The Issue At issue in this proceeding is whether the Respondent, Klenk Roofing, Inc. ("Klenk Roofing"), failed to abide by the coverage requirements of the Workers' Compensation Law, chapter 440, Florida Statutes, by not obtaining workers' compensation insurance for its employees and, if so, whether the Petitioner properly assessed a penalty against the Respondent pursuant to section 440.107.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, and the entire record in this proceeding, the following findings of fact are made: The Department is the state agency responsible for enforcing the requirement of the workers' compensation law that employers secure the payment of workers' compensation coverage for their employees and corporate officers. § 440.107, Fla. Stat. Klenk Roofing is a corporation based in Daytona Beach. The Division of Corporations’ “Sunbiz” website indicates that Klenk Roofing was first incorporated on February 23, 2005, and remained an active corporation up to the date of the hearing. Klenk Roofing’s principal office is at 829 Pinewood Street in Daytona Beach. As the name indicates, Klenk Roofing’s primary business is the installation of new roofs and the repair of existing roofs. Klenk Roofing was actively engaged in roofing operations during the two-year audit period from July 24, 2012, through July 23, 2014. Kent Howe is a Department compliance investigator assigned to Volusia County. Mr. Howe testified that his job includes driving around the county conducting random compliance investigations of any construction sites he happens to see. On July 23, 2014, Mr. Howe was driving through a residential neighborhood when he saw a house under construction at 2027 Peninsula Drive in Daytona Beach. He saw a dumpster in the driveway with the name “Klenk Roofing” written on its side. Mr. Howe also saw a gray van with the name “Klenk Roofing” on the door. Mr. Howe saw three men working on the house. He spoke first with Vincent Ashton, who was collecting debris and placing it in the dumpster. Mr. Howe later spoke with Jonny Wheeler and Craig Saimes, both of whom were laying down adhesive tarpaper on the roof when Mr. Howe approached the site. All three men told Mr. Howe that they worked for Klenk Roofing and that the owner was Ronald Klenk. Mr. Ashton and Mr. Wheeler told Mr. Howe that they were each being paid $10 per hour. Mr. Saimes would not say how much he was being paid. After speaking with the three Klenk Roofing employees, Mr. Howe returned to his vehicle to perform computer research on Klenk Roofing. He first consulted the Sunbiz website for information about the company and its officers. His search confirmed that Klenk Roofing was an active Florida corporation and that Ronald Klenk was its registered agent. Ronald Klenk was listed as the president of the corporation and Kyle Klenk was listed as the vice president. Mr. Howe next checked the Department's Coverage and Compliance Automated System ("CCAS") database to determine whether Klenk Roofing had secured the payment of workers' compensation insurance coverage or had obtained an exemption from the requirements of chapter 440. CCAS is a database that Department investigators routinely consult during their investigations to check for compliance, exemptions, and other workers' compensation related items. CCAS revealed that Klenk Roofing had no active workers' compensation insurance coverage for its employees and that Ronald and Kyle Klenk had elected exemptions as officers of the corporation pursuant to section 440.05 and Florida Administrative Code Rule 69L-6.012. Mr. Howe’s next step was to telephone Ronald Klenk to verify the employment of the three workers at the jobsite and to inquire as to the status of Klenk Roofing's workers' compensation insurance coverage. Mr. Klenk verified that Klenk Roofing employed Mr. Wheeler, Mr. Ashton, and Mr. Saimes. Mr. Klenk also informed Mr. Howe that Klenk Roofing did not have workers' compensation insurance coverage for the three employees. Based on his jobsite interviews with the employees, his interview with Mr. Klenk, and his Sunbiz and CCAS computer searches, Mr. Howe concluded that as of July 23, 2014, Klenk Roofing had three employees working in the construction industry and that the company had failed to procure workers’ compensation coverage for these employees in violation of chapter 440. Mr. Howe consequently issued a Stop-Work Order that he personally served on Mr. Klenk on July 23, 2014. Also on July 23, 2014, Mr. Howe served Klenk Roofing with a Request for Production of Business Records for Penalty Assessment Calculation, asking for documents pertaining to the identification of the employer, the employer's payroll, business accounts, disbursements, workers' compensation insurance coverage records, professional employer organization records, temporary labor service records, documentation of exemptions, documents relating to subcontractors, documents of subcontractors' workers compensation insurance coverage, and other business records to enable the Department to determine the appropriate penalty owed by Klenk Roofing. Anita Proano, penalty audit supervisor for the Department, was assigned to calculate the appropriate penalty to be assessed on Klenk Roofing. Penalties for workers' compensation insurance violations are based on doubling the amount of evaded insurance premiums over the two-year period preceding the Stop-Work Order, which, in this case was the period from July 24, 2012, through July 23, 2014. § 440.107(7)(d), Fla. Stat. At the time Ms. Proano was assigned, Klenk Roofing had not provided the Department with sufficient business records to enable Ms. Proano to determine the company’s actual gross payroll. Section 440.107(7)(e) provides that where an employer fails to provide business records sufficient to enable the Department to determine the employer’s actual payroll for the penalty period, the Department will impute the weekly payroll at the statewide average weekly wage as defined in section 440.12(2), multiplied by two.1/ In the penalty assessment calculation, the Department consulted the classification codes and definitions set forth in the SCOPES of Basic Manual Classifications (“Scopes Manual”) published by the National Council on Compensation Insurance (“NCCI”). The Scopes Manual has been adopted by reference in Florida Administrative Code Rule 69L-6.021. Classification codes are four-digit codes assigned to occupations by the NCCI to assist in the calculation of workers' compensation insurance premiums. Rule 69L-6.028(3)(d) provides that “[t]he imputed weekly payroll for each employee . . . shall be assigned to the highest rated workers’ compensation classification code for an employee based upon records or the investigator’s physical observation of that employee’s activities.” Ms. Proano applied NCCI Class Code 5551, titled “Roofing — All Kinds and Drivers,” which “applies to the installation of new roofs and the repair of existing roofs.” The corresponding rule provision is rule 69L-6.021(2)(uu). Ms. Proano used the approved manual rates corresponding to Class Code 5551 for the periods of non-compliance to calculate the penalty. On September 17, 2014, the Department issued an Amended Order of Penalty Assessment in the amount of $214,335.58, based upon an imputation of wages for the employees known to the Department at that time. After Klenk Roofing provided further business records, the Department on December 16, 2014, was able to issue a Second Amended Order of Penalty Assessment in the amount of $87,159.20, based on a mixture of actual payroll information and imputation. The Department eventually received records sufficient to determine Klenk Roofing's payroll for the time period of July 24, 2012, through July 23, 2014. The additional records enabled Ms. Proano to calculate a Third Amended Order of Penalty Assessment in the amount of $19.818.04. The evidence produced at the hearing established that Ms. Proano utilized the correct class codes, average weekly wages, and manual rates in her calculation of the Third Amended Order of Penalty Assessment. The Department has demonstrated by clear and convincing evidence that Klenk Roofing was in violation of the workers' compensation coverage requirements of chapter 440. Jonny Wheeler, Vincent Ashton, and Craig Saimes were employees of Klenk Roofing performing services in the construction industry without valid workers' compensation insurance coverage. The Department has also demonstrated by clear and convincing evidence that the penalty was correctly calculated by Ms. Proano, through the use of the approved manual rates, business records provided by Klenk Roofing, and the penalty calculation worksheet adopted by the Department in Florida Administrative Code Rule 69L-6.027. Klenk Roofing could point to no exemption, insurance policy, or employee leasing arrangement that would operate to lessen or extinguish the assessed penalty. At the hearing, Ronald Klenk testified he was unable to obtain workers’ compensation coverage during the penalty period because it was prohibitively expensive to carry coverage for fewer than four employees. He stated that the insurers demanded a minimum of $1,500 per week in premiums, which wiped out his profits when the payroll was low. Mr. Klenk presented a sympathetic picture of a small business squeezed by high premiums, but such equitable considerations have no effect on the operation of chapter 440 or the imposition of the penalty assessed pursuant thereto.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Department of Financial Services, Division of Workers' Compensation, assessing a penalty of $19,818.04 against Klenk Roofing, Inc. DONE AND ENTERED this 28th day of April, 2015, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of April, 2015.
