Florida’s Expanded New Hire Employee and Contractor Reporting Requirements Takes Effect October 1, 2021

Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

A recent amendment to child support laws will impose new and potentially onerous requirements on Florida businesses, starting October 1, 2021. The new law removes the current 250-employee threshold for new hire reporting, and, for the first time, requires businesses to report information regarding certain independent contractors. While the purpose of the statute purports to be straightforward, it leaves many questions regarding how the reported information could be utilized.

In June 2021, Governor Ron DeSantis signed legislation that expands Fla. Stat. § 409.2576, which sets forth requirements for employers to report new hires and rehires to the State Directory of New Hires. The purpose of this statute is to provide information to the Florida Child Support Program in order to facilitate the collection and disbursement of child support payments and to monitor and enforce child support benefits, namely through the issuance of income deduction orders. The information is also available to other government agencies responsible for determining various benefit programs.

Under state and federal laws, employers with 250 or more employees were already required to report newly hired employees and rehired employees to the State Directory of New Hires within 20 days of hire. The amendment does two things. First, it expands the reporting requirements to all businesses, regardless of the number of employees. The reporting requirements extend to any entity that is a “service recipient,” defined as “a person engaged in a trade or business who pays an individual for services rendered in the course of such trade or business.” Independent contractors who are paid, or will be paid, $600 or more during a calendar year must be included. Second, it requires employers to report information regarding independent contractors, with the exception of contractors employed by federal or state agencies that perform intelligence or counterintelligence functions. Interestingly, the reporting form asks whether medical insurance will be available to the worker.

Because the number of lawsuits and government audits due to the alleged misclassification of employees as independent contractors has continued to rise in recent years, some businesses may be concerned about having to report independent contractor data to the government. Further, the statute specifies that the reported information may be shared with government contractors that use the data “to locate individuals for the purposes of establishing paternity and establishing, modifying, and enforcing support obligations,” but it does not specifically identify those entities or impose limitations regarding their use of new hire information, other than by stating that such entities “must comply with privacy safeguards.”

The statute is silent as to penalties for failures to report.

While the ultimate impact on employers remains to be seen, covered businesses might want to take certain steps to ensure compliance before October 1, 2021. These steps may include training human resources personnel and/or hiring staff regarding the new law and working with any external payroll vendors to adjust reporting procedures. Businesses might also consider conducting internal audits of any independent contractor arrangements to determine whether they must be reported and verifying that the classifications are appropriate under applicable law.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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