The Issue What relief should the Florida Commission on Human Relations provide Petitioner to remedy the unlawful employment practice that Respondent admits that it committed by refusing to further consider Petitioner's application for employment as a correctional officer once it learned that Petitioner is an insulin-dependent diabetic?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: Petitioner's Employment at the South Florida Reception Center Petitioner previously worked full-time as a Correctional Officer I at the State of Florida Department of Corrections' (DOC's) South Florida Reception Center, a maximum security facility that houses convicted felons. Petitioner and his coworkers at times were asked to work double shifts. On several occasions, Petitioner was threatened with disciplinary action when he refused to work a second shift immediately following the completion of his regularly assigned shift. Prior to the expiration of his probationary period, Petitioner was advised that he was going to be fired. Petitioner requested, and was granted permission by the Superintendent of the facility, the opportunity to resign in lieu of termination. Petitioner resigned his position effective June 27, 1989. Petitioner's Application for Employment with Respondent In October of 1988, while still employed by DOC, Petitioner applied for a Correctional Officer I position with Respondent. Respondent's official job description for the position describes the nature of the work performed by Correctional Officer I's as follows: This is routine security work in maintaining order and discipline among prisoners held in County correctional facilities. Employees in this class are responsible for receiving and controlling prisoners, preventing escapes and enforcing departmental rules and regulations on an assigned shift at a County correctional facility. Duties include maintaining various records on prisoners, supervising work details, transporting prisoners to a variety of medical or correctional institutions, and ensuring the proper discharge of prisoners. Work occasionally involves an element of personal danger during emergencies and in controlling potentially violent prisoners. Duties are performed in accordance with established departmental regulations and security procedures. Supervision is received from a superior officer who reviews work for compliance with established rules and regulations. These duties are similar to those performed by correctional officers who work at the South Florida Reception Center. There was a delay in the processing of Petitioner's application for employment. On April 12, 1990, Iliana O. Garcia, a Personnel Specialist 2 with Respondent, sent Petitioner a letter, the body of which read as follows: We wish to take this opportunity to thank you for placing your application for the position of Correctional Officer 1 with our Department. The time and effort you devoted to your pursuit of this position is sincerely appreciated, however, at the present time, we regret that we are unable to consider your application further. Many exceptional candidates are seeking limited number of positions and this creates a very competitive situation. Please be assured that our decision in your case was based on very careful consideration of your application and qualifications in direct comparison with all others seeking the position and was not a judgment arrived at lightly. Thank you again for your demonstrated interest in our Department, and we wish you success in your endeavors. On May 9, 1990, Louvenia Lee, the Commander of Respondent's Human Resources Bureau, sent Respondent a follow-up letter explaining in greater detail why Respondent was no longer being considered for the position for which he had applied: On February 26, 1990 you were scheduled for a physical examination at Mt. Sinai Medical Center. This exam was another step in the hiring process for a Correctional Officer. However, on the basis of the physical exam, the results were disqualifying. Therefore, your application with the Corrections and Rehabilitation Department was discontinued. The disqualifying results are in accordance with the physical standards set forth in the California Commission on Peace Officer Standards and Training, Chapter IX-1. These standards are utilized by other law enforcement agencies in Metropolitan Dade County. Thank you again for your demonstrated interest in our Department and we wish you success in your endeavors. If I can be of further assistance, please contact me at 547-7052. The results of the physical examination that Petitioner had taken were "disqualifying" because they had revealed that Petitioner was an insulin- dependent diabetic. Lost Earnings Had Petitioner been selected to fill the position for which he had applied, he would have had to have first undergone four months of academy training, starting in late July or early August of 1990, before assuming the duties of a Correctional Officer I. He would have received a stipend of $400 for each month that he was in training. Had Petitioner successfully completed his academy training, he would have been placed on the payroll as a Correctional Officer I on December 3, 1990. Had Petitioner remained on the payroll as a Correctional Officer I from December 3, 1990, to January 3, 1993, 3/ he would have earned a total of $54,142.22 ($47,367.16 for the pay periods reflected on Petitioner's Exhibit 7; $804.83 for the two bonus payments reflected on Petitioner's Exhibit 7; $932.86 for the January 21, 1991, through February 3, 1993, pay period; $972.45 for the March 30, 1992, through April 12, 1992, pay period; and $4,064.92 for the four pay periods immediately following the October 26, 1992, through November 8, 1992, pay period). Mitigation At the time he learned that he was no longer being considered by Respondent as a candidate to fill the Correctional Officer I position for which he had applied, Petitioner had applications for employment pending with two other prospective employers, the City of Hollywood and the Metro Dade Police Department. Both applications were for law enforcement officer positions. In August or September of 1990, Petitioner was informed that neither the City of Hollywood nor the Metro Dade Police Department would be offering him a position. The City of Hollywood advised him that the position for hich he had applied had been filled by another of the over 100 applicants for the position. The Metro Dade Police Department told Petitioner that it could not hire him because he was an insulin-dependent diabetic. Some time shortly after receiving his rejection notice from Respondent, Petitioner applied for a correctional officer position with the Broward Sheriff's Office. He did not get the position. The explanation that he was given was that he had failed the polygraph test he had taken. At the outset of the 1990-1991 school year Petitioner began working as a substitute teacher for the Dade County School Board. He continued working as a substitute teacher during the remainder of the 1990-1991 school year, as well as the following school year. The work was sporadic. Frequently, he would not know until the morning of his teaching assignment that he had the opportunity to substitute teach that day. 25. In 1990, 