The Issue Whether Petitioner, Department of Financial Services, Division of Workers’ Compensation (“Division”), properly issued a Stop-Work Order and 4th Amended Penalty Assessment against Respondent, Best Affordable Contractors, LLC (“Respondent”), for failing to obtain workers' compensation insurance that meets the requirements of chapter 440, Florida Statutes.
Findings Of Fact On July 31, 2020, the parties filed a Joint Pre-hearing Stipulation, by which the parties stipulated to the facts set forth in the following paragraphs 2 through 17. Stipulated Findings The Division is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers’ compensation for the benefit of their employees and corporate officers. Respondent was engaged in business operations in Florida during the entire period of January 4, 2017, through January 3, 2019. On January 3, 2019, the Division’s investigator, Deryck Gallegos, commenced a workers’ compensation compliance investigation at Respondent’s work site at 1203 Dancy St., Jacksonville, Florida 32205. On January 3, 2019, Respondent had a paid subcontractor, Terry Wayne Lyons, Sr., performing roofing work at 1203 Dancy St., Jacksonville, Florida 32205. On January 3, 2019, Respondent’s subcontractor, Terry Wayne Lyons, Sr., had five paid employees performing roofing work at 1203 Dancy St., Jacksonville, Florida 32205: Terry Wayne Lyons, Sr.; Jahru Li-Ly Campbell; Kevin Lee Hagan; Terry Wayne Lyons, Jr.; and Jonathan Wayne McCall. On January 3, 2019, Respondent’s subcontractor, Terry Wayne Lyons, Sr., had no workers’ compensation exemptions and no workers’ compensation insurance coverage. On January 3, 2019, Respondent had no workers’ compensation exemptions and no workers’ compensation insurance coverage. On January 3, 2019, the Division issued a Stop-Work Order for Specific Worksite Only and Order of Penalty Assessment to Respondent. The Division served the Stop-Work Order for Specific Worksite Only and Order of Penalty Assessment on Respondent by personal service on January 4, 2019. The Division served a Request for Production of Business Records for Penalty Assessment Calculation on Respondent on January 4, 2019. On February 1, 2019, the Division issued an Amended Order of Penalty Assessment to Respondent. The Division served the Amended Order of Penalty Assessment on Respondent on February 7, 2019. The Amended Order of Penalty Assessment imposed a penalty of $353,349.72. On June 3, 2020, the Division issued a 2nd Amended Order of Penalty Assessment to Respondent. The Division served the 2nd Amended Order of Penalty Assessment on Respondent on June 11, 2020. The 2nd Amended Order of Penalty Assessment imposed a penalty of $68,705.29. On July 30, 2020, the Division served a 3rd Amended Order of Penalty Assessment to Respondent. The 3rd Amended Order of Penalty Assessment imposed a penalty of $46,805.02. Throughout the penalty period, Respondent was an “employer” in the state of Florida, as that term is defined in section 440.02(16). Respondent did not obtain exemptions from workers’ compensation insurance coverage requirements for the entries listed on the penalty worksheet of the 3rd Amended Order of Penalty Assessment as “Employer’s Payroll” during the penalty period. Respondent did not secure the payment of workers’ compensation insurance coverage, nor did others secure the payment of workers’ compensation insurance coverage, for the entries listed on the penalty worksheet of the 3rd Amended Order of Penalty Assessment as “Employer’s Payroll” during the periods of non-compliance listed on the penalty worksheet. The manual rates, class codes, and gross payroll identified on the penalty worksheet of the 3rd Amended Order of Penalty Assessment are correct to the extent a penalty is due. Evidentiary Findings Based on business records received from Respondent, the Division has recalculated the assessed penalty. The proposed penalty has been reduced to $27,553.78. Respondent has paid $1,000.00 for the release of the Stop Work Order, leaving a remaining penalty of $26,553.78. In determining the penalty, the Division reviewed Respondent’s business and financial records for a period of two years, from January 4, 2017, through January 3, 2019. Respondent was cooperative and forthcoming with the Division in providing its business and financial records. Penalties are calculated first by establishing the nature of the work being performed by employees. That is done by comparing the work to descriptions provided in the National Council of Compensation Insurance (NCCI) SCOPES® Manual. As relevant to this proceeding, the work being performed by persons who were employees of Respondent was as described in SCOPES® Manual class codes 5551 (Roofing - All Kinds & Drivers); 8227 (Construction or Erection Permanent Yard); 5213 (Concrete Construction NOC); and 8810 (Clerical Office Employees NOC). Workers’ compensation insurance premium rates are established based on the risk of injury associated with a particular class code. The greater the risk of injury, the greater the premium rate to insure that risk. Work such as roofing entails a significant risk of injury, and the approved manual rate is thus very high. Office and clerical work entails a very low risk of injury, and the approved manual rate is correspondingly very low. When work is performed but it is not specifically identified, e.g., laborer, the highest rated classification code for the business being audited is assigned to the employee. In this case, the highest rated classification code applicable to Respondent is class code 5551, for roofing. The 4th Amended Order of Penalty Assessment reveals payroll for individuals engaged in work described in class codes as follows: Anthony Wright - class code 5551 Donnell Eugene Johnson - class code 5551 Edward Tipton - class code 8227 Eugene Monts - class code 5213 James Dunlap - class code 5551 James Walters - class code 5551 Jorel Golden - class code 5551 Kelvin Morrison - class code 5551 Matthew Robinson - class code 5551 Vincent Marino - class code 8810 Jahru Li-Ly Campbell - class code 5551 Kevin Lee Hagan - class code 5551 Jonathan Wayne McCall - class code 5551 Terry Lyons, Jr. - class code 5551 Terry Lyons, Sr. - class code 5551 Mr. Lyons, Sr., was retained by Respondent as a subcontractor. Mr. Lyons, Sr., previously held an exemption from workers’ compensation as an officer of his company, but it had expired on December 27, 2017. Mr. Lyons, Sr., was working at the 1203 Dancy Street worksite on January 3, 2019. The evidence was sufficient to establish that Mr. Lyons, Sr., was appropriately assigned as class code 5551. His exemption was accepted up to its date of expiration, so the period applicable to the penalty calculation for Mr. Lyons, Sr., was from December 28, 2017, to January 3, 2019. Mr. Lyons, Sr.’s employees who were working at the 1203 Dancy Street worksite on January 3, 2019, were Mr. Campbell, Mr. Hagan, Mr. McCall, and Mr. Lyons, Jr. The evidence was sufficient to establish that they were employees of Respondent’s uninsured subcontractor, and that they were appropriately assigned as class code 5551. Mr. Wright and Mr. Robinson were listed on Respondent’s Profit & Loss Detail Sheet as “subcontract labor -- roofing.” Respondent was not able to demonstrate that they were covered by workers’ compensation. The evidence was sufficient to establish that Mr. Wright and Mr. Robinson were appropriately included in the penalty calculation, and that they were appropriately assigned as class code 5551. Mr. Johnson, Mr. Dunlap, and Mr. Morrison were listed on Respondent’s Profit & Loss Detail Sheet as “subcontract labor -- laborer.” Respondent was not able to demonstrate that they were covered by workers’ compensation. The evidence was sufficient to establish that Mr. Johnson, Mr. Dunlap, and Mr. Morrison were appropriately included in the penalty calculation, and that they were appropriately assigned as the highest rated classification code applicable to Respondent, class code 5551. Mr. Tipton was listed on Respondent’s Profit & Loss Detail Sheet as “subcontract labor -- handyman, yard work/clean up, truck detail.” Mr. Monts was listed on Respondent’s Profit & Loss Detail Sheet as “subcontract labor -- laborer.” Ms. Murcia testified that Mr. Marino provided information that Mr. Monts did concrete work, rather than roofing. Respondent was not able to demonstrate that they were covered by workers’ compensation. Mr. Marino indicated that Mr. Tipton and Mr. Monts should have been identified as his personal expenses, performing work at his home. However, they were identified in Respondent’s records as subcontract labor, and the payments to them were reported on Respondent’s 2017 income tax return as business expenses. They each received multiple payments over an extended period. The evidence was sufficient to establish that Mr. Tipton and Mr. Monts were employees of Respondent. The evidence was sufficient to establish that Mr. Tipton was appropriately assigned as class code 8227, and that Mr. Monts was appropriately assigned as class code 5213. Nonetheless, payments to the two were reduced by 20 percent to account for expenditures for materials, with the remaining 80 percent constituting payroll. Fla. Admin. Code R. 69L-6.035(1)(i). Mr. Marino was not an on-site employee of Respondent, but rather performed administration and clerical functions for Respondent. Mr. Marino previously had workers’ compensation, but it had been cancelled on February 28, 2015. The evidence was sufficient to establish that Mr. Marino was appropriately assigned as class code 8810. Mr. Marino obtained an exemption from workers’ compensation as an officer of Respondent on January 4, 2019. The evidence established that James Walters performed repairs to Respondent’s truck. The evidence was not clear and convincing that Mr. Walters was an employee of Respondent. Jorel Golden was identified solely as the payee on a single check image. He did not appear on Respondent’s Profit & Loss Detail Sheet, and there was no evidence as to why Mr. Golden was being paid. The evidence was not clear and convincing that Mr. Golden was an employee of Respondent. The salaries of the employees were calculated based on Respondent’s business records. The total gross payroll amounted to $170,139.07. Except for the amount of payments to Mr. Walters and Mr. Golden, that figure is supported by clear and convincing evidence. The penalty for Respondent’s failure to maintain workers’ compensation insurance for its employees is calculated as 2.0 times the amount Respondent would have paid in premiums for the preceding two-year period. The NCCI periodically issues a schedule of workers’ compensation rates per $100 in salary, which varies based on the SCOPES® Manual classification of the business. The NCCI submits the rates to the Florida Office of Insurance Regulation, which approves the rates to be applied to the calculation of premiums in Florida. The workers’ compensation insurance premium was calculated by multiplying one percent of the gross payroll ($17,013.91) by the approved manual rate for each quarter (which varied depending on the quarterly rate), which resulted in a calculated premium of $18,369.19. Clear and convincing evidence supports a finding that the Division applied the correct rates in calculating the premium. The penalty was determined by multiplying the calculated premium by 2.0, resulting in a final penalty of $36,738.38. In recognition of Respondent’s cooperation in the investigation and the timely submission of its business records, the Division applied a 25 percent reduction in the penalty ($9,184.60), resulting in a total penalty of $27,553.78. The evidence established that the Division gave every benefit of the doubt to Respondent to reduce the penalty, and its effect on Respondent, to the extent allowed within the confines of the law and the records provided.
