Module 2 Chapter 2: Licensing Law Regulation

61G4-17 DISCIPLINARY GUIDELINES .001 .002

.001 = normal penalty ranges .002 = aggravating and mitigating circumstances

61G4-18: CONTINUING EDUCATION .001 .002 .009

.001 = requirements for certificate holders .002= definitions .009 certificates of completion

61G4-16: EXAMINATIONS .001 = .005 =

.001 = written certification examination requirements .005 = duration of validity

61G4-21 CONSTRUCTION INDUSTRIES RECOVERY FUND .003

.003 = filing claims

Subcontractors: independent contractors or employees? NEW IRS Common Law Test: Three main groups with eleven tests to determine the status of an individual as an employee or independent contractor:

1. Behavioral Control 2. Financial 3. Type of Relationship

Licensing requirements: 2 ways to be licensed contractor:

1. Certified = passed a state-administered exam and obtains a sertificate of competency issued by DBPR. Can contract in any city, county, or district in the state where registered. 2. Registered = is any contractor who has registered with the DBPR and has fulfilled the competency requirements in the city, county, or district where the license was issued.

Subcontracting requirements exceptions:

1. Clearing, grubbing, grading, excavation (limited to the lot they are building on.) 2. Wood shingles, wood shakes, asphalt or fiberglass on their new buildings of their own construction. (Can't do this for random jobs) 3. Structural swimming pool work ( for vertical construction such as on the top of a condominium) 4. Construction of main sanitary sewer collection systems, storm collection system, or the water distribution system on new site development. 5. The continuation of utility lines from the mains on mobile home parks

New IRS Common Law Test: Financial Control:

1. Significant investment: an independent contractor often has a significant investment in the equipment or facilities he or she uses in working for someone else. 2. Unreimbursed expenses: ind contractors are more likely to have unreimbursed expenses than are employees. 3. Opportunity for profit or loss 4. Services available to the market: employers should avoid contract language that suggests that the employer is the contractors "primary" client or it is to receive "priority over other clients. 5. Methods of payment: an independent contractor is usually paid a specific fee for the job.

New IRS Common Law Test: Behavioral:

1. Type of Instructions given: If a true independent contractor relationship is desired, a contract should not require a workers presence. Set hours of work indicate the existence of employment relationship. 2. Degree of instruction: the more detailed, the more control 3. Evaluation system: if an evaluation system measures the details of how the work is performed, then these factors would point to an employee. 4. Training: Employer-provided training on how to do a specific job indicates that the employer wants the task completed in a particular way and is evidence that the worker is an employee.

Subcontractors - independent contractors or employees? Types of relationship:

1. Written contracts: although a contract may state that the worker is. An employee or an independent contractor is not sufficient to determine the status. 2. Employee benefits: businesses do not grant these to independent contractors. However the lack of these types of benefits do not indicate that the worker is an independent contractor. 3. Permanency of Relationship: if the employer has the right to fire worker, they are an employee. 4. Services provided as key activity: if a worker provides services that are a key aspect of the business, it is more likely that the business will have the right to direct and control his/her activities.

Continuing Education

14 hours every 2 years

FS 455 DBPR - General requirements Important articles in FS 455:

455.01- definitions 455.02- licensure members of the armed forces in good standing 455.10- restriction on requirement on citizenship 455.203- department: powers and duties 455.207- boards, organization; etc. 455.209- accountability and liability of board members 455.212- education; substituting; etc. 455.2123- continuing education 455.213- general licensing provisions 455.217- examinations 455.2178- continuing education providers Etc.

Financially Responsible Officer (FRO) A business may designate subject to approval from the board a financial responsibly officer $100,000 fidelity bond Assumes personal responsible for: Where a business has an FRO, the Primary QA is only responsible for:

All financial aspects of the business and may not be designated as the primary QA All construction activities (in general and each job)

Penalties for Unlicensed Activity:

Any person who falsely holds himself out to be a licensed contractor or who engages in contracting without first obtaining a license is guilty of a first degree misdemeanor, and a second offense is a third degree felony. In any action against a contractor for injuries sustained resulting from the contractors negligence, malfeasance, or misfeasance, the consumer is entitled to three times the actual damages sustained and costs and attorney's fees if the contractor is neither certified or registered by city or county.

Who needs to be licensed?

Any person who, for compensation undertakes to submit a bud to or does himself or by others construct, repair, alter remodel, add to, demolish, subtract from, or improve any building or structure including related improvements to real estate, for others or for resale must be licensed.

Qualifying agents - General requirements

Application must show the QA is legally qualified and able to act for the business A joint venture must be qualified as a separate and distinct business entity. The qualifying agent must be certified or registered contractor in order to be legally qualified in the category in which the QA is licensed.