1991 and 1992, Petitioner earned $694.00, $2,212.50 and $2,360.00, respectively, working as a substitute teacher for the Dade County School Board. In 1992, Petitioner also worked for Publix Super Markets, Inc. (hereinafter referred to as "Publix). His last day of work for Publix was August 14, 1992. Petitioner earned $2,063.78 working for Publix in 1992. From the date he was informed that Respondent had rejected him for employment until January 3, 1990 (hereinafter referred to as the "back pay period"), Petitioner was not otherwise gainfully employed, nor did he, with the exception noted above, seek other gainful employment. During the back pay period, there were various advertised openings for correctional officers at the South Florida Reception Center (hereinafter referred to as the "Center"). These positions offered considerably less pay than Petitioner would have received had be been hired by Respondent. Furthermore, the working conditions at the Center were far inferior to those he would have experienced working for Respondent as Correctional Officer I. Petitioner did not apply for any of these advertised positions because he reasonably believed that to do so would be an exercise in futility given that he had been constructively discharged in June of 1989, from a similar position at the Center. Attorney's Fees and Costs On March 25, 1992, after the Executive Director of the Commission had issued a Notice of Determination: Cause and conciliation efforts had failed, Petitioner executed the following written agreement to retain the law firm of Simon, Schindler and Sandberg, P.A., to represent him in the instant matter: I, the undersigned, do hereby retain and employ the law firm of: SIMON, SCHINDLER & SANDBERG, P.A. 1492 South Miami Avenue Miami, Florida 33130 as my attorneys to represent me, DONALD C. FERRARO, in the petition now pending before the Florida Commission on Human Relations. I fully understand that the fee is based upon an hourly rate of $250.00, which I am obligating myself to pay. I also agree to pay my said attorneys the sum of $100.00 for out-of-pocket expenses. You are authorized to pay or incur liability for all expenses . . . If bills are not paid when due, or a mutually agreeable payment schedule is not made and adhered to, I agree that my attorneys may withdraw as my counsel in any proceeding in which they represent me. Also I agree to bear the cost of collection, including a reasonable attorney's fees, and all other costs. I understand that I will be billed periodically both as to expenses and attorney's fees, and fully agree to pay said bill promptly upon receipt of same. In addition to any other lien contemplated hereunder, we are given a lien on the claim or cause of action, on the sum recovered by way of settlement, and on any judgment that may be recovered, for fees as well as any fund we may have advanced on your behalf for costs in connection with the cause of action. You agree that we have all general, possessory, or retaining liens, and all special or charging liens, known to the common law. If we use the services of an attorney to enforce the terms of this agreement, you agree to pay, in addition to all other sums due us, a reasonable attorney's fee for said enforcement. I further agree that you shall have the right to withdraw from my case: (a) If I do not make the required payments pursuant to this agreement; (b) if I have misrepresented or failed to disclose material facts to you; or (c) if I fail to follow your advice. In any of the foregoing events, I agree to execute any such documents permitting you to withdraw. The Attorney is an officer of the court and is bound by the rules regulating the Florida Bar. The client acknowledges and understands that while an attorney accepts this employment and promises to render professional legal services to the best of his ability during the continuation of this employment, that the attorney makes no warranties, representations or guarantees regarding the favorable outcome, result or successful termination of the representation and that this Retainer Agreement is not "contingent" thereon. The client agrees to fully cooperate with the attorney; to do nothing which would compromise the attorney's professional ethics; and not to request or require the attorney to do anything in violation of the Rules of Professional Conduct. If the client has misrepresented or failed to disclose any material facts, refuses to follow the attorney's advice, or fails to be available as necessary for preparation, conferences, depositions, hearings or other court proceedings, the attorney may withdraw from representation with leave of court. I acknowledge that you have made no representations or guarantees concerning the outcome of this case. I agree to the above terms and conditions of this Retainer Agreement and further acknowledge that I have received a copy thereof. Pursuant to this retainer agreement, the law firm of Simon, Schindler and Sandberg, P.A., (hereinafter referred to as the "Firm") provided Petitioner with legal representation in this matter. Roger J. Schindler, Esquire, a name partner in the Firm, was the most senior of the Firm's attorneys who worked on Petitioner's case. Schindler is a Florida-licensed attorney who has been practicing law in this state since the spring of 1970. He has litigated numerous civil rights actions. Schindler's hourly fee is $250.00. Through November 11, 1992, Schindler had reasonably spent 49.00 hours performing various tasks in connection with the instant case for which Petitioner has been billed $12,200.00 based upon a reasonable hourly fee of $250.00. Through November 11, 1992, Joe Constant, a Florida-licensed attorney and one of the Firm's associates, had reasonably spent 16.20 hours performing various tasks in connection with the instant case for which Petitioner has been billed $2,673.00 based upon a reasonable hourly fee of $165.00. Through November 11, 1992, another of the Firm's associate attorneys had reasonably spent one hour working on legal research done in connection with the instant case for which Petitioner has been billed $165.00 based upon a reasonable hourly fee of $165.00. Through November 11, 1992, a law clerk working for the Firm had reasonably spent 11.80 hours performing research-related tasks in connection with the instant case for which Petitioner has been billed $885.00 based upon a reasonable hourly fee of $75.00. The Firm has also billed Petitioner a total of $368.22 for costs reasonably incurred through November 11, 1992, in connection with the instant case. Through November 11, 1992, the Firm had billed Petitioner a total of $16,391.22 ($15,923.00 for attorney's fees and $368.22 for costs), but had not received any payments from Petitioner, notwithstanding that, under the retainer agreement, he was responsible to pay the Firm this entire amount regardless of the outcome of the instant case.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Florida Commission on Human Relations enter a final order (1) finding that Respondent committed the unlawful employment practice alleged in Petitioner's Petition for Relief, (2) prohibiting the practice, (3) awarding Petitioner back pay in the amount of $55,742.22, together with prejudgment interest thereon at the statutory rate of 12% per annum, (4) awarding Petitioner reasonable prehearing attorney's fees and litigation costs in the amount of $16,391.22 ($15,923.00 for fees and $368.22 for costs), and (5) awarding Petitioner reasonable attorney's fees and litigation costs for work performed, and costs incurred, by the Firm in connection with this case after November 11, 1992, in an amount to be determined by agreement of the parties or, in the absence of such agreement, by subsequent Commission order. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 26th day of February, 1993. STUART M. LERNER 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 26th day of February, 1993.
