Michael Moline
An appellate court has rejected attempts by Florida’s last-chance workers’ compensation insurer to deny coverage to a company that manages payrolls for “talent” in the movie, television, and radio commercial industries.
The Florida Workers’ Compensation Joint Underwriting Association Inc. had twice sought to deny coverage to American Residuals and Talent Inc., or ART, arguing that the company was a mere payroll service.
The 1st District Court of Appeal, in a unanimous three-judge opinion issued Monday by Judge Thomas Winokur, sided with the Florida Division of Business and Professional Regulation, which had decided that the company was entitled to buy coverage.
The panel rejected the insurer’s argument that that outcome would upend the workers’ compensation market.
“DBPR investigated ART twice and found that ART did not operate as an unlicensed employee leasing company,” Winokur wrote.
“Companies that lease their employees to its clients will still be required to obtain licensure pursuant to Florida law,” he wrote. “In addition, this ruling does not exempt ART from any applicable licensure requirements if it changes its operating practices.”
ART, based in New Hampshire, doesn’t interview, hire, or fire the actors and others it connects with production companies, the court said. However, it pays the talent; makes sure clients obey local and federal labor regulations and union rules; and tracks residual payments owed.
In addition, ART’s contracts with clients hold that it is the “employer of record,” the court said.
“(The insurer’s) argument is not that ART is not an employer, but rather based on the distinction between ‘direct’ and ‘indirect’ employers. This distinction, however, is nowhere to be found in Florida law or, for that matter, (the insurer’s) Operations Manual.”
The court swept aside the insurer’s fears that the outcome could require it to sell to companies that merely process other employers’ payrolls.
“ART does more than just the ministerial function of issuing paychecks to its client’s employees. ART operates as the employer of record for the talent,” Winokur wrote.
“ART assumes an employer’s responsibility of paying talent and ensuring that they are provided with the insurance required under the law of the jurisdiction where they are employed, while its clients handle the creative aspect of interviewing and hiring the right talent for its productions.”
The opinion describes the association as “a self-funding, residual-market insurer created by the Legislature in order to provide workers’ compensation insurance to employers who are statutorily required to maintain such insurance, but who are unable to obtain coverage from private insurers in the voluntary market.”