Recommendation Based on the Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation enter a final order assessing a penalty of $27,553.78, against Respondent, Best Affordable Contractors, LLC, for its failure to secure and maintain required workers’ compensation insurance for its employees and subcontracted labor, subject to recalculation as provided herein, and subject to Respondent’s previous payment of $1,000.00. DONE AND ENTERED this 15th day of September, 2020, in Tallahassee, Leon County, Florida. S E. GARY EARLY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of September, 2020. COPIES FURNISHED: Vincent Marino Best Affordable Contractors, LLC 1348 Clements Woods Lane Jacksonville, Florida 32211 (eServed) Leon Melnicoff, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-4229 (eServed) Julie Jones, CP, FRP, Agency Clerk Division of Legal Services Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0390 (eServed)
The Issue The issue in this case is whether the Florida Commission on Human Relations (FCHR) should grant the Petition for Relief, charging the Respondent with discrimination based on handicap (back and knee injuries), in violation of Section 760.10, Fla. Stat. (1989).
Findings Of Fact The Petitioner, Ulysess S. Uqdah, is a carpenter. He has injured his back on-the-job with a construction company other than the Respondent in 1981 or 1982 and, with another construction company other than the Respondent, in early 1984. On one of those occasions, the Petitioner received worker compensation. On both occasions, after a period of time off, the Respondent returned to work with the same employer without any continuing difficulties. In 1984 or 1985, while working for a construction company other than the Respondent, the Petitioner hurt his knee while on the job. He took time off, received worker compensation, and ultimately required surgery. After recuperating from the surgery, the Petitioner was able to return to work. Other than occasional recurring pain, the Petitioner does not worry about the knee, and his knee does not significantly hamper him in the performance of his work as a carpenter. On or about December 12, 1986, the Petitioner was hired by the Respondent, Pace Construction Corporation of Georgia. The Respondent was aware of the Petitioner's prior injuries. He disclosed them on his written employment application. The application also disclosed that the Petitioner had received worker compensation. The Petitioner worked for the Respondent until June 17, 1988, when he was terminated because of the Respondent's lack of work. During his employment with the Respondent, the back and knee injuries did not cause the Petitioner any difficulties in performing his work, and his work was satisfactory. In fact, the Separation Notice states: "Ulysess has proved himself to be a very good worker and gives 100% at all times. He has leadership qualities and shows his concern for the success of the project." The Respondent's regular practice was 1/ to box up all paperwork relating to a construction project when it is completed and put the paperwork in storage. The paperwork from finished projects was stored off the premises of the main business office and was not accessible to the Respondent for reference in connection with subsequent construction projects. 2/ In approximately late 1989 or early 1990, when the Respondent started a major new project in Tampa, the Petitioner applied to again work as a carpenter for the Respondent. His application was held, along with others applying for work, until the Respondent was ready to begin hiring. In approximately March, 1990, the project superintendent reviewed the applications, selected those he wanted to hire, and forwarded those applications to the Respondent's business office for processing. The Petitioner's application was among those selected. In accordance with the Respondent's normal practices, arrangements were made to have the Petitioner and the other chosen applicants undergo a drug and physical examination. The Petitioner's examinations took place on or about March 16, 1990. Meanwhile, the Respondent's personnel office verified the answers given by the Petitioner and the other chosen applicants to the question on the employment application asking whether the applicant had ever received worker compensation. The Respondent located a worker compensation claim report from April, 1989, which noted as to the Petitioner: "10/13/83 West Coast Form. LT- Back" and "4/24/86 Johnson Glen LT-Left leg/ft." 3/ This indicated that the Petitioner had received worker compensation on those two occasions. The Respondent's personnel office forwarded the worker compensation report to the project superintendent, who told the Petitioner that he would not be hired. The Petitioner understood the superintendent to say that the Petitioner was not being hired because of his history of on-the-job injuries and because it would not be in the best interest of the Respondent to hire the Petitioner. The Petitioner understood the superintendent to mean that the prior injuries, which had resulted in worker compensation, would handicap the Petitioner in his ability to perform his assigned duties as carpenter and that the Respondent did not want to have to pay worker compensation if the Petitioner reinjured himself. The superintendent testified that he told the Petitioner he was not being hired because he had falsified his answer to the question on the employment application concerning worker compensation history. It was the Respondent's company policy not to hire any applicant who failed to disclose on his employment application the receipt of worker compensation in the past. This is because a special disability fund would pay worker compensation for such employees only if the receipt of worker compensation in the past was disclosed on the written employment application. The Petitioner claims that he in fact disclosed on his application his receipt of worker compensation in the past and that the Respondent's claim to the contrary is a pretext for intentional discrimination on the basis of a perceived handicap. The Respondent's evidence was that, at that point in time, the Respondent's policy was to discard the application and similar paperwork on applicants who were not hired. Now, after the claims the Petitioner made in this case, the Respondent keeps this documentation. Neither party could produce the Petitioner's application at the final hearing to clarify whether the Petitioner had in fact disclosed on his application his receipt of worker compensation in the past. 4/ The Petitioner concedes that, on or about April 11, 1990, he was advised by an investigator with the Florida Commission on Human Relations that the Respondent was contending it declined to hire the Petitioner due to false statements on his employment application relating to worker compensation. The Respondent submitted persuasive evidence that, besides hiring the Petitioner in 1986 with knowledge of past injuries, it has continued to hire other individuals with a history of on-the-job injuries. The Respondent also submitted persuasive evidence that it has fired employees when it later came to the attention of the Respondent that the employee had falsified an employment application, particularly by falsely stating that worker compensation had not been received in the past. It is found that the Respondent declined to hire the Petitioner based on the Respondent's perception that the Petitioner had falsified his employment application by stating that he had not received worker compensation in the past. It is specifically found that the Respondent did not discriminate against the Petitioner due to a handicap or perceived handicap. There is no evidence of any reason why the Respondent would have discriminated against the Petitioner due to a handicap or perceived handicap. To the contrary, the evidence is clear that the Respondent viewed the Petitioner as being fully capable of performing the job of carpenter satisfactorily notwithstanding his prior back and knee injuries. 5/ In light of the findings made in this case, it would appear that the Petitioner misunderstood the statement made by the job superintendent as to the reasons why the Petitioner was not being hired. This proceeding resulted from the Petitioner's misunderstanding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Commission on Human Relations enter a final order denying the Petition for Relief filed in this case. RECOMMENDED this 20th day of December, 1991, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of December, 1991.
