Starting on October 1st, 2021, Florida employers must report information concerning all contractors for which they pay $600 in a calendar year or more. This report will be submitted to the Florida Department of Revenue and contain the information employers are already familiar with providing for new hires. This must be submitted on the earlier date of either within 20 days of a business’s first payment to the contractor or on the date that the employer and the contractor enter into the agreement. This is a large change for Florida businesses that previously did not face mandatory reporting for independent contractors at all.
This law was provided for in Senate Bill 1532, which was signed into law by the Governor of Florida Ron Desantis on June 16th, 2021. This law will go into effect on October 1st, 2021, and amend Florida Statute Section 409.2576, which concerns Florida’s State Directory of New Hires. This amendment will now require all “service recipients” that pay $600 or more to individuals who are not under their employ, i.e., independent contractors, to submit a report containing information about the contractor to the state’s Directory of New Hires.
Under the previous law, any service recipient was only required to make this report for employees and left it to the employer’s discretion whether or not to make such a report for any independent contractors. The standard for a service recipient is provided for in this new law, and it is defined as any person who is engaged in any trade or business that pays any other person for services in the course of the aforesaid trade or business. This is clearly a quite broad standard and, if desired, could clearly extend beyond traditional formal businesses.
The report that must be submitted for each independent contractor paid $600 or more must include the contractor’s said name, address, the initial date on which the services were performed, and either their Social Security Number or any other identification number as provided by Internal Revenue Code Section 6109. It must also contain information pertaining to the service recipient, including name, address, and Employer Identification Number commonly known as an EIN.
As this new law draws closer to entering into effect, it should serve as a reminder to employers to review their current relationships with independent contractors in order to ensure compliance. Additionally, as this new law will provide the state with considerably more information regarding independent contractors, now would be a good time to review worker classifications to ensure that all workers are classified properly.