FS 455: "Catch all or umbrella statute"

Applies to all boards and disciplines under DBPR authority - If there is no board, then FS 455 would apply unless the board rule is more restrictive - if there is a board, then FS 455 would apply unless the board rule is more restrictive. - FS 455 ties all License disciplines together; *** if a criminal violation by a licensee occurs in one license category, then it would trigger consequences in all license held by that individual.

Ways to avoid having independent contractors treated as employees:

Big list on CM 2-12

Regulation of Contractors in Florida ( CH 489 Florida Statutes): CILB: 2 Divisions:

CILB has two divisions. Division 1: General, Building and Residential Contractors. Division 2: the subcontractors.

Board Rules: 61G4-19:

Citation authority

61G4-19 CITATION AUTHORITY .001

Citations, more like smaller things kinda like traffic tickets.

Financial responsibility requirements to be contractor:

Contractor must have FICO score of 660 or higher. If not, Bond amount of : - $20,000 for Div 1 contractor -$10,000 for Div 2 Contractor.

Subcontractors: independent contractors or employees? A worker is an independent contractor if the employer has the right to?

Control or direct only the result of the work, and not the means and methods of accomplishing the results.

FS 489 - Contractors licensing Law

Created by legislature Board which has 18 members appointed by the governor for 4 year terms. The CILB promulgate rules- specific applications of the law The board rules must be consistent with the statute.

Board Rules: 61G4-17

Disciplinary Guidelines

A Div 1 Contractor shall sub out:

Electrical, Mechanical, Plumbing, Roofing, Sheet metal, Swimming pool, AC work ( there are exemptions though)

Penalties for treating employees as non-employees: According to circular e: If employer did NOT issue required information returns (1099-Misc):

FICA: employer rate 6.2% plus 40% Medicare - Employer rate 1.45% plus 40% of the amount for a total of 2.03% of wages. Income Tax Witholding - 3.0% of wages

Secondary QA: Responsible for: Not responsible for:

Field work (construction meeting code and safety) only where his license was used to pull permit Financial supervision

Licensing Exemptions: 489.103

Find in CM Chapter 2 Licensing Exemptions - any of these exemptions will not count towards work experience when applying for licensure.

Public Liability Insurance: All applicants must submit a signed affidavit attesting they have obtained and will maintain public liability and property damage insurance in the minimum amounts of:

GC's = $300,000 / $50,000 Building Contractors = $300,000 / $50,000 All other categories = $300,000 / $50,000

License number must appear on building permits and Advertisements:

In addition to these documents it must also be included in any text or artwork on the contractors vehicles.

Business records

Keep business records for 3 years (records kept in the regular course of business)

Terms of License:

Licensure as a certified or registered contractor must be renewed every 2 years.

Penalties for treating employees as non-employees: According to Circular E: If the employer issued required information returns (1099-Misc):

Social Security = Employer rate 6.2% plus 20% Medicare = Employer rate 1.45% plus 20% of the amount for a total of 1.74% of wages Income tax witholding = 1.5% of wages.

Safe Harbor Exemption for Certain Companies:

Sort of a grandfather clause is available only if: 1. Consistently treated workers as independent contractors 2. The hiring company has filed all required IRS forms relating to such workers 3. The hiring company has a reasonable basis for treating the workers in question as independent contractors.

GC's can perform most:

Specialty division work (drywall, glazing, etc.)

61G4-12.011 Definitions

Story- the portion of a building included between the upper surface of a floor or average grade, finished or unfinished, open or enclosed, and the uppers surface of the flow or roof next above and having a minimum clear height of 7 feet or more Advertise-

Professional responsibility- liability

The QA is responsible for all financial and field matters of the organization and for each job. A secondary QA is responsible only for the field work at sites where his license was used in order to obtain the building permit. You can have two primary qualifying agents, just designate one as secondary

Changes in licensure information:

The department must be informed by mail of any change in the information required to be submitted on the application for qualification of a business organization within: 45 days following the change.

61G4-12.010 Probably cause panel

The determination as to whether probably cause exists to believe that a violation of the provisions of part 1 ch 489 has occurred shall be made by a unanimous vote of the appropriate probably cause panel.

Grounds for disciplinary action against contractors:

The licensing board may revoke, suspend or deny the issuance or renewal of a license to a contractor, require financial restitution to a consumer, impose an administrative fine, place a contractor on probation, require continuing education, or take other disciplinary action against a contractor or a business if found guilty of these 17 things:

Florida Administrative Code (FAC) 61G4

The various Licensing boards are given statuatory authority to interpret the specific applications of the licensing laws within their categories. When the licensing board rules it is codified within a set of laws called the FAC this code is sometimes called the Boaard Ruled. The board rules give more specific requirements, the details of how the law is put into practice within the authority of the governing statue. Board rules also give guidelines for disciplinary actions and recommended penalties.

Subcontractors: independent contractors or employees? If the IRS determines the individual is an employee...

They will impose substantial financial hardship in the form of back taxes, social security, unemployment and workers compensation, against the employer.