Conclusions This cause came on before Tom Gallagher, as Chief Financial Officer of the State of Florida, for consideration of and final agency action on the Recommended Order issued herein on October 4, 2003, by Administrative Law Judge J.D. Parrish. No exceptions to that Recommended Order were filed. , Having reviewed the Recommended Order and the record of this proceeding, and being otherwise apprised in all material premises, IT IS HEREBY ORDERED that the Findings of Fact and Conclusions of Law made and announced by the Administrative Law Judge in the Recommended Order are adopted without exception as the Findings of Fact and Conclusions of law of the agency. IT IS HEREBY FURTHER ORDERED that Janusz Kraj shall pay to the Division of Worker's Compensation a civil penalty in the amount of $1,100, within thirty days from the date hereof, said sum to thereafter bear interest at the rate of 9% per anum until paid. IT {S$ HEREBY FURTHER ORDERED that the Stop Work And Penalty Assessment Order entered by the Division of Worker's Compensation is affirmed, and that Janusz Kraj shall cease all business operations unless and until he provides evidence satisfactory to the Division of Worker's Compensation of having now complied with the workers compensation law by securing the necessary worker's compensation for covered employees and, pursuant to Section 440.107(7)(a), Florida Statutes, paid the civil penalty imposed herein. Lh DONE AND ORDERED this 3° — day of November, 2003. ST ) Sie \eouw Tom Gallag Chief Financial Officer Tomy “ay a PEF LAO
The Issue The issue for determination is whether Respondent is authorized to levy Petitioner's bank account and apply the funds to reduce or satisfy Petitioner's unpaid unemployment taxes, interest, and penalties.
Findings Of Fact Petitioner, Harold Pratt Paving and Sealing, Inc., is a Florida corporation with its home office and principal place of business at 2242 Bruner Lane, Southeast, Ft. Myers, Florida 33192. Harold W. Pratt is the president and director of the company. Petitioner is an employer within the meaning of Chapter 443, Florida Statutes (2003), and is subject to the provisions of that chapter. As an employer, Petitioner employs and pays wages to his employees. In accordance with Subsection 443.131(1), Florida Statutes (2003), Petitioner is required to pay a payroll tax to the Unemployment Compensation Trust Fund, which is required to finance unemployment benefits. Petitioner's State of Florida unemployment tax account number is 2032262. Contributions, also referred to as unemployment taxes, are self-reported by employers. The contributions accrue and are payable by employers for each calendar quarter the employer is subject to Chapter 443, Florida Statutes (2003), for wages paid during each calendar quarter for employment. The contributions are due and payable by the employer to the tax collection service provider the last day of the month following the calendar quarter for which they are payable. The payments become delinquent on the first working day of the following month. See § 443.131(1), Fla. Stat. (2003), and Fla. Admin. Code R. 60BB-2.027. As of the date of the hearing, Petitioner owes unemployment taxes and associated interest and penalties in the amount of $46,133.94. The Department of Revenue is authorized to administer the tax laws of the State of Florida pursuant to Section 213.05, Florida Statutes (2003). The Department of Revenue serves as the tax collection service provider pursuant to Section 443.1316, Florida Statutes (2003), and is responsible for the collection of unemployment taxes. Typically, when an employer does not timely submit its unemployment tax payment and report, the Department sends the employer a delinquency notice. The employer then has 15 to 20 days to respond. If payment is not received, the Department then takes more serious action. On November 19, 2003, the Department issued a Subpoena Duces Tecum to Mr. Pratt to produce specified employment records at the Department's Ft. Myers office on December 15, 2003. Mr. Pratt and Ms. Jaffray, Petitioner's secretary and bookkeeper, produced the records as required by the subpoena. On December 15, 2003, when Mr. Pratt and Ms. Jaffray were at the Department's office, they talked to Ms. Philander, the Department auditor assigned to Petitioner's case, about entering into a time payment agreement with the Department. The time payment agreement is available to employers who owe delinquent unemployment taxes and allows them to make payments over time. This option is permitted at the discretion of the Department auditor assigned to the employer. In December 2003, Mr. Pratt and/or Ms. Jaffray, and Ms. Philander discussed the time payment agreement option, but did not execute any agreement. Because Mr. Pratt had not yet submitted Petitioner's current wage report to Tallahassee, but would be submitting it soon, Ms. Philander wanted to wait until the total amount of Petitioner's outstanding unemployment taxes was calculated. Once that amount was determined, the parties planned to enter into a time payment agreement. Ms. Philander advised Mr. Pratt and Ms. Jaffray that she would contact them once the adjustment had been made. Some time after December 15, 2003, and mid-January 2004, Ms. Philander received Petitioner's unemployment tax account statement. She then called Ms. Jaffray and notified her that Petitioner's account statement had come in and that she and Mr. Pratt would be receiving a copy of the statement. Ms. Philander also told Ms. Jaffray that Mr. Pratt should come up with figures that would be appropriate for the terms of repayment. In a January 16, 2004, telephone conversation, Ms. Jaffray told Ms. Philander that she would call her the following week to tell her the amount of money that Petitioner would pay under a time payment agreement. Ms. Jaffray explained that she could not provide this information until Mr. Pratt told her the amount he could pay. The following week, Ms. Philander never received a call from either Mr. Pratt or Ms. Jaffray. At one point, Ms. Jaffray told Ms. Philander that Petitioner could pay $5,000 down, in certified funds, and $5,000, in certified funds, per month thereafter. However, Ms. Jaffray told Ms. Philander that she would have to check with Mr. Pratt before this payment plan could be finalized. After she did not hear from Mr. Pratt or Ms. Jaffray, on February 1, 2004, Ms. Philander called Petitioner's office and left a message on Petitioner's answering machine or voice mail. On February 4, 2004, Ms. Philander left another message for Mr. Pratt that she needed the money or she would start "injunction." Mr. Pratt never offered any proposed payment amounts to Ms. Philander and never signed a time payment agreement. On or about February 5, 2004, the Department sent a Notice to Freeze to the Colonial Bank in Birmingham, Alabama. In the notice, which was sent by certified mail, the Department advised Colonial Bank that Petitioner "has a delinquent liability for tax, penalty, and interest of $46,133.94, which is due to the State of Florida." Moreover, the Department directed the bank not to transfer, dispose, or return any credits, debts, or other personal property owned by or owed to Petitioner. On February 10, 2004, the Colonial Bank verified that it held one account identified as belonging to Petitioner, which had a current balance of $20,625.75. On February 11, 2004, the Department issued a Notice of Intent to Levy on personal property belonging to Petitioner in the possession or control of the Colonial Bank. The Notice of Levy stated that "the action is taken for nonpayment of taxes, penalty, and interest in the sum of $46,133.94, and will proceed unless you pay this delinquent amount within 21 days from the date of receipt of this Notice of Intent to Levy." The notice also advised Petitioner of his right to a hearing. The Department mailed the Notice of Intent to Levy to Petitioner by certified mail, which was received by Petitioner on February 12, 2004.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Revenue enter a final order that: (1) levies $20,625.75 in Petitioner's bank account at the Colonial Bank; (2) applies the funds to reduce Petitioner's delinquent taxes, interest, and penalties; and (3) credits Petitioner for said payment. DONE AND ENTERED this 30th day of August, 2004, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of August, 2004. COPIES FURNISHED: Harold Pratt, President Harold Pratt Paving & Sealing, Inc. 2242 Bruner Lane, Southeast Fort Myers, Florida 33912 James O. Jett, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Bruce Hoffmann, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 James Zingale, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
The Issue The issue is whether The Department of Financial Services properly imposed a Stop Work Order and Amended Order of Penalty Assessment pursuant to the requirements of Chapter 440, Florida Statutes.