The Issue The issue is whether Respondent, Simpro Homes, Inc., conducted business operations in the State of Florida without obtaining workers’ compensation coverage meeting the requirements of Chapter 440, Florida Statutes, and, if so, whether the penalty in the amount of $326,861.58, was properly assessed by Petitioner, State of Florida, Department of Financial Services, Division of Workers’ Compensation, pursuant to Section 440.107, Florida Statutes, and Florida Administrative Code Chapter 69L.
Findings Of Fact Petitioner is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers' compensation for the benefit of their employees. § 440.107, Fla. Stat. Insurers are required by law to report all workers’ compensation policies to Petitioner. Respondent is a corporation domiciled in Georgia. Respondent is engaged in the business of framing, which is a construction activity, pursuant to Chapter 440, Florida Statutes, and Florida Administrative Code Rule 69L-6. On August 10, 2005, Petitioner's investigator, Allen DiMaria, visited 4307 Edgewater Drive, Jacksonville, Florida, on a random site visit, and interviewed a number of workers at the work site. Mr. DiMaria documented his investigation in the narrative of his Initial Investigative Report. Based upon these field interviews, Petitioner determined that the workers were employed by Respondent. Mr. DiMaria asked the superintendent on site whether Respondent had provided him with a certificate of liability insurance indicating workers’ compensation coverage, and was informed that Respondent had provided one. Mr. DiMaria was subsequently provided with the Certificate of Insurance by the general contractor on the work site. Mr. DiMaria also obtained a copy of Respondent’s workers’ compensation insurance policy which had a policy period of October 30, 2004, to October 30, 2005. The policy and the information contained in the Certificate of Insurance were consistent. Subsequent to the site visit, Mr. DiMaria continued the investigation of Respondent utilizing the Department’s Compliance and Coverage Automated System (“CCAS”) database that contains information on all workers' compensation insurance policy information from the carrier to an insured, and determined that Respondent did not have a State of Florida workers' compensation insurance policy. Petitioner, which maintains a database of all workers’ compensation exemptions in the State of Florida, also did not find any current, valid exemptions for Respondent. The St. Paul Travelers insurance policy held by Respondent at the time of Petitioner's site visit on August 10, 2005, did not contain an endorsement which utilizes Florida class codes, rates, rules, and manuals that comply with Chapter 440, Florida Statutes, and the Florida Insurance Code, satisfy the standard. Specifically, the insurance policy did not have Florida listed as a covered state under Section 3A. There is also no evidence that Respondent secured Section 3C coverage for Florida. The premium was based on a rate that was not the Florida premium rate and on a class code that was not indicative of the actual work being performed by Respondent. The policy shows that Respondent was insured for operations under National Council on Compensation Insurance (NCCI) class code 5645 at a premium utilizing Georgia premium rates. Class code 5645 refers to framing of one- or two- family homes. Mr. DiMaria utilized class code 5651 in his review of Respondent because Respondent was framing a dwelling that consisted of more than a two-family dwelling, pursuant to Florida Administrative Code Rule 69L-6.021(1). On August 11, 2006, after consulting with his supervisor, Mr. DiMaria issued and served on Respondent a stop- work order and order of penalty assessment for failure to comply with the requirements of Chapter 440, Florida Statutes, and more specifically on the grounds that Respondent did not secure the payment of workers’ compensation based on Florida class codes, rates, rules, and manuals. Employers on job sites in Florida are required to keep business records that enable Respondent to determine whether the employer is in compliance with the workers' compensation law. Mr. DiMaria issued a request for production of business records to Respondent on August 11, 2006. The request asked the employer to produce, for the preceding three years, documents that reflected payroll and proof of insurance. Respondent produced check stubs for a number of employees who were not on the investigated work site, and an affidavit that stated the employees on the work site were performing framing work for Respondent. Respondent failed to produce the requested records for the employees working in Florida. Hans Prosser, Respondent's president, testified that he had provided the records to his attorney who was charged with reviewing the records and turning them over to Petitioner. Apparently, the attorney never delivered the records to Petitioner. Once Respondent failed to provide the requested information, Petitioner imputed the payroll of the employees and calculated a penalty for the time period of August 11, 2002, through August 11, 2005. Mr. DiMaria assigned a class code to the type of work performed by Respondent utilizing the SCOPES Manual, multiplied the class code’s assigned approved manual rate by the imputed payroll per one hundred dollars, and then multiplied that by 1.5. The payroll was imputed back to October 1, 2003. Pursuant to Florida Administrative Code Rule 69L-6.028(4), for the period prior to October 1, 2003, Petitioner assessed a penalty of $100 per day for each calendar day of noncompliance. The Amended Order of Penalty Assessment ("Amended Order") which assessed a penalty of $327,969.47, was served on Respondent on September 1, 2005. The Department issued and served a second Amended Order of Penalty Assessment (“Second Amended Order”) with an assessed penalty of $326,861.58, via a Motion to Amend Order of Penalty Assessment to Respondent on January 6, 2006. The reduction was the result of an error in the calculation of the penalty in the Amended Order. The motion was granted by this Administrative Law Judge on March 20, 2006. Respondent contends that it had been dissolved as a corporation on February 24, 2001, and was reinstated as a corporation on January 23, 2003, and thus should not be penalized for any time prior to that date. In support of this contention, Respondent offered into evidence a certified copy of a document entitled "Certificate of Reinstatement," demonstrating that Respondent had been administratively dissolved on February 24, 2001, "for failure to comply with the requirements of Title 14 of the Official Code of Georgia Annotated." The document further explains that all taxes have been paid and that Respondent "may resume its business as if the administrative dissolution had never occurred." This document was not presented to counsel for Petitioner prior to the final hearing as required by the Order of Pre-hearing Instructions issued in this matter.
