times the total of the unpaid premiums.
By letter dated April 3, 2013, Respondent requested a formal hearing.
At the hearing, Petitioner called two witnesses and offered into evidence 13 exhibits: Petitioner Exhibits 1 through 13.
Respondent called one witness and offered into evidence one exhibit: Respondent Exhibit 1. All exhibits were admitted into evidence.
On May 21, 2015, the court reporter filed the transcript.
On June 18, 2015, Petitioner filed a proposed recommended order.
Respondent is a corporation that operated a dental practice at 16940 Southwest 94th Court, Miami, Florida, during the period in question, which is January 30, 2010, through January 30, 2013. The corporation became effective on
October 25, 2007, and, as stipulated by the parties, became inactive on September 27, 2013.
At all material times, Dr. Ronia Baker, a dentist licensed to practice in Florida, was an officer and shareholder of Respondent. Her brother, now deceased, served as the corporation's business manager during the period in question.
Petitioner's investigator conducted a site visit on January 30, 2013. During the visit, the investigator asked Dr. Baker if Respondent maintained workers' compensation
insurance on its employees. She replied that she thought so, but called the company's insurance agent to make sure. The agent informed Dr. Baker that Respondent did not have workers' compensation insurance. Dr. Baker promptly informed the investigator of this fact and apologized for this oversight.
Respondent purchased workers' compensation insurance later the same day.
After confirming that, based on the number of its employees, Respondent was required to have workers' compensation insurance, the investigator issued a Stop Work Order during the January 30, 2013, site visit. Cooperating fully with the investigation, Dr. Baker provided Petitioner with all Respondent's records covering employees from January 30, 2010, through January 30, 2013. From this information, Petitioner prepared the above-described Penalty Assessment, which determined a total gross payroll of $625,919.81.
Respondent contends that it is not required to obtain workers' compensation insurance for two classes of employees listed on the Penalty Assessment: independent contractors and employees secured by Dental Staffing Service, which is a provider of dental office employees on a temporary or permanent basis.
According to Respondent, two employees were independent contractors: Juan Morffi and Nelson Fleites. In terms of gross payroll, Respondent paid Mr. Morffi a total of $3721.67 during 2010 and 2011 and Mr. Fleites a total of $510.60 during 2011.
The record is better developed as to Mr. Morffi's duties, but it appears that Mr. Fleites performed the same services under the same conditions of employment as Mr. Morffi. Mr. Morffi and Mr. Fleites worked as dental technicians who made dentures for Respondent's patients. At the start of the period in question, Respondent paid these dental technicians about $25
per hour for their services. Although Respondent later paid these technicians by the piece, Dr. Baker was unsure of when this change in compensation took place, so she could not say whether any of the above identified payments to these dental technicians constituted payments by the piece, rather than by the hour.
Mr. Morffi and Mr. Fleites both had fulltime jobs, so they worked for Respondent as time permitted. Respondent gave Mr. Morffi and Mr. Fleites keys to the office, so they could work hours of their choosing, including while the office was closed.
Mr. Morffi and Mr. Fleites did not see Respondent's patients. Their workplace was not visible to patients, so they wore clothes of their choosing, even if working during normal business hours.
Mr. Morffi and Mr. Fleites provided their own tools, but also used Respondent's equipment in fabricating dentures.
Dr. Baker did not dictate to these dental technicians how to make dentures, but insisted that their final products met her quality standards.
According to Respondent, 12 employees were provided by Dental Staffing Services: Marilia Mareno, Rosana Perez, Tatiana Marrero, Soraya Mejia, Carmen Louima, Emmashea Telemaque, Jeannette Joe, Milessa Marquez, Vanessa Herrera, Zaidis Campos, Mercedes Paternina, and Gisela Robson. In terms of gross payroll, Respondent paid these employees a total of $25,348.15.
Respondent's service agreement with Dental Staffing Service provides that the persons referred to Respondent "are not employees of" Dental Staffing Service, and Respondent shall pay these persons directly at the rates set by Dental Staffing Service. Respondent also holds Dental Staffing Service harmless from any liability that may arise under the agreement for persons referred pursuant to the agreement.
CONCLUSIONS OF LAW
DOAH has jurisdiction over the subject matter.
§§ 120.569 & 120.57(1), Fla. Stat. (2013).
Petitioner bears the burden of proving by clear and convincing evidence the material allegations against Respondent. Dep't of Banking & Finance v. Osborne Stern & Co., 670 So. 2d 932 (Fla. 1996).
Section 440.10(1)(a) requires a covered "employer" to secure for its "employees" payment of workers' compensation, as generally provided in chapter 440.
Section 440.02(16)(a) defines an "employer" as:
“Employer” means . . . every person carrying on any employment, and the legal representative of a deceased person or the receiver or trustees of any person. “Employer” also includes employment agencies, employee leasing companies, and similar agents who provide employees to other persons. If the employer is a corporation, parties in actual control of the corporation, including, but not limited to, the president, officers who exercise
broad corporate powers, directors, and all shareholders who directly or indirectly own a controlling interest in the corporation, are considered the employer for the purposes of ss. 440.105, 440.106, and 440.107.
Pursuant to this statutory definition, there are three potential employers in this case: Dr. Baker, Dental Staffing Service, and Respondent.
A controlling person may be considered an employer in addition to the corporate employer that they control. Although Dr. Baker appears to meet this criterion, Petitioner has not named her a respondent in this case, and, in any event, her status as a controlling person would not relieve Respondent of employer liability.