Findings Of Fact The Division is charged with the regulation of workers' compensation insurance in the State of Florida. Respondent AFS, LLC. (AFS), is a corporation located in Jacksonville, Florida, and is involved in the construction industry, primarily framing houses. Braman Avery is the owner and manager of AFS. Lee Arsenault is a general contractor whose business is located in Jacksonville, Florida. Mr. Arsenault contracted with AFS to perform framing services at a construction site located at 1944 Copperstone Drive in Orange Park, Florida. At all times material to this proceeding, AFS maintained workers' compensation coverage for its employees through a licensed employee leasing company. AFS contracted with Greenleads Carpentry, Inc. (Greenleads) to perform work at the job site in question. Prior to subcontracting with Greenleads, Mr. Avery requested from Greenleads, among other things, a certificate of insurance showing that Greenleads had general liability coverage and workers' compensation insurance. Greenleads provided a certificate of insurance to Mr. Avery showing that Greenleads had workers' compensation coverage. The certificate of insurance contains a policy number, dollar limits, and effective and expiration dates of June 1, 2004 through June 1, 2005. Debra Cochran is office manager of Labor Finders, an employee leasing company. According to Ms. Cochran, Labor Finders' corporate office issued the certificate of insurance to Greenleads. At the time of issuance, the certificate of insurance was valid. Greenleads did not follow through on its obligations to Labor Finders in that Green Leads did not "run its workers through" Labor Finders. Consequently, Greenleads' workers were not covered by workers' compensation as indicated on the certificate of insurance. Labor Finders did not issue any document showing cancellation or voiding of the certificate of insurance previously issued. Mr. Avery relied upon the face of the certificate of insurance believing AFS to be in total compliance with statutory requirements regarding workers' compensation for subcontractors. That is, he believed that the Greenleads' workers were covered for workers' compensation as indicated on the face of the certificate of insurance. Mr. Avery was not informed by Labor Finders or Greenleads that Greenleads did not, after all, have workers' compensation coverage in place on the workers performing work under the contract between AFS and Greenleads on the worksite in question. Bobby Walton is president of Insure America and has been in the insurance business for 35 years. His company provides general liability insurance to AFS. According to Mr. Walton, Mr. Avery's reliance on Greenleads' presentation to him of a purportedly valid certificate of insurance is the industry standard. Further, Mr. Walton is of the opinion that there was no obligation on behalf of Mr. Avery to confirm coverage beyond receipt of the certificate of insurance provided by the subcontractor. That is, there is no duty on behalf of the contractor to confirm coverage beyond receipt of the certificate of insurance. Allen DiMaria is an investigator employed by the Division. His duties include investigating businesses to ensure that the employers in the state are in compliance with the requirements of the workers' compensation law and related rules. On January 5, 2005, Mr. DiMaria visited the job site in question and observed 13 workers engaged in construction activities. This visit was a random site check. Mr. DiMaria interviewed the owner of Greenleads and checked the Division's database. Mr. DiMaria determined that Greenleads did not have workers' compensation coverage. After conferring with his supervisor, Mr. DiMaria issued a stop-work order to Greenleads, along with a request for business records for the purpose of calculating a penalty for Greenleads. In response to the business records request, Greenleads submitted its check ledger along with an employee cash payment ledger, both of which were utilized in calculating a penalty for Greenleads. On January 11, 2005, Mr. DiMaria issued an Amended Order of Penalty Assessment to Greenleads for $45,623.34. Attached to the Amended Order of Penalty Assessment issued to Greenleads is a penalty worksheet with a list of names under the heading, "Employee Name", listing the names of the employees and amounts paid to each employee. During the investigation of Greenleads, Mr. DiMaria determined that Greenleads was performing subcontracting work for Respondent. This led to the Division's investigation of AFS. Mr. DiMaria spoke to Mr. Avery and determined that AFS paid remuneration to Greenleads for work performed at the worksite. He checked the Division's data base system and found no workers' compensation coverage for AFS. He determined that AFS had secured workers' compensation coverage through Southeast Personnel Services, Inc. (SPLI), also a licensed employee leasing company. However, the policy with SPLI did not cover the employees of Greenleads performing work at the job site. Mr. DiMaria requested business records from Mr. Avery. Mr. Avery fully complied with this request. He examined AFS' check registry and certificates of insurance from AFS. Other than the situation involving Greenleads on this worksite, Mr. DiMaria found AFS to be in complete compliance. On January 10, 2005, after consulting with his supervisor, Robert Lambert, Mr. DiMaria issued a Stop Work Order to AFS. A Stop Work Order issued by the Division requires the recipient to cease operations on a job site because the recipient is believed to be not in compliance with the workers' compensation law. The Stop Work Order issued by Mr. DiMaria was site specific to the work site in question. Based upon the records provided by Mr. Avery, Mr. DiMaria calculated a fine. Penalties are calculated by determining the premium amount the employer would have paid based on his or her Florida payroll and multiplying by a factor of 1.5. Mr. DiMaria's calculation of the fine imposed on AFS was based solely on the Greenleads' employees not having workers' compensation coverage. On February 16, 2005, Mr. DiMaria issued an Amended Order of Penalty in the amount of $45,643.87, the identical amount imposed upon Greenleads. A penalty worksheet was attached to the Amended Order of Penalty Assessment. The penalty worksheet is identical to the penalty worksheet attached to Greenleads' penalty assessment, with the exception of the business name at the top of the worksheet and the Division's case number. Greenleads partially paid the penalty by entering into a penalty payment agreement with the Division. Greenleads then received an Order of Conditional Release. Similarly, AFS entered into a penalty payment agreement with the Division and received an Order of Conditional Release on February 16, 2005. Moreover, AFS terminated its contract with Greenleads. Lee Arsenault is the general contractor involved in the work site in question. AFS was the sole framing contractor on this project, which Mr. Arsenault described as a "pretty significant project." He has hired AFS to perform framing services over the years. However, because the Stop Work Order was issued to AFS, Mr. Arsenault had to hire another company to complete the framing work on the project. Mr. Avery estimates economic losses to AFS as a result of losing this job to be approximately $150,000, in addition to the fine. Mr. Arsenault, Ms. Cochran, as well as the Division's investigator, Mr. DiMaria, all agree with Mr. Walton's opinion, that it is customary practice in the construction industry for a contractor who is subcontracting work to rely on the face of an insurance certificate provided by a subcontractor. Robert Lambert is a workers' compensation district supervisor for the Division. When asked under what authority the Division may impose a penalty on both Greenleads and AFS for the same infraction, he replied that it was based on the Division's policy and its interpretation of Sections 440.02, 440.10, and 440.107, Florida Statutes.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Division of Workers' Compensation rescind the Amended Order of Penalty Assessment issued February 16, 2005, and the Stop Work Order issued to Petitioner on January 10, 2005. DONE AND ENTERED this 26th day of August, 2005, in Tallahassee, Leon County, Florida. S BARBARA J. STAROS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of August, 2005. Endnote 1/ While this Recommended Order does not rely upon the case cited by Respondent in its Notice of Supplemental Authority, Respondent was entitled to file it. COPIES FURNISHED: Colin M. Roopnarine, Esquire Douglas D. Dolin, Esquire Department of Financial Services Division of Workers' Compensation East Gaines Street Tallahassee, Florida 32399 Mark K. Eckels, ESquire Boyd & Jenerette, P.A. North Hogan Street, Suite 400 Jacksonville, Florida 32202 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Carlos G. Muniz, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