Recommendation Based on the Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Assessment Order assessing a penalty of $326,861.58. DONE AND ENTERED this 4th day of August, 2006, in Tallahassee, Leon County, Florida. S ROBERT S. COHEN 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 4th day of August, 2006. COPIES FURNISHED: Colin M. Roopnarine, Esquire Department of Financial Services Division of Workers' Compensation 200 East Gaines Street Tallahassee, Florida 32399-4229 Hans Prosser Simpro Homes, Inc. 5055 Old Winder Highway Braselton, Georgia Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Carlos G. Muñiz, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Whether Royal Roofing and Restoration, Inc. (Respondent or Royal Roofing), failed to secure workers’ compensation insurance coverage for its employees; and, if so, whether the Department of Financial Services, Division of Workers’ Compensation (Petitioner or Department), correctly calculated the penalty to be assessed against Respondent.
Findings Of Fact Petitioner is the state agency charged with enforcing the requirement of chapter 440, that Florida employers secure workers’ compensation coverage for their employees. § 440.107(3), Fla. Stat. Respondent is a Florida for-profit corporation organized on July 28, 2015, and engaged in the business of roofing and storm damage restoration. The company was formed, and initially conducted business, in Tallahassee, Florida, but expanded to the Panama City area in 2016. Traci Fisher is Respondent’s President and Registered Agent, with a mailing address of 1004 Kenilworth, Tallahassee, Florida 32312. DOAH Case No. 17-0879 On May 4, 2016, Department Compliance Investigator Jesse Holman, conducted a routine workers’ compensation compliance inspection at 374 Brown Place in Crestview, Florida. Mr. Holman observed four men removing shingles from the roof of a residential structure at that address. Mr. Holman first interviewed a worker who identified himself as Dustin Hansel and reported that he and the other three workers on site were a new crew for Respondent, the permit for the job had not yet been pulled, and the workers were not aware of the rate of pay for the job. Mr. Hansel telephoned Respondent’s sales manager, Dillon Robinson, who then spoke directly with Mr. Holman via telephone. Mr. Robinson informed Mr. Holman that Respondent obtained workers’ compensation coverage through Payroll Management Inc. (PMI), an employee-leasing company. Mr. Holman identified the three remaining workers at the jobsite as Milton Trice, Winston Perrotta, and Kerrigan Ireland. Mr. Holman contacted PMI and secured a copy of Respondent’s then-active employee roster. None of the workers at the jobsite, including Mr. Hansel, were included on Respondent’s employee roster. Upon inquiry, Mr. Holman was informed that PMI had no pending employee applications for Respondent. Mr. Holman consulted the Department’s Coverage Compliance Automated System (CCAS) and found Respondent had no workers’ compensation insurance policy and no active exemptions. During Mr. Holman’s onsite investigation, the workers left the jobsite. Mr. Holman could not immediately reach Ms. Fisher, but did speak with her husband, Tim Fisher. Mr. Fisher informed Mr. Holman that the crew was on their way to the PMI Fort Walton office to be enrolled on Respondent’s employee roster. On May 5, 2016, based on his investigation, and after consultation with his supervisor, Mr. Holman issued Respondent Stop-Work Order (SWO) 16-148-1A, along with a Business Records Request (BRR) for records covering the audit period of July 27, 2015 through May 4, 2016. Later that day, Mr. Holman spoke to Ms. Fisher, who informed him the crew did not have permission to begin the work on that date, as she had not yet pulled the permit for the reroof. Ms. Fisher further explained that the crewmembers had been instructed to complete applications with PMI prior to departing Tallahassee for Crestview. Ms. Fisher confirmed the crewmembers were completing applications at PMI Fort Walton that same day. Mr. Holman met with Ms. Fisher the following day and personally served SWO 16-148-1A. Ms. Fisher delivered to Mr. Holman an updated employee roster from PMI which included Mr. Hansel, Mr. Perrotta, and Mr. Ireland; a letter documenting Mr. Trice was not employed by Respondent; and a $1000 check as downpayment on the penalty. Respondent initially submitted business records in response to the BRR on May 23 and 25, 2017. DOAH Case No. 17-1558 On June 8, 2016, Mr. Holman conducted a random workers’ compensation compliance inspection at 532 Rising Star Drive in Crestview. The single-family home at that address was undergoing renovations and Mr. Holman observed three men on the roof removing shingles. None of the men on the roof spoke English, but a fourth man, who identified himself as Jose Manuel Mejia, appeared and stated he worked for Respondent, and that all the workers onsite were paid through PMI at a rate of $10.00 per hour. Mr. Mejia admitted that one of the worker’s onsite, Emelio Lopez, was not enrolled with PMI and explained that Mr. Mejia brought him to the worksite that day because he knew Mr. Lopez to be a good worker. The remaining workers onsite were identified as Juan Mencho and Ramon Gonzalez, both from Atlanta, Georgia. Mr. Mejia produced some PMI paystubs for himself and Mr. Mencho. Mr. Mejia stated that he and his crews also received reimbursement checks directly from Respondent for gas, rentals, materials, and the like. Mr. Holman contacted PMI, who produced Respondent’s then-active employee roster. Mr. Mejia and Mr. Mencho were on the roster, but neither Mr. Gonzalez nor Mr. Lopez was included. Mr. Holman next contacted Ms. Fisher, who identified Mr. Mejia as a subcontractor, but was not familiar with any of the other men Mr. Holman encountered at the worksite. Mr. Holman consulted via telephone with his supervisor, who instructed him to issue an SWO to Respondent for failing to secure workers’ compensation coverage for its employees. Mr. Holman issued SWO 16-198-1A by posting the worksite on June 8, 2016. Department Facilitator Don Hurst, personally served Ms. Fisher with SWO 16-198-1A in Tallahassee that same day. SWO 16-148-1A Penalty Calculation1/ Department Penalty Auditor Eunika Jackson, was assigned to calculate the penalties associated with the SWOs issued to Respondent. On June 8, 2016, Ms. Jackson began calculating the penalty associated with SWO 16-148-1A. Ms. Jackson reviewed the documents submitted by Respondent in response to the BRR. The documents included Respondent’s Wells Fargo bank statements, check images, and PMI payroll register for the audit period.2/ Based on a review of the records, Ms. Jackson identified the following individuals as Respondent’s employees because they received direct payment