an assertion is made, that the burden to establish the existence of a “written understanding” would be placed upon the PEO. Our General Counsel and the FDOR representative talked about emails with read receipts and other methods of establishing that a “written understanding” exists. While they did not discuss certified mail, hand delivery, or other methods establishing that a written understanding exists, FDOR was noncommittal regarding what would satisfy the State as to the existence of a “written understanding.” FDOR informal discussion with FAPEO General Counsel, June 2023. [Florida Department of Economic Opportunity (renamed Florida Department of Commerce] also asserted that both the agreement and the understanding need to be in writing. DEO said they would not weigh in on how a written understanding could be established. Should an issue arise as to whether an understanding exists, providing to DEO the numerous ways that the PEO endeavored to reach an understanding would be meaningful to DEO. DEO informal discussion with FAPEO General Counsel, June 2023. |
Tax certification |
|
| Where an ELC client is responsible for certification, how does it certify? | Client companies required to certify use of E-Verify may complete this step on an Employer E-Verify Certification (Form RT-E Verify) or Correction to Employer’s Quarterly or Annual Domestic Report (Form RT-8A). Employers can certify in a variety of ways. PEO client companies that wish to use the RT-8A must have an active reemployment tax registration with the FDOR and are required to file an Employer’s Quarterly Report (Form RT-6). FDOR TIP No. 2373B-01 June 15, 2023.The FDOR recognizes the concerns of the PEO industry regarding not supplying the PEO’s unemployment account number to its clients and the FDOR has not required the PEO’s unemployment account number to be included on the RT-E Verify form. |
| If there is a written agreement or understanding that an ELC client is responsible for compliance with E-Verify obligations, can a PEO that signs a MOU to serve as an agent of the client for E-Verify purposes, submit the required certification to the FDOR or must the client submit the certification? | A from FDOR: Based on my interpretation [of] the law, the ELC has the primary obligation to certify use of the E-Verify system on the first return filed in a calendar year. It’s only in the case where a written agreement [or understanding] states otherwise would the client company be responsible for certifying use of the system. In other words, in the absence of the written [agreement or] understanding, the ELC must certify. If there is a written [agreement or] understanding which designates client certification, the client must certify. The law does not address alternative certification arrangements for ELCs/clients based on who has been designated to use the E-Verify system. |
| Is a certification required in 2023? | See the following July 2023 email exchange between FAPEO General Counsel and the FDOR.
Q: So if a PEO client was contracted with the PEO during the 1st quarter of 2023 and the PEO made a tax filing encompassing the client’s employees, the client would not make its own tax filing until its first tax filing of 2024, even if it hires employees after July 1, 2023. A: In my opinion, based on your scenario below, an employer with 25 or more employees will need to use E-Verify after 07/01 but they will not need to certify until 2024. This assumes the PEO already filed the first quarter RT return for 2023. Please note a binding opinion would need to come from the Department of Commerce. |
| Is an employer required to use the E-Verify system for new employees who were hired prior to July 1, 2023? | No. Section 448.095, Florida Statutes, only applies to new employees hired on or after July 1, 2023. |
| Is an employer required to certify the employment eligibility of Florida and non-Florida employees? | Section 448.095, Florida Statutes, requires that public agencies and private employers with 25 or more employees performing services in Florida must certify the eligibility of their employees performing services in Florida. FDOR New Employee Eligibility and E-Verify FAQs, June 2023 (note DEO informal discussion with FAPEO General Counsel, June 2023 – DEO may not agree with this FAQ). |
| Is an employer required to use the E-Verify system to verify employment if it employs fewer than 25 employees during part of the calendar year and 25 or more employees during the other part of the calendar year? | A private employer must verify its new employee’s employment eligibility using E-Verify if that new employee will be the 25th or greater employee performing services in Florida at the time of the new employee’s employment verification. FDOR New Employee Eligibility and E-Verify FAQs, June 2023. |
| Should an employer include employees of related companies toward its total count of employees when determining if it is required to use the E-Verify syst | No, only include employees who are preforming [sic] services for the private employer, unless the private employer is an authorized common paymaster. If the private employer is an authorized common paymaster for related companies, the common paymaster should count all employees for which it performs common paymaster duties as well as its own employees. FDOR New Employee Eligibility and E-Verify FAQs, June 2023. |
