Owner/Developer Liability for Workers' Compensation Benefits, Statutory Employer and Immunity

Posted in Announcements, Legal Alerts on March 8, 2021

Through our wide range of representing employers we have the experience of dealing with all members of the construction industry.  Oftentimes a subcontractor’s employee is injured on a job and is shocked to find out that their employer did not have proper workers' compensation coverage, either by mistake or intentionally. 

Florida requires everyone involved in the construction industry to have workers’ compensation coverage or a valid exclusion, since 2003.  Many contractors have found that using the services of a PEO (Professional Employer Organization) or leasing company allows them to provide the required coverage for the least expense; however, if they do not properly report employees, this can leave them without coverage.  In Florida, this usually results in the general contractor being liable for the injury and providing workers compensation coverage as the statutory employer. 

It has been explicitly held that the owner/developer of a real estate project is not a general contractor for workers compensation statutory employer purposes.  Since the liability of a statutory employer flows from the act of subletting part of a contact, if there is no contract with a third party, there is no statutory employer status and therefore no liability for providing workers compensation benefits to the employees of other contactors.  Cuero v. Ryland Group, 849 So. 2d 326 (Fla. 2d DCA 2003).  Specifically, the law requires a contract with an outside third party to create statutory employer coverage.  Tampa Elec. Co. v. Gansner, 2D19-3091, 2020 WL 6106089 (Fla. 2d DCA Oct. 16, 2020), Mathis v. Sacred Heart Health Sys., Inc., 187 So. 3d 951 (Fla. 1st DCA 2016), and Slora v. Sun & Fun Fly-In, Inc., 173 So. 3d 1099 (Fla. 2d DCA 2015).    

By sublet, the Legislature essentially meant to “underlet,” and the effect of subletting is to pass on to another an obligation under a contract for which the person so “subletting” is primarily obligated.  Adams Homes of NW Florida, Inc. v. Cranfill, 7 So. 3d 611 (Fla. 5th DCA 2009).  See also Green v. APAC-Florida, Inc., 935 So. 2d 1231 (Fla. 2d DCA 2006) and Heredia v. John Beach & Associates, Inc., 278 So. 3d 194 (Fla. 2d DCA 2019).  

However, in making these determinations, it is important to remember that if the owner/developer does not have to provide workers compensation benefits, they also are not immune from suit.  Therefore we recommend that you discuss your specific set of facts with our attorneys as we have experience in workers compensation, construction law and general civil liability.