November 3, 2003
Source: Department of Financial Services
The Florida Legislature has passed legislation to assist you in complying with workers’ compensation exemption law changes passed earlier this year that become effective January 1, 2004. On October 24, 2003, the Florida Legislature passed a bill that provides a new option for qualifying as a "corporate officer" for purposes of maintaining your workers' compensation construction exemption and affects the timeframe for meeting construction-licensing requirements at the Department of Business and Professional Regulation. This measure will become law when signed by the Governor. The purpose of this communication is to inform you of these legislative changes and explain how these new provisions impact the information previously provided to you by the Department of Financial Services in the September 25, 2003, letter to construction industry exemption holders entitled "IMPORTANT NOTICE TO CONSTRUCTION INDUSTRY EXEMPTION HOLDERS."
What does the legislation passed on October 24, 2003 do?
Construction Exemptions -- You can qualify as "corporate officer" for maintaining your workers' compensation exemption by being a member of a limited liability company (LLC) who owns at least 10% of the company. UNDER THIS NEW OPTION, YOU DO NOT HAVE TO INCORPORATE YOUR BUSINESS IN ORDER TO MAINTAIN YOUR EXEMPTION.
Construction-Licensing -- If you are a licensed contractor under chapter 489, Florida Statutes, and you form a corporation to become eligible for a workers’ compensation exemption, you are not required to obtain approval for a change of status under section 489.115, Florida Statutes, and are not required to obtain a qualified business organization license or certificate of authority, under section 489.119 or section 489.521, Florida Statutes, for the new corporation from the Department of Business and Professional Regulation until July 1, 2004. UNDER THIS PROVISION, BUILDING PERMITS MAY NOT BE DENIED SOLELY BECAUSE A CHANGE IN STATUS, A QUALIFIED BUSINESS LICENSE OR A CERTIFICATE OF AUTHORITY IS NOT APPROVED BEFORE JULY 1, 2004.
With the legislative change of October 24, 2003, what must I do to have a valid construction industry exemption on January 1, 2004?
Passage of the new legislation did NOT affect the date that current construction exemptions will become invalid. Your exemption will be NOT be valid on or after January 1, 2004, unless you submit a completed "Application for Re-issuance of Notice of Election to be Exempt" to the Division of Workers’ Compensation.
How should I proceed if I want to continue to be exempt?
If you have already filed for a re-issuance of your exemption as a “corporate officer” of a corporation:
No further action on your part is necessary if your application was complete and in order.
However, if you prefer to operate as an LLC instead of a corporation, you can still choose the LLC option. Just withdraw your current application for re-issuance and submit a new one as a “corporate officer” using the LLC option.
If you have NOT yet filed for a re-issuance of your exemption:
You may file for a re-issuance of your exemption under EITHER OF THE FOLLOWING OPTIONS:
1. Incorporate your business; become an officer of the corporation and own at least 10% of the stock of the corporation; and file the "Application for Re-Issuance of Notice of Election to Be Exempt", along with all required information.
2. Convert your business to an LLC, approved under Chapter 608; become a member of the LLC and own at least 10% of the LLC; and file the "Application for Re-Issuance of Notice of Election to Be Exempt", along with all required information.
If I use the LLC option, how do I complete and file the “Application for Re-Issuance of Notice of Election to be Exempt”?
If you are applying for exemption re-issuance as a member of a LLC, provide the name of the LLC in Section 2, “Corporate Information” of the “Application for Re-issuance of Notice of Election to Be Exempt” along with the LLC registration number and FEIN. For Section 5, "Documentation Required To Be Attached To This Application", you must submit with your completed application a separate signed statement affirming that you own at least 10% of the LLC. Otherwise, the instructions are the same whether your business is a corporation or LLC.
How do I identify my licensure status on the "Application for Re-Issuance of Notice of Election to be Exempt" if my updated license will not obtained until as late as July 1, 2004?
If you are a contractor licensed under chapter 489, and have incorporated in order to obtain re-issuance of your exemption, and have applied to the Department of Business and Professional Regulation for a change of status for your license, you should put "Pending" in Section 3, "Licenses" of the "Application for Re-issuance of Notice of Election to Be Exempt".
How do I obtain an "Application for Re-Issuance of Notice of Election to be Exempt"?
An "Application for Re-issuance of Notice of Election to Be Exempt" was enclosed with the September 25, 2003, "Important Notice" that was mailed to you. If you do not currently have a copy of the application form, you can obtain it by calling the Bureau of Compliance toll-free at (800) 742-2214 or by accessing the form at www.fldfs.com/wc.