| If a private employer has 25 or more employees in a calendar year but has fewer than 25 employees in the following year, is the private employer still required to use the E-Verify system? | No, a private employer is not required to use the E-Verify system if it has fewer than 25 employees in the following calendar year. FDOR New Employee Eligibility and E-Verify FAQs, June 2023. |
| Will the Department process an employer’s reemployment tax return if the certification field is left blank? | Yes. However, public agencies, and private employers with 25 or more employees, who do not certify are subject to sanctions by the Florida Department of Commerce for failure to comply with section 448.095, Florida Statutes. FDOR New Employee Eligibility and E-Verify FAQs, June 2023. |
| An employer forgot to certify use of the E-Verify system on their first Florida reemployment tax return filed in a calendar year. How can they resubmit certification? | The employer may certify use of the E-Verify system on a Correction to Employer’s Quarterly or Annual Domestic Report (Form RT-8A). FDOR New Employee Eligibility and E-Verify FAQs, June 2023. |
| Who is authorized to certify use of the E-Verify system if someone other than the owner submits the reemployment tax report? | The individual owner, corporate president, treasurer, or other principal officer, or a partner or member/managing member should certify use of the E-Verify system. FDOR New Employee Eligibility and E-Verify FAQs, June 2023. |
| Can an agent or management company certify use of the E-Verify system on behalf of the client company? | No, these entities do not have the statutory authority to certify use of the E-Verify system on behalf of an employer. These entities will continue to file reemployment assistance reports with the Department on behalf of the employer, and the employer will separately certify use of E-Verify by filing a Correction to Employer’s Quarterly or Annual Domestic Report (Form RT-8A) or by using the Employer E-Verify Certification form. FDOR New Employee Eligibility and E-Verify FAQs, June 2023. |
| An employer files quarterly reports. When reporting on the first return in a calendar year, does this mean the December return filed in January of a calendar year, or the March return (first quarter) filed in April? | The law requires that the employer must certify use of the E-Verify system on its first return each calendar year. The first return (report) each calendar year is due in January for quarterly filers, so the certification would occur on the employer’s fourth-quarter report since this is the first return filed in a calendar year. FDOR New Employee Eligibility and E-Verify FAQs, June 2023. |
| What responsibility does an employee leasing company (ELC) have in certifying eligibility of a new employee for a client company? | An employee leasing company (ELC) is responsible for certifying the employment eligibility of any new employee of a client company that meets the definition of a private employer with 25 or more employees or is a public agency. Responsibility for verification and certification of employment eligibility using E-Verify may be transferred from the ELC to the client company only by written agreement or written understanding. If this occurs, the ELC will continue to file reports with the Department, and the client company will be required to certify use of the E-Verify system. FDOR New Employee Eligibility and E-Verify FAQs, June 2023. |
| If an employer or an authorized agent filed the employer’s first quarter of 2023 reemployment tax return, does the employer still need to certify use of the E-Verify system during the 2023 calendar year? | No, the employer will not need to certify use of the E-Verify system until its first report of calendar year 2024. FDOR New Employee Eligibility and E-Verify FAQs, June 2023. |
| Can a professional employer organization (PEO) certify use of the E-Verify system on behalf of a client company? | The Department [of Revenue] does not distinguish between professional employer organizations (PEOs) and employee leasing companies (ELCs) and refers to them generally as PEOs since that is the more commonly used name. FDOR New Employee Eligibility and E-Verify FAQs, June 2023. |
| Is an employer required to certify use of the E-Verify system if it is a private employer with 25 or more employees, it certified use of the E-Verify system in the previous calendar year, and it has not hired any new employees in the current calendar year? | Yes. After July 1, 2023, each public agency and private employer required to use E-Verify must certify use of the E-Verify system on its first Florida reemployment tax return filed each calendar year. FDOR New Employee Eligibility and E-Verify FAQs, June 2023. |
Public agencies |
|
| When an ELC contracts with a public agency and is considered a contractor, does the ELC have to use E-Verify for the agency’s worksite employees? | Contractors who contract with public agencies are required to utilize the E-Verify system. If a PEO is deemed to be a contractor, our General Counsel asserted that since the public agency would be a client company of a PEO, it should still be able to transfer responsibility to E-Verify employees to the public agency. While the representative of DEO seemed receptive to our General Counsel’s assertion that the PEO would not be obligated to E-Verify the public agency’s employees and that this obligation could be placed upon the public agency, this is not a question that has been clearly resolved. DEO informal discussion with FAPEO General Counsel, June 2023. |