Findings Of Fact State of Florida, Department of Labor and Employment Security, Unemployment Appeals Commission ("Commission") is an agency affected by the petition in this matter. It exists within the Department of Labor and Employment Security ("Department"), and receives its property, personnel, and appropriations from the Department. The Commission and the Department are agencies as defined in Section 120.52(1), Florida Statutes. Petitioner, Juan Alfonso, Social Security Number 034-44-0611, resides at 20082 N.W. 43 Court, Carol City, Dade County, Florida. Petitioner is a party in proceedings before the Commission to obtain unemployment compensation benefits. His case was Referee Decision Docket No. 80-901OU, and is now on appeal by Petitioner to the Unemployment Appeals Commission, UCA Docket No. 80-2199. Petitioner was denied unemployment compensation benefits by a claims examiner of the Department, who issued two claims determinations on or about May 1, 1980. The Claims Examiner is not employed by the Commission, but by the Department. Exhibits B and C attached hereto are true and correct copies of the determinations issued by the claims examiner on or about May 1, 1980. Petitioner timely appealed both decisions of the Claims Examiner. A hearing was noticed on Petitioner's appeal. Notice of the hearing was given pursuant to Form UCA-2 and Rule 38E- 5.15(2), Florida Administrative Code. Rule 38E-5.15(2), Florida Administrative Code, a rule of the Commission. Form UCA-2 is issued by the Department. Exhibit A, consisting of two pages, attached hereto, is a true and correct copy of the front and back of the notice of hearing given Petitioner in the hearing regarding his appeal from the Claims Examiner's determination. Petitioner was given no other written notice of hearing. Hearing was held before an appeals referee, an employee of the Department, on June 11, 1980, pursuant to the notice attached as Exhibit A. Petitioner appeared at the hearing on June 11, 1980, without counsel. Petitioner has standing to bring this Rule Challenge. Exhibit D attached hereto, consisting of four pages, is a true and correct copy of the Referee's decision issued as a result of the hearing held on June 11, 1980, in Docket No. 80-9010U. Petitioner timely appealed that decision to the Commission. Petitioner's appeal is currently pending before the Commission in UCA Docket No. 80-2199. Petitioner's case has not yet been decided by the Commission. Petitioner is not receiving unemployment compensation benefits at this time, due to the adverse decision of the appeals referee resulting from the June 11 hearing. When a claimant such as Petitioner files a claim with the Department for unemployment compensation benefits, he completes Claim for Benefits LES form UCA-3, which requests the name of the last employer and the reason for separation. Upon completion of the form, his last employer is furnished LES form UCA-4, which contains the reasons for the separation contained on LES form UCA- The employer is requested by the Department to provide information regarding the reason for his job separation, whether the claimant has refused an offer of work, and whether the employer would re-employ the claimant. Upon receipt of the employer's response, a fact finding interview is conducted by a claims interviewer employed by the Department, who inquires into the subject of the termination, offers of work, and work search. The interviewer verbally advises the claimant of the employer's statement. The claimant provides his response. A summary of the interview is recorded on LES form UCA-64. During or after the interview, the claims interviewer contacts the employer by telephone and advises the employer verbally of the claimant's statements made on the fact finding report. The employer provides his statement to the interviewer. A summary of the telephone interview is recorded on the Fact Finding Report. If the employer raises a new matter not raised in his initial response, the claimant is verbally advised of such matters. The claimant provides a statement in response. A summary of the claimant's response is recorded on a Fact Finding Report. A claims determination is then rendered. If the determination is favorable to the claimant, the employer may appeal. If the determination is adverse to the claimant, the claimant may appeal. Notice of hearing of the appeal is given pursuant to Rule 38E-5.15(2). If the party resides in Florida, the notice of hearing is provided on form UCA- 2. The majority of unemployment compensation claimants' are not represented by counsel at any stage of the proceedings; however, Respondent does not concede that whether a claimant is represented by counsel is relevant to the subject matter of the rule challenge hearing. A claimant who has been determined by a claims examiner to have voluntarily quit his job without good attributable to the employer can be found by an appeals referee to have been discharged for misconduct connected with work. A claimant who has been determined by a claims examiner to have been discharged can be found by an appeals referee to have voluntarily quit his job without good cause attributable to the employer. Respondent does not concede that LES Form UCA-2 is a rule. LES Form UCA-2 has not been adopted pursuant to Chapter 120, Florida Statutes. In adopting Rule 38E-5.15(2), the Commission did not seek modification of the model rules as described in Section 120.54(10), Florida Statutes. SUPPLEMENTAL STIPULATION The parties stipulate as follows regarding the hearing held before the appeals referee on June 11, 1980, in Referee Docket No. 80-9010U, regarding Petitioner's claim for unemployment compensation benefits: Several times during the hearing, the petitioner asked for clarification of which job was being referred to. Petitioner stated that he did not understand the paper from the unemployment office. Petitioner stated that he did not understand what job he was supposed to have quit, or what location he was supposed to be dissatisfied with. Petitioner had difficulty answering questions about tardiness, stating he could not remember. The employer raised the issue of misconduct for the first time at the hearing.
The Issue At issue in this proceeding is whether the Respondent, Forever Floors and More, Inc. ("Forever Floors"), failed to abide by the coverage requirements of the Workers' Compensation Law, chapter 440, Florida Statutes by not obtaining workers' compensation insurance for its employees, and, if so, whether the Petitioner properly assessed a penalty against the Respondent pursuant to section 440.107, Florida Statutes.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, and the entire record in this proceeding, the following findings of fact are made: The Department is the state agency responsible for enforcing the requirement of the Workers' Compensation Law that employers secure the payment of workers' compensation coverage for their employees and corporate officers. § 440.107, Fla. Stat. Forever Floors is a Florida corporation. The Division of Corporations’ “Sunbiz” website indicates that Forever Floors was first incorporated on February 4, 2012, and remained active as of the date of the hearing. Forever Floors’s principal office is at 8205 Oak Bluff Road, Saint Augustine, Florida 32092. Forever Floors is solely owned and operated by Christopher Bohren. Mr. Bohren is the president and sole officer of the corporation. Forever Floors was actively engaged in performing tile installation during the two-year audit period from April 3, 2013, through April 2, 2015. John C. Brown is a government operations consultant for the Department. During the period relevant to this proceeding, Mr. Brown was a Department compliance investigator assigned to Duval County. Mr. Brown’s job included conducting random compliance investigations and investigating referrals made to his office by members of the public. Mr. Brown testified that as an investigator, he would enter worksites and observe the workers and the types of work they were doing. On April 2, 2015, Mr. Brown visited a worksite at 3714 McGirts Boulevard in Jacksonville. He observed two workers installing tile in a shower in an older single-family residence that was undergoing renovations. Mr. Brown identified himself to the two workers and then inquired as to their identities and employment. Mr. Bohren replied that he was the company officer and that his company had an exemption from the requirement to provide workers’ compensation insurance coverage. Mr. Bohren identified the other worker as Dustin Elliott and stated that Mr. Elliott had worked for Forever Floors for about eight months. Mr. Bohren told Mr. Brown that he paid Mr. Elliott sometimes by check and sometimes with cash. After speaking with Mr. Bohren, Mr. Brown returned to his vehicle to perform computer research on Forever Floors. He consulted the Sunbiz website for information about the company and its officers. His search confirmed that Forever Floors was an active Florida corporation and that Christopher Bohren was listed as its registered agent, and as president of the corporation. No other corporate officers were listed. Mr. Brown also checked the Department's Coverage and Compliance Automated System ("CCAS") database to determine whether Forever Floors had secured the payment of workers' compensation insurance coverage or had obtained an exemption from the requirements of chapter 440. CCAS is a database that Department investigators routinely consult during their investigations to check for compliance, exemptions, and other workers' compensation related items. CCAS revealed that Forever Floors had no active workers' compensation insurance coverage for its employees and that no insurance had ever been reported to the state for Forever Floors. There was no evidence that Forever Floors used an employee leasing service. Mr. Bohren had an active exemption as an officer of the corporation pursuant to section 440.05 and Florida Administrative Code Rule 69L-6.012, effective September 24, 2013, through September 24, 2015. There was no exemption noted for Dustin Elliott. Based on his jobsite interviews with the employees and Mr. Bohren, and his Sunbiz and CCAS computer searches, Mr. Brown concluded that as of April 2, 2015, Forever Floors had an exemption for Mr. Bohren but had failed to procure workers’ compensation coverage for its employee, Dustin Elliott, in violation of chapter 440. Mr. Brown consequently issued a Stop- Work Order that he personally served on Mr. Bohren on April 2, 2015. Also on April 2, 2015, Mr. Brown served Forever Floors with a Request for Production of Business Records for Penalty Assessment Calculation, asking for documents pertaining to the identification of the employer, the employer's payroll, business accounts, disbursements, workers' compensation insurance coverage records, professional employer organization records, temporary labor service records, documentation of exemptions, documents relating to subcontractors, documents of subcontractors' workers’ compensation insurance coverage, and other business records, to enable the Department to determine the appropriate penalty owed by