from Respondent at times during the audit period: David Rosinsky, Dylan Robinson, Jarod Bell, Tommy Miller, and David Shields. Ms. Jackson determined periods of non-compliance for these employees based on the dates they received payments from Respondent and were not covered for workers’ compensation via PMI employment roster, separate policy, or corporate officer exemption. Ms. Jackson deemed payments to each of the individuals as gross payroll for purposes of calculating the penalty. Based upon Ms. Fisher’s deposition testimony, Ms. Jackson assigned National Council on Compensation Insurance (NCCI) class code 5551, Roofing, to Mr. Miller; NCCI class code 5474, Painting, to Mr. Rosinsky; NCCI class code 8742, Sales, to Mr. Bell and Mr. Robinson; and NCCI class code 8810, clerical office employee, to Mr. Shields. Utilizing the statutory formula for penalty calculation, Ms. Jackson calculated a total penalty of $191.28 associated with these five “employees.” Ms. Jackson next calculated the penalty for Dustin Hansel, Kerrigan Ireland, Milton Trice, and Winston Perrotta, the workers identified at the jobsite as employees on May 4, 2016. The Department maintains that the business records submitted by Respondent were insufficient to determine Respondent’s payroll to these “employees,” thus, Ms. Jackson used the statutory formula to impute payroll to these workers. Ms. Jackson calculated a penalty of $14,970.12 against Respondent for failure to secure payment of workers’ compensation insurance for each of these four “employees” during the audit period. The total penalty associated with these four “employees” is $59,880.48. Ms. Jackson calculated a total penalty of $60,072.96 to be imposed against Respondent in connection with SWO 16-148- 1A. Business Records In compliance with the Department’s BRR, Respondent submitted additional business records on several occasions-- March 21, May 3 and 31, June 7, and August 15 and 24, 2017--in order to establish its complete payroll for the audit period. While the Department admits that the final documents submitted do establish Respondent’s complete payroll, the Department did not issue amended penalty assessment based on those records in either case. The Department maintains Respondent did not timely submit records, pursuant to Florida Administrative Code Rule 69L-6.028(4), which allows an employer 20 business days after service of the first amended order of penalty assessment to submit sufficient records to establish payroll. All business records submitted by Respondent were admitted in evidence and included as part of the record. The undersigned is not limited to the record before the Department at the time the amended penalty assessments were imposed, but must determine a recommendation in a de novo proceeding. The undersigned has relied upon the complete record in arriving at the decision in this case. Penalty Calculation for Ireland, Trice, and Perrotta For purposes of workers’ compensation insurance coverage, an “employee” is “any person who receives remuneration from an employer” for work or services performed under a contract. § 440.02(15)(a), Fla. Stat. Respondent did not issue a single check to Mr. Ireland, Mr. Trice, or Mr. Perrotta during the audit period. Mr. Ireland, Mr. Trice, and Mr. Perrotta are not included on any PMI leasing roster included in the record for the audit period. The uncontroverted evidence, including the credible and unrefuted testimony of each person with knowledge, established that Mr. Ireland, Mr. Trice, and Mr. Perrotta were newly hired for the job in Crestview on May 4, 2016, and began working that day prior to submitting applications at PMI, despite Ms. Fisher’s directions otherwise. Petitioner did not prove that either Mr. Ireland, Mr. Trice, or Mr. Perrotta was Respondent’s employee at any time during the audit period. Petitioner did not correctly calculate the penalty of $44,911.26 against Respondent for failure to secure workers’ compensation insurance for Mr. Ireland, Mr. Trice, and Mr. Perrotta during the audit period. Penalty Calculation for Hansel Ms. Fisher testified that Mr. Hansel has owned several businesses with which Respondent has conducted business over the years. Originally, Mr. Hansel owned a dumpster rental business, now owned by his father. Mr. Hansel also owned an independent landscaping company with which Respondent occasionally transacted business. When Respondent expanded business into the Panama City area, Ms. Fisher hired Mr. Hansel as a crew chief to supervise new crews in the area. The job on May 4, 2016, was his first roofing job. A review of Respondent’s records reveals Respondent issued the following checks to Mr. Hansel during the audit period: December 4, 2015, in the amount of $360, $300 of which was for “dumpster rental” and the remaining $60 for “sod”; May 4, 2016, in the amount of $200 for “sod repair”; May 6, 2016, in the amount of $925 as reimbursement for travel expenses; May 9, 2016, in the amount of $1,011.50 (with no memo); and May 21, 2016, in the amount of $100 for “7845 Preservation.” Mr. Hansel was included on Respondent’s PMI leasing roster beginning on May 13, 2016. Petitioner proved that Mr. Hansel was Respondent’s employee at times during the audit period. Petitioner did not prove that Respondent’s records were insufficient to determine payroll to Mr. Hansel during the audit period, which would have required an imputed penalty. Petitioner did not correctly calculate the penalty of $14,970.42 against Respondent for failure to secure workers’ compensation insurance coverage for Mr. Hansel during the audit period. Sod repair by Mr. Hansel is a service performed for Respondent during the audit period. Reimbursement of travel expenses is specifically included in the definition of payroll for purposes of calculating the penalty. See Fla. Admin. Code R. 69L- 6.035(1)(f) (“Expense reimbursements, including reimbursements for travel” are included as remuneration to employees “to the extent that the employer’s business records and receipts do not confirm that the expense incurred as a valid business expense.”). Dumpster rental is neither work performed on behalf of, nor service provided to, Respondent during the audit period. The correct uninsured payroll amount attributable to Mr. Hansel is $2,296.50. Petitioner correctly applied NCCI class code 5551, Roofing, to work performed by Mr. Hansel based on the observation of Mr. Holman at the worksite on May 4, 2016. With respect to Mr. Hansel’s services for sod and sod repair, Petitioner did not correctly apply NCCI class code 5551. Petitioner did not introduce competent substantial evidence of the applicable NCCI class code and premium amount for landscaping services performed during the audit period.3/ Uninsured payroll attributable to Mr. Hansel for roofing services during the audit period is $2,036.50. The approved manual rate for workers’ compensation insurance for NCCI class code 5551 during the period of non- compliance--May 9 and 21, 2016--is $18.60. The premium amount Respondent would have paid to provide workers’ compensation insurance for Mr. Hansel is $378.79 (One percent of Mr. Hansel’s gross payroll during the non-compliance period--$20.36--multiplied by $18.60). The penalty for Respondent’s failure