An employee leasing company or other similar agent providing an employee may be considered an employer. In general, under the doctrine of "lent employment," the employee leasing company, as the "general employer," and the company that is leasing the employee, as the "special employer," may both be liable for securing workers' compensation and may both be relieved from tort liability, provided, as in the present case, the employee has an express or implied contract with the special employer, the employee is performing the work of the special employer, and the special employer has the right to control the details of the work of the employee. Hazealeferiou v. Labor
Ready, 947 So. 2d 599, 602-03 (Fla. 1st DCA 2007).
As the Labor Ready opinion notes, Florida has
incorporated the "lent employment" doctrine in section 440.11(2), which requires the special employer--here, Respondent--to secure workers' compensation unless the general employer--here, Dental Staffing--has already done so. Id. at 603. Reinforcing this
liability is the fact that Respondent, not Dental Staffing Service, paid the employees provided by Dental Staffing Service. In general, pursuant to section 440.02(15)(a), an "employee" is "any person who receives remuneration from an employer for the performance of any work or service while engaged in any employment under any appointment or contract for hire . . . , express or implied, oral or written." Respondent clearly was obligated to secure workers' compensation for the leased employees.
Section 440.02(15)(d)5. provides that an "employee" excludes a "person whose employment is both casual and not in the course of the trade, business, profession, or occupation of the employer." Section 440.02(5) defines "casual" employment as employment for work that is anticipated to be completed within 10 working days. Although some of the leased employees may have met this part of the statutory exclusion, none of them met the second part because their work was in the course of the profession of the employer. This statutory exclusion is thus unavailable to Respondent.
Lastly, Respondent has contended that the two dental technicians who manufactured dentures were independent contractors. Section 440.02(15)(d)1. provides that an "employee" excludes an "independent contractor" outside of the construction industry. Section 440.02(15)(d)1. adds:
In order to meet the definition of independent contractor, at least four of the following criteria must be met:
The independent contractor maintains a separate business with his or her own work facility, truck, equipment, materials, or similar accommodations;
The independent contractor holds or has applied for a federal employer identification number, unless the independent contractor is a sole proprietor who is not required to obtain a federal employer identification number under state or federal regulations;
The independent contractor receives compensation for services rendered or work performed and such compensation is paid to a business rather than to an individual;
The independent contractor holds one or more bank accounts in the name of the business entity for purposes of paying business expenses or other expenses related to services rendered or work performed for compensation;
The independent contractor performs work or is able to perform work for any entity in addition to or besides the employer at his or her own election without the necessity of completing an employment application or process; or
The independent contractor receives compensation for work or services rendered on a competitive-bid basis or completion of a task or a set of tasks as defined by a contractual agreement, unless such contractual agreement expressly states that an employment relationship exists.
If four of the criteria listed in sub- subparagraph a. do not exist, an individual may still be presumed to be an independent contractor and not an employee based on full consideration of the nature of the individual situation with regard to satisfying any of the following conditions:
The independent contractor performs or agrees to perform specific services or work for a specific amount of money and controls the means of performing the services or work.
The independent contractor incurs the principal expenses related to the service or work that he or she performs or agrees to perform.
The independent contractor is responsible for the satisfactory completion of the work or services that he or she performs or agrees to perform.
The independent contractor receives compensation for work or services performed for a commission or on a per-job basis and not on any other basis.
The independent contractor may realize a profit or suffer a loss in connection with performing work or services.
The independent contractor has continuing or recurring business liabilities or obligations.
The success or failure of the independent contractor’s business depends on the relationship of business receipts to expenditures.
Notwithstanding anything to the contrary in this subparagraph, an individual claiming to be an independent contractor has the burden of proving that he or she is an independent contractor for purposes of this chapter.
The two technicians do not qualify as independent contractors. First, Respondent has failed to prove that they meet
any four of the first set of criteria. The technicians did not provide their own work facility; although they used their tools, they also used tools and equipment provided by Respondent. The technicians were likely sole proprietors, so they would not have an employer identification number; the second criterion thus appears inapplicable. Respondent did not pay compensation to a business, but paid directly to the two individuals. There is no indication of any bank accounts that the technicians may have had. The technicians were free to work for others. The evidence fails to establish that Respondent paid either technician by the piece, rather than by the hour. Satisfying only the criterion of an ability to work for others, the technicians fail to qualify as independent contractors under the first set of statutory criteria.
Nor do the technicians appear to be independent contractors after considering the second set of statutory criteria. Although they controlled the means of production, they did not perform specific work for a specific sum because it appears they were paid hourly. There is no evidence that they incurred the principal expenses of their work. Each technician was responsible for the satisfactory completion of his work. But each technician was paid by the hour, not the job; as an hourly worker, neither technician risked a loss in performing the work; neither technician incurred continuing or recurring business liabilities in connection with the work; and the arrangement did
not constitute a business whose success or failure depended on the relationship of revenues and expenses.
Section 440.107(d)1. provided in 2013:
In addition to any penalty, stop-work order, or injunction, the department shall assess against any employer who has failed to secure the payment of compensation as required by this chapter a penalty equal to
1.5 times the amount the employer would have paid in premium when applying approved manual rates to the employer’s payroll during periods for which it failed to secure the payment of workers’ compensation required by this chapter within the preceding 3-year period or $1,000, whichever is greater.
Petitioner has proved that the 2nd Amended Order of Penalty Assessment described above correctly applies the proper manual rate to the pay of each employee listed above and thus correctly calculates the unpaid premium and penalty.
