Good news is on the horizon for companies that legitimately use independent contractors.  The Florida legislature recently passed a premier law aimed at protecting businesses against misclassification claims when they aid their legitimate independent contractors during declared emergencies. On May 11, 2022, Florida Governor Ron DeSantis signed Senate Bill 542 into law.  The new law holds that certain enumerated actions taken by companies may not be used as evidence against the business to establish the existence of an employer-employee relationship in specified civil causes of action.  The law makes clear that businesses will only receive this special protection during a public health emergency declared by the State Health Officer or a state of emergency declared by the Governor.  The newly enacted law—Fla. Stat. 448.111—will take effect on July 1, 2022. Employers facing misclassification claims should still be sure that their  independent contractors satisfy the other necessary factors to establish independent contractor status. In other words, if a challenge to independent contractor status was already on unsteady ground, this law has no impact other than to help the independent contractor through a difficult financial period during a declared emergency.  

As companies adapted to the requirements of doing business during the COVID-19 pandemic, some were placed in a precarious position when considering how to provide voluntary assistance to independent contractors. Would companies’ actions—such as providing independent contractors with personal protective equipment—unintentionally convert their independent contractor relationships into that of an employment relationships? As such, businesses were reluctant to provide financial resources or benefits related to the health and safety of their independent contractors because of the looming uncertainties. Such well-intentioned actions—as benevolent as they seem— may give rise to misclassification claims of improper employee-employer relationship and create civil liability related to workers’ compensation, retaliatory personnel actions, labor pool violations, devices used in payment for labor, and unclaimed wages. As a general practice, businesses must maintain a degree of separation between its independent contractors to preserve the independent contractor relationship.  Some independent contractors may have tried to claim that providing such assistance was an element of control that could impact the independent contractor relationship.

As of July 1, 2022, Fla. Stat. 448.111 will allow businesses to take the following four actions during a public health emergency or state of emergency without fear of creating liability for misclassification claims:

• Providing financial assistance to previously engaged individuals who are unable to work because of health and safety concerns;
• Directly providing benefits that are related to the health and safety of engaged individuals, including medical or cleaning supplies, personal protective equipment, health checks, or medical testing;
• Providing training or information related to the health and safety of engaged individuals or the public; or
• Taking any action, including action required or suggested by any federal, state, or local law ordinance, order, or directive which is intended to protect public health and safety.

The law defines an “engaged individual” 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.”

As businesses continue to legitimately use independent contractors to perform specified tasks  across a range of occupations and a wide variety of industries, this new law provides assurance during declared states of emergency that providing help to independent contractors won’t lead to liability down the road.