to secure worker’s compensation coverage insurance for Mr. Hansel during the period of non-compliance is calculated as two times the amount Respondent would have paid in premium for the non- compliance period. The correct penalty for Respondent’s failure to maintain workers’ compensation coverage for Mr. Hansel during the period of non-compliance is $757.58. Penalty Calculation for Salesmen Independent contractors not engaged in the construction industry are not employees for purposes of enforcing workers’ compensation insurance requirements. See § 440.02(15)(d)1., Fla. Stat. Sales is a non-construction industry occupation. The Department calculated a penalty associated with payroll attributable to the following persons identified by Ms. Fisher as independent salesmen: Dylan Robinson, Kevin Miller, Marc Medley, Mike Rucker, Colby Fisher, David Jones, Jarod Bell, Matt Flynn, and Todd Zulauf. Section 440.02(15)(d)1. provides that an individual may be an independent contractor, rather than an employee, as follows: 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. Ms. Fisher testified that each of the above-named salesmen sold roofing jobs for her at various times during the audit period on a commission-only basis. The contractors inspect homeowner roofs, draft schematics, use their own equipment (e.g., drones), incur all of their own expenses, and handle the insurance filing for the homeowner’s insurance to pay on the claim. Ms. Fisher further testified that each of the salesmen also sells for other roofing contractors in the Tallahassee area. She pays the salesmen on a per-job basis. Ms. Fisher does not compensate the salesmen for the time involved in inspecting a roof, preparing schematics, or making the sale. Nor does Ms. Fisher reimburse the salesmen for travel to sales jobsites. Ms. Fisher’s testimony was credible, persuasive, and uncontroverted. Respondent introduced in evidence four “Independent Contractor Checklists” allegedly completed by Mr. Robinson, Mr. Medley, Mr. Fisher, and Mr. Flynn. Each form checklist follows the format of section 440.02(15)(d)1., listing the criteria set forth in subparagraphs a. and b. The forms indicate that they each meet all the criteria listed in subparagraph b.: they perform, or agree to perform services for a specific amount of money and control the means of performing the service; they incur the principal expenses related to the service performed; they are responsible for satisfactory completion of the services performed; they receive compensation for the services performed on a per-job or commission basis; they may realize a profit or suffer a loss in connection with performing the services; they have continuing and recurring business liabilities or obligations; and the success or failure of their business depends on the relationship of business receipts to expenditures.4/ In its Proposed Recommended Order, Petitioner conceded the nine men identified by Respondent as independent sales contractors “would not be considered employees of Respondent” because the “salesmen would seem to meet the majority of [the] requirements [of section 440.02(15)(d)1.b.].” Respondent issued Dylan Robinson, Mark Medley, Colby Fisher, Matt Flynn, Kevin Miller, Mike Rucker, Jarod Bell, David Jones, and Todd Zulauf an IRS FORM 1099-MISC for income paid during the 2016 tax year. Respondent did not prove by clear and convincing evidence that the above-named salesmen were Respondent’s employees during the audit period. For SWO 16-148-1A, Respondent did not correctly calculate the penalty because Respondent included a penalty associated with Petitioner’s failure to provide workers’ compensation insurance coverage for Dylan Robinson and Jarod Bell. Penalty in the amount of $20.70 associated with Dylan Robinson and Jarod Bell should not be included in the total penalty. The correct penalty amount for SWO 16-148-1A, based on records submitted by Respondent on or before March 20, 2016, is $929.16. Draft Revised Second Amended Order of Penalty Assessment The additional records submitted by Respondent revealed payments made to persons during the audit period who were not included in the Department’s Second Amended Order of Penalty Assessment. The Department and Respondent disagreed at hearing whether the payments qualified as payroll. At hearing, Petitioner submitted a draft revised second amended penalty calculation for SWO 16-148-1A based on all records received from Respondent. The revised penalty is in the amount of $61,453.50. Ms. Jackson populated the spreadsheet with the name of every individual to whom a check was written on Respondent’s business bank account during the audit period, removing only those payments to individuals and entities which, to Petitioner’s knowledge, were not Respondent’s employees. Respondent’s calculations in the revised penalty suffer from some of the same errors as in the second amended penalty calculation--they include individuals Petitioner did not prove were Respondent’s employees, as well as payments which were not uninsured payroll. For the reasons explained herein, Petitioner did not prove that salesmen David Jones, Dylan Robinson, Jarod Bell, Kevin Miller, Mark Medley, Matt Flynn, Mike Rucker, Tim Fischer, and Colby Fisher were Respondent’s employees during the audit period. Respondent did not accurately calculate the penalty associated with those persons. Respondent made payments to David Shields during the audit period, which the Department argues should be included as payroll. The Department included payments to Mr. Shields in its draft revised second amended order of penalty assessment and assigned NCCI class code “8810” for clerical work. Mr. Shields is a licensed professional roofing contractor who acts as “qualifier” for Respondent’s business. A qualifier is a licensed professional who certifies plans for permit applications submitted by another business. Respondent pays Mr. Shields a flat fee per permit application qualified by him. The record evidence does not support a finding that Mr. Shields provides clerical services to Respondent. Mr. Shields provides some sort of professional services to Respondent, and is likely an independent contractor providing his own materials and supplies, maintaining his own business accounts, and liable for his own business success. Assuming Mr. Shields were Respondent’s employee, the Department introduced no evidence of an appropriate NCCI class code for Mr. Shields’ services. The Department did not prove that payments to Mr. Shields should be included as Respondent’s uninsured payroll during the audit period. Respondent paid Susan Swain a total of $258 during the audit period for clerical work. Ms. Fisher maintained Ms. Swain’s work was casual at first, and the payments reflect a time when she worked on-again, off-again, handling the paperwork for restoration insurance claims. Later, Ms. Swain came to work for Respondent full-time and was added to the PMI leasing roster. Section 440.02(15)(d)5. provides that a person “whose employment is both casual and not in the course of the trade, business, profession or occupation of the employer” is not an employee. The statute defines “casual” employment as work that is anticipated to be completed in 10 working days or less and at a