By: Richard E. Guttentag, Esq., Stearns, Roberts & Guttentag, LLC

Any contractor or subcontractor who engages in public or private construction in the state of Florida is required to secure and maintain workers’ compensation for its employees. The liability imposed on employers by Florida’s Workers’ Compensation Law is to only secure workers’ compensation insurance coverage.  The case of VMS, Inc. v. Alfonso, 2014 WL 4723565 (Fla. 3d DCA September 24, 2014) analyzed the employer’s liability to secure workers’ compensation under Florida law.

In VMS, Inc., a general contractor (“Contractor”) entered into a subcontract with a Subcontractor to perform certain road work.  The Subcontractor hired a Sub-subcontractor to perform some of the road work that the Subcontractor agreed to perform.  While performing the road work, one of the Sub-subcontractor’s employees (Employee) was injured. Although the Contractor and Subcontractor both carried workers’ compensation insurance, neither reported the incident to their compensation carriers, and the Employee never asserted a claim for workers’ compensation benefits. Instead, the Employee filed suit against the Contractor for negligence alleging that the Contractor had waived workers’ compensation immunity and was subject to the negligence suit due to the Contractor’s failure to report the incident to its carrier.  The trial court agreed that the Contractor waived its workers’ compensation immunity, and the Contractor appealed.

Under Florida’s workers’ compensation laws, an employer must maintain workers’ compensation insurance for its employees. Florida’s workers’ compensation laws have additional requirements for work performed under a subcontract relationship.  If a contractor subcontracts any work under a contract to a subcontractor, the contractor is deemed to be the “statutory employer” of the subcontractor’s employees.  The liability imposed on employers under the workers’ compensation law is to only secure workers’ compensation insurance coverage, and when an employer subcontracts part of its work, that contractor/employer is liable only for assuring that workers’ compensation coverage has been secured for the subcontractor’s employees.  Accordingly, a contractor is responsible for obtaining compensation insurance that includes coverage for its subcontractors. A contractor can satisfy its obligations as a statutory employer by requiring its subcontractors to maintain compensation coverage for the subcontractor’s employees. Thus, if the contractor maintains compensation coverage for subcontracted employees, or ensures that the subcontractor maintains compensation coverage, the contractor is immune from suit brought by a subcontractor’s employees for workplace injuries.

In this case, it was undisputed that the Contractor secured coverage for the Subcontractor’s employees by virtue of the Subcontractor securing worker’s compensation insurance. Therefore, the Contractor was immune from the Employee’s personal injury lawsuit, and did not become liable to the Employee due to any error that Subcontractor may have made in the reporting or handling of the Employee’s claim. Further, the Contractor had no duty to independently report the incident to its own carrier, nor ensure that actual payment of the workers’ compensation benefits be made to the employee.

This case demonstrates that where a general contractor secures workers compensation coverage, or ensures that the subcontractor secures coverage, the contractor is immune from suit for an employee’s personal injuries or death, and the recovery for injuries or death arising out of the contract work is limited to workers’ compensation benefits.

About the Authors: Richard E. Guttentag is a partner with Stearns, Roberts & Guttentag, LLC, and is Board Certified in Construction Law by the Florida Bar. Mr. Guttentag exclusively in construction law including construction lien claims and defense, payment and performance bond claims and defense, bid protests, construction contract preparation and negotiation, and construction and design defect claims and defense. He can be reached for consultation at [email protected].

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