Forever Floors. Mr. Brown testified, and Mr. Bohren confirmed, that Mr. Bohren provided no records in response to the Request for Production. The case file was assigned to a penalty calculator, who reviews the records and calculates the penalty imposed on the business. Mr. Brown did not state the name of the person assigned to calculate the penalty in this case. Anita Proano, penalty audit supervisor for the Department, later performed her own calculation of the penalty as a check on the work of the penalty calculator. Ms. Proano testified as to the process of penalty calculation. Penalties for workers' compensation insurance violations are based on doubling the amount of evaded insurance premiums over the two- year period preceding the Stop-Work Order, which in this case was the period from April 3, 2013, through April 2, 2015. § 440.107(7)(d), Fla. Stat. Because Mr. Bohren had no payroll records for himself or Mr. Elliott on April 2, 2015, the penalty calculator lacked sufficient business records to determine the company’s actual gross payroll on that date. Section 440.107(7)(e) provides that where an employer fails to provide business records sufficient to enable the Department to determine the employer’s actual payroll for the penalty period, the Department will impute the weekly payroll at the statewide average weekly wage as defined in section 440.12(2), multiplied by two.1/ In the penalty assessment calculation, the Department consulted the classification codes and definitions set forth in the SCOPES of Basic Manual Classifications (“Scopes Manual”) published by the National Council on Compensation Insurance (“NCCI”). The Scopes Manual has been adopted by reference in rule 69L-6.021. Classification codes are four-digit codes assigned to occupations by the NCCI to assist in the calculation of workers' compensation insurance premiums. Rule 69L- 6.028(3)(d) provides that "[t]he imputed weekly payroll for each employee . . . shall be assigned to the highest rated workers' compensation classification code for an employee based upon records or the investigator's physical observation of that employee's activities." Ms. Proano testified that the penalty calculator correctly applied NCCI Class Code 5348, titled “Ceramic Tile, Indoor Stone, Marble, or Mosaic Work,” which “applies to specialist contractors who perform tile, stone, mosaic, or marble work.” The corresponding rule provision is rule 69L- 6.021(2)(aa). The penalty calculator used the approved manual rates corresponding to Class Code 5348 for the periods of non- compliance to calculate the penalty. On May 22, 2015, the Department issued an Amended Order of Penalty Assessment in the amount of $23,538.34, based on Mr. Bohren’s imputed wages for the periods not covered by his exemption and the imputed wages for Mr. Elliott for the entire penalty period. Mr. Bohren was served with the Amended Order of Penalty Assessment on June 8, 2015. The evidence produced at the hearing established that Ms. Proano utilized the correct class codes, average weekly wages, and manual rates in her calculation of the Amended Order of Penalty Assessment. The Department has demonstrated by clear and convincing evidence that Forever Floors was in violation of the workers' compensation coverage requirements of chapter 440. Dustin Elliott was an employee of Forever Floors on April 2, 2015, performing services in the construction industry without valid workers' compensation insurance coverage. The Department has also demonstrated by clear and convincing evidence that the penalty was correctly calculated through the use of the approved manual rates and the penalty calculation worksheet adopted by the Department in rule 69L-6.027. Ms. Proano’s recalculation of the penalty confirmed the correctness of the penalty calculator’s work. Forever Floors could point to no exemption, insurance policy, or employee leasing arrangement that would operate to lessen or extinguish the assessed penalty. At the hearing, Christopher Bohren testified that he is the sole proprietor of Forever Floors and that Mr. Elliott had only worked for him for six-to-eight months, mostly on a part-time basis, as of April 2, 2015. He stated that the penalty assessed in this case is more than he has made from his start-up business. After his discussion with Mr. Brown, he immediately procured workers’ compensation insurance coverage for Mr. Elliott and intends to stay within the ambit of the law in the future. Mr. Bohren testified that he was unable to access his business records because they were with his ex-wife, from whom he had an apparently acrimonious departure. Mr. Bohren’s testimony elicited sympathy, but the equitable considerations that he raised have no effect on the operation of chapter 440 or the imposition of the penalty assessed pursuant thereto.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Department of Financial Services, Division of Workers' Compensation, assessing a penalty of $23,538.34 against Forever Floors and More, Inc. DONE AND ENTERED this 28th day of October, 2015, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of October, 2015.
The Issue The issue is whether Petitioner properly issued a Stop-Work Order and 3rd Amended Order of Penalty Assessment against Respondent for failing to obtain workers' compensation insurance that meets the requirements of chapter 440, Florida Statutes.
Findings Of Fact The Division is a component of the Department of Financial Services. It is responsible for enforcing the workers' compensation coverage requirements pursuant to section 440.107. At all times relevant to this proceeding, USA was a corporation registered to do business in Florida. Respondent is a company engaged in the construction industry and was active during the two-year audit period from August 27, 2013, through August 26, 2015. On August 26, 2015, Julio Cabrera ("investigator" or Cabrera"), compliance investigator for the Division, conducted a random construction compliance check at the residential job site, 741 Harbor Drive in Key Biscayne ("residential home"). Cabrera observed two men on Respondent's scaffold plastering the exterior wall of the residential home. Cabrera interviewed the two men working on the scaffold. The workers told the investigator that they were employed by Respondent. They also identified Garcia as the Respondent's owner and provided Garcia's contact information to Cabrera. After interviewing the two workers, Cabrera checked the Department's Coverage and Compliance Automated System for proof of workers' compensation coverage and for exemptions associated with USA. Cabrera's search revealed Garcia had an active exemption, but Respondent did not have a workers' compensation insurance policy or an employee leasing policy for its employees. Cabrera also confirmed that Respondent did not have any type of workers' compensation coverage for its employees by examining the National Council on Compensation Insurance database. Next, Cabrera placed a telephone call to Garcia and interviewed him. Garcia informed Cabrera that the two workers were USA's employees and that Respondent did not have workers' compensation insurance coverage for the workers.1/ After interviewing Garcia, the investigator returned to the two USA employees and requested their identification. Silvano Antonio Delgado Reyes provided his identification and the other USA male employee fled from the job site. That same day Cabrera issued Respondent a Stop-Work Order on behalf of the Division for Respondent's failure to secure the required workers' compensation insurance coverage. Petitioner also served Respondent a Request of Business Records for Penalty Assessment Calculation ("Request") asking for documentation to enable the Division to determine payroll for the audit period of August 27, 2013, through August 26, 2015. USA responded to the Request for records and provided the Division with verification of its business records on several different occasions. Ultimately, Respondent provided bank statements and corresponding check images for most of the two- year audit period. Christopher Richardson ("auditor" or "Richardson"), penalty auditor for the Division, was assigned to USA's investigation. Richardson reviewed the business records produced by Respondent and determined those persons employed by USA during the audit period without workers' compensation insurance. Richardson properly recalculated the penalty amount each time new records were provided by Respondent. USA did not provide sufficient records to determine payroll for February 1, 2014, through December 31, 2014, and August 1, 2015, through 25, 2015, and Richardson properly utilized the computation formula to determine the payroll for the aforementioned audit period without adequate records. Richardson concluded his audit by properly calculating the workers' compensation amount USA owed in workers' compensation insurance for the audit period using the Class Code 5022 for masonry work. Richardson applied the approved manual rates and methodology specified in section 440.107(7)(d) and concluded USA owed a penalty amount of $52,489.24. On March 28, 2016, the Division served Respondent the 3rd Amended Order of Penalty Assessment in the amount of $52,489.24 naming those persons employed by USA during the audit period. On June 30, 2015, Respondent challenged the Stop-Work Order and penalty assessment and requested a formal hearing.
Recommendation Based on the forgoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers' Compensation, issue a final order affirming the Stop-Work Order and 3rd Amended Order of Penalty Assessment in the amount of $52,489.24. DONE AND ENTERED this 15th day of July, 2016, in Tallahassee, Leon County, Florida. S JUNE C. MCKINNEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of July, 2016.
The Issue The issues in this matter are whether Countrywide Siding and Windows, Inc., failed to secure workers compensation that meets the requirements of Chapter 440, Florida Statutes, and, if so was correctly assessed a penalty for violating, the workers’ compensation laws of Florida.