total labor cost of less than $500. See § 440.02(5), Fla. Stat. In its Proposed Recommended Order, the Department argues Ms. Swain’s wages should be included as payroll because the “testimony regarding Ms. Swain does not suggest that she was employed for less than 10 days[.]” However, it was the Department’s burden to prove that Ms. Swain was a statutory employee. The Department did not prove that Ms. Swain’s wages should be included within Respondent’s uninsured payroll. The largest portion of the penalty assessed by the Department, as well as in the draft revised second amended penalty assessment, against Respondent is in connection with various roofers who were employed by Respondent at times during the audit period. Each of the roofers was included on Respondent’s PMI leasing roster, but received checks directly from Respondent in addition to PMI payroll checks. The Department included all the direct payments to those roofers as payroll for purposes of calculating a penalty in this case. As Ms. Fisher explained, the company bids a reroof on a per job basis--usually a per square foot price. Ms. Fisher adds each roofing contractor’s name to the PMI leasing roster to ensure that each roofer is covered by workers’ compensation insurance for the duration of the job. When the job is completed (which is a matter of just a few days), the contractor reports to Ms. Fisher what amount of the contract price was spent on materials, supplies, or other non-labor costs. Ms. Fisher cuts a check to the contractor for that amount and authorizes PMI to issue payroll checks for the “labor cost” (the difference between the contract price and the non-labor costs). Ms. Fisher refers to this process as “back-charging” the contractors for their materials, maintenance, tools, and other non-labor costs. The Department is correct that the direct payments are payroll to the roofing contractors. See Fla. Admin. Code R. 69L-6.035(1)(b) and (h) (remuneration includes “payments, including cash payments, made to employees by or on behalf of the employer” and “payments or allowances made by or on behalf of the employer for tools or equipment used by employees in their work or operations for the employer.”). The Department would be correct to include these payments in the penalty calculation if they represented uninsured payroll. However, the evidence supports a finding that the direct payments to the roofing contractors were made for the same jobs on which Respondent secured workers’ compensation coverage through PMI. The roofing contractors were covered for workers’ compensation throughout the job, even though they may have received partial payment for the job outside of the PMI payroll checks.5/ The direct payments were not for separate reroofs on which the roofers were not otherwise insured. The Department did not correctly calculate penalties associated with the following roofing contractors: Donald Tontigh, Joseph Howard, Keith Mills, Aaron Kilpatrick, Gustavo Tobias, Jose Mejia, and Tommy Miller. Ms. Fisher also received cash payments from Respondent during the audit period. These payments were made in addition to her payroll through PMI. Ms. Fisher described these payments as “cash tickets,” which were paid outside of her PMI payroll to reimburse her for investments made in the company. For purposes of calculating the penalty in this case, these “cash tickets” are clearly payroll, as that term is to be calculated pursuant to rule 69L-6.035. Similar to the issue with the roofing contractors, the question is whether the payments represent uninsured payroll. Ms. Fisher did not hold a corporate officer exemption at any time relevant hereto. Ms. Fisher testified that she was covered through PMI payroll leasing. In contrast to the roofing contractors, Ms. Fisher’s direct payments do not directly coincide with any particular job or specific time frame during which Ms. Fisher was covered for workers’ compensation insurance through PMI. The evidence was insufficient to determine that the amounts were insured payroll. The Department properly calculated a penalty associated with payroll attributable to Ms. Fisher. Respondent made one payment of $75 to Donald Martin during the audit period. The Department calculated a penalty of $27.90 associated with this payment to Mr. Martin. Ms. Fisher explained that Mr. Martin was a down-on-his-luck guy who came by the office one day complaining that Mr. Hansel owed him some money. Ms. Fisher offered to put him on a roofing crew and wrote him the $75 check to help him out. Ms. Fisher’s testimony was both credible and unrefuted. Mr. Martin was never hired by Respondent, put on any roofing crew, or added to the PMI leasing roster. Mr. Martin was not Respondent’s employee because he did not receive remuneration for the “performance of any work or service while engaged in any employment under any appointment or contract for hire” with Respondent. § 440.02(15)(a), Fla. Stat. Cale Dierking works for Respondent full-time in a clerical position. During the audit period, Respondent paid Mr. Dierking directly by check for $1,306.14. This payment was made outside of Mr. Dierking’s PMI payroll checks. Ms. Fisher testified that she paid Mr. Dierking directly on one occasion when “PMI’s payroll got stuck in Memphis, I believe it was a snow-in situation where payroll checks didn’t come.” Rather than ask her employee to go without a timely paycheck, she advanced his payroll. Ms. Fisher’s testimony was both credible and unrefuted. The payment to Mr. Dierking is clearly payroll. However, Mr. Dierking was covered for workers’ compensation through PMI for the period during which the check was issued. Thus, there is no evidence that it was uninsured payroll. The Department did not correctly calculate a penalty associated with payments to Mr. Dierking. The correct penalty to be assessed against Respondent for failure to secure workers’ compensation coverage for its employees during the audit period in connection with SWO 16-148- 1A is $770.60. Penalty Calculation for SWO 16-198-1A Ms. Jackson calculated a total penalty against Respondent in connection with SWO 16-198-1A in the amount of $19,115.84, as reflected in the Second Amended Order of Penalty Assessment. The Department correctly imputed penalty against Respondent in the amount of $91.68 each for uninsured payroll to Mr. Gonzalez and Mr. Lopez. The evidence supported a finding that these workers were Respondent’s statutory employees on June 8, 2016, and were not enrolled on the PMI leasing roster. The Department did not correctly calculate the penalty associated with salesmen Dylan Robinson, Jarod Bell, Kevin Miller, Mark Medley, Matt Flynn, and Todd Zulauf. The Department did not correctly calculate the penalty associated with roofing contractors Abraham Martinez- Antonio, Edwin Kinsey, Dustin Hansel, Efrian Molina-Agustin, Jose Mejia, Joseph Howard, Keith Mills, Samuel Pedro, and Tommy Miller. The Department did not correctly calculate the penalty against Respondent associated with Mr. Shields, Respondent’s qualifier. Based on a review of Respondent’s complete “untimely” records, the Department discovered direct payments made to additional employees not included on the Second Amended Order of Penalty Assessment. Respondent made a direct payment to Ethan Burch in the amount of $602.50 during the audit period. Ethan Burch is one of Respondent’s full-time clerical employees. The evidence is insufficient to determine whether the payment of $602.50 was insured or uninsured payroll. As such, the Department did not prove it correctly calculated the penalty associated with Mr. Burch. Respondent also made a direct payment to Chelsea Hansel in the amount of $965 during the audit period. Ms. Hansel is another clerical employee. Ms. Hansel’s PMI enrollment was delayed due to some background investigation. Respondent paid Ms. Hansel for work she completed prior to enrollment. The direct payment to Ms. Hansel constitutes uninsured payroll. The Department correctly calculated the penalty associated with the payment to Chelsea Hansel. The correct penalty amount to be imposed against Respondent for failure to secure payment of workers’ compensation coverage for its employees (Gonzalez, Lopez, and Chelsea Hansel) during the audit period in connection with SWO 16-198-1A is $187.80.