Findings Of Fact Petitioner is the state agency responsible for enforcing the statutory requirement that employers secure workers’ compensation for the benefit of their employees. § 440.107, Fla. Stat. (2009). Respondent is a corporation domiciled in Florida and engaged in the construction industry. On February 13, 2009, Petitioner’s investigator, Carl Woodall, stopped to spot check a house in the Cabrille Lane area of Panama City, Florida, where he saw workers installing siding. Petitioner’s investigator is the only employee for Petitioner who investigated and developed the substantive evidence in this case. Other employees, who have no direct knowledge of the underlying facts, calculated the amounts of the proposed penalties. Mr. Woodall inquired of the workers and ascertained that they worked for Respondent. The investigator then contacted the Respondent to determine whether Respondent had secured or obtained workers’ compensation insurance under Florida’s workers’ compensation law. Respondent’s representative indicated that it maintained workers’ compensation insurance through Employee Leasing Service (ELS), an employee-leasing company. There is no dispute that in February 2009, Respondent leased its workers from ELS and that under the lease agreement, ELS provided workers’ compensation coverage to Respondent and its leased workers. Other evidence suggested that in past years, Respondent had leased its workers from other employee-leasing companies. The evidence was not specific as to who those companies were. The evidence, while not specific, also suggested that Respondent paid its leased employees bonuses and sometimes loaned them money.1/ In general, employee-leasing agreements provide clerical duties to client companies including tax deduction and workers’ compensation, in exchange for a fee. Client companies’ workers who are registered with the leasing company are employees of the leasing company, not the client company. In this case, the specific contract between ELS and Respondent was not introduced into evidence. Likewise, neither the contract nor the proof of coverage between ELS and its workers’ compensation insurer was introduced into evidence and it is unknown who the actual workers’ compensation insurer was or is. Therefore, there is no credible evidence regarding the specific terms of the contract between ELS, Respondent or the workers’ compensation insurer. Importantly, there is no evidence regarding any fee arrangement between ELS and Respondent showing that workers’ compensation coverage was provided based on payroll or that direct payments to Respondent’s workers constituted payroll under the terms of the lease contract for which workers’ compensation had not been secured. Petitioner’s investigator telephoned ELS and learned from some person (purportedly Ellen Clark) that it did have an employee-leasing contract with Respondent and did maintain workers’ compensation on Respondent’s workers. The investigator was also told that ELS intended to or had cancelled its employee-leasing contract with Respondent effective either February 14 or 15, 2009. No one from ELS testified at the hearing and the substance of the above conversation, as with all the testimony about purported ELS statements, constitutes hearsay that was not corroborated by other credible evidence in the record. As such, the substance of these conversations is not found as facts, other than to establish that Petitioner’s investigator had a conversation with a person purporting to Represent ELS. However, on February 14, 2010, the investigator did not take any action against Respondent since he felt Respondent was in compliance with Florida’s workers’ compensation law. On February 17, 2009, Mr. Woodall again returned to the Cabrille Lane area and observed Respondent’s workers installing siding on a house. One of the workers, Mike Moore, revealed to Mr. Woodall that he was a subcontractor of Respondent, but that the other worker, Ryan Grantham, was Respondent’s employee. The subcontractor was in compliance with Florida’s workers’ compensation laws. In order to find out if the other worker was covered by workers’ compensation insurance, Mr. Woodall met with Ronnie Creed, Respondent’s owner and officer, who was exempt under Florida’s workers’ compensation law. Mr. Creed was unaware of Respondent’s workers’ compensation status but put Mr. Woodall in contact with his wife, India Creed, who was also exempt from Florida’s workers’ compensation law. Ms. Creed told Mr. Woodall that Respondent had received a letter from ELS that day, purportedly notifying it that ELS intended to cancel or had cancelled its employee-leasing contract with Respondent. The letter was not introduced into evidence and it is unclear whether the letter discussed the workers’ compensation insurance coverage ELS maintained on its employees that it leased to Respondent. Again, no one from ELS or its workers’ compensation insurer testified at the hearing regarding its lease or which workers were covered under the lease. The record is devoid of any evidence that these employees were no longer employed by ELS and, more importantly, not covered by ELS’s workers’ compensation coverage on February 17, 2009.2/ Mr. Woodall also checked the Department’s Coverage and Compliance Automated System (CCAS) database. CCAS is a database that maintains information on business entities in Florida and whether they have secured workers’ compensation and /or whether exemptions from workers’ compensation have been granted to eligible company officers. CCAS did not reflect that Respondent had a workers’ compensation insurance policy in place. However, the investigator did not check to see if ELS or another employee-leasing company had such a policy. Similarly, the investigator did not investigate the terms of those contracts and whether those contracts considered any bonuses or loans paid by Petitioner to its employees to be payroll, and if it was, whether any workers’ compensation coverage was dependent on such payments being reported to these companies. As such, the information in that system is hearsay which may or may not indicate a need to investigate further. Moreover, CCAS is simply a database of information reported by others and maintained by the Petitioner. Its reliability is questionable in this case given the multiple contractual entities involved in the provision of workers’ compensation to Respondent and the lack of any direct evidence from those contractual entities. Therefore, the fact that CCAS did not reflect that Respondent had workers’ compensation insurance is not given weight in this Order and is neither clear nor convincing evidence demonstrating that Respondent failed to secure workers’ compensation insurance on February 17, 2009, or for prior years. Based on his belief that Respondent had not secured workers’ compensation on its workers, Mr. Woodall issued a Stop- Work Order and Order of Penalty Assessment and a Request for Production of Business Records for Penalty Assessment Calculation to Respondent (Request) asking for Respondent’s business and financial records related to Respondent’s business and employee leasing for the last 3 years. The records were requested to construct Respondent’s alleged payroll and determine the employees of Respondent. There was no evidence that there was any inquiry into past employment leasing companies that Petitioner contracted with or the terms of those contracts. As with the contract with ELS, there was no inquiry into whether loans or bonuses or any other money paid by Respondent to its workers was considered payroll, required to be reported, or had any impact on workers’ compensation coverage that the leasing companies provided on the employees they leased to Respondent. Respondent complied with the Request and provided the requested business records to Petitioner. Mr. Woodall forwarded the financial records to Petitioner’s penalty calculator, Monica Moye. Beyond checking CCAS, Ms. Moye was not responsible for factually determining whether Respondent had properly secured workers’ compensation insurance during the period under review. Using Respondent’s financial records, Ms. Moye calculated a penalty to be assessed to Respondent based on class code 5645 for siding installation as established by the National Council on Compensation Insurance in the Scopes Manual. She also separated Respondent’s periods of alleged noncompliance based on periodically changing approved manual rates. Approved manual rates are set by the National Council on Compensation Insurance and represent the amounts employers would pay in workers’ compensation premiums for tasks performed by their employees. On March 13, 2009, Petitioner issued an Amended Order of Penalty Assessment, assessing a penalty of $159,002.46 to Respondent. Based on additional records submitted by Respondent, Petitioner recalculated the previously-assessed penalty and issued a 2nd Amended Order of Penalty Assessment to Respondent on June 9, 2009, reducing the assessed penalty to $130,914.99. Additionally, following the hearing, the Department revised the assessed penalty and issued a 3rd Amended Order of Penalty Assessment (3rd Amended Order) reducing the assessed penalty to $130,135.03.3/ The list of employees attached to the 3rd Amended Order of Penalty Assessment contains several incidents of imputed employment listed as “cash,” “unknown” or “Star H.” There is nothing in the record that supports a finding that these amounts were paid for employment purposes. However, the evidence did not establish that Petitioner did not secure workers’ compensation coverage and the issues regarding the correctness of the amount of penalty assessed against Respondent is not addressed in this Recommended Order. Since the evidence did not establish that Respondent failed to secure workers’ compensation, the Stop-work order should be cancelled and the 3rd Amended Order of Penalty Assessment dismissed.
Recommendation Based on the findings of fact and conclusions of law, it is RECOMMENDED that the Department of Financial Services enter a Final Order that Petitioner failed to establish by clear and convincing evidence that Petitioner failed to secure workers’ compensation to its employees and canceling the Stop Work Order and dismissing the 3rd Amended Order of Penalty Assessment. DONE AND ENTERED this 2nd day of April, 2010, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of April, 2010.