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Financial Services, Division of Workers’ Compensation, finding that Royal Roofing and Restoration, Inc., violated the workers’ compensation insurance law and, in DOAH Case No. 17-0879, assessing a penalty of $770.60; and in DOAH Case No. 17-1558, assessing a penalty of $187.80. DONE AND ENTERED this 24th day of January, 2018, in Tallahassee, Leon County, Florida. S SUZANNE VAN WYK 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 24th day of January, 2018.
Findings Of Fact Prior to April 21, 1976, Gordon C. Barton had been employed by the City of Eustis Police Department for approximately six (6) years. At the time of his discharge in May, 1976, he had attained the rank of sergeant. As a sergeant, he was responsible for one of three patrol shifts, each consisting of three patrolmen. The City of Eustis Police Department consists of twenty-one (21) certified law enforcement officers and other support personnel. Authority over the department rests in the city manager under the city charter, while administration of the police department is the responsibility of the chief of police. The procedures governing, the employment relationship between and employee of the city and the city are set forth in the city charter (Respondent's Exhibit 14), the rules and regulations governing conduct, duties and procedures of Eustis Police Department (Respondent's Exhibit 13), and city ordinance 409 (Union's Exhibit 2). In February, after some discussion with his patrol sergeants, the chief of police had adopted a modification of the department's radio procedures. In early March, 1976, after some experience with the new procedures, Sergeant Barton discussed the subject of problems arising out of the change in radio procedures with Assistant Chief Horner. Horner suggested that Barton reduce his comments to writing because the chief was out of town and that Horner would present the matter to the chief upon his return. Barton authored the memorandum to the chief on March 3, 1976. The memorandum expressed concern with the safety and efficiency of the modified radio procedures. On the date the memorandum was prepared, Barton showed the memorandum to the sergeant relieving him who expressed to Barton the fact that he concurred in Barton's observations and wished to co-sign the memorandum. Barton assented to this and eventually the signatures of thirteen (13) additional police officers were placed on the back of the memorandum. On March 12, 1976, Sergeant Barton was called into Chief Burrows' office. Burrows asked Barton to express his views concerning the modified communications procedure. Sergeant Barton explained the problems that he and other were having with it. The chief criticized Barton for having publicized the contents of the memorandum by making it available to other officers for their signature. The chief's criticism of Barton for having allowed others to sign the memorandum caused an emotional exchange between the men. In late March, the chief learned from other police officers in the department that Sergeant Barton had solicited fellow police officers who were on duty in behalf of the West Central Florida Police Benevolent Association. In late March, the chief advised the city manager and city attorney that he desired to discharge Barton. He was requested by the city manager and city attorney to provide them with information on Barton's conduct upon which the termination was to be based. The chief prepared a memorandum to the city manager (General Counsel's Exhibit 3), and several meetings were held between the chief, city manager, and city attorney. Their evaluation of the grounds asserted by the chief for Barton's discharge resulted in a letter of discharge dated April 20, 1976, which was signed and delivered to Barton by the chief of police, prepared by the city attorney, and approved by the city manager. This letter was delivered to Barton on April 21, 1976, while Barton was waiting to go on duty at 3:00 P.M. When asked for some justification of his termination, Barton was told by Burrows that if Barton requested in writing the grounds for the discharge that Burrows would look it over. Notations on the memorandum prepared by the chief and submitted to the city manager and city attorney and the testimony of the city manager indicate that four of the paragraphs in the letter of discharge relate to the memorandum authored by Barton and signed by his fellow officers. Police Chief Burrows freely admitted that the preparation and submission of the memorandum signed by the police officers was one of she reasons for the termination of Barton. The City of Eustis is a public employer as defined by Chapter 447, Florida Statutes. The Charging Party, West Central Florida Police Benevolent Association, is a labor organization as defined under the act. The Charging Party was not the "organization", however, with which the public employer interfered. The organization which was interfered with was the group which signed the memorandum. It was not the group which was interfered with which brought the unfair labor practice charge.
Recommendation Based upon the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that the Public Employees Relations Commission enter its order directing the following: That the City of Eustis offer Gordon C. Barton immediate and full reinstatement to his former position of employment, or if such employment no longer exists, to reemploy Barton in a substantially equivalent position without prejudice to his seniority or rights or privileges, and to make him whole for any loss of earnings he may have suffered by reason of the discrimination against him. Such back pay shall include interest at a rate of 6 percent per annum and computed quarterly and in accordance with the formula set forth in F. W. Woolworth Company, 90 NLRB 289 (1949); Pasco Classroom Teacher's Association, PERC Case No. 8H-CA-754-1037 (Order No. 76U-875) (April 1, 1976); and Post at its facilities, in conspicuous places, including all places where notices to employees are usually posted, on forms to be provided by PERC, a notice stating that all public employees have the right to form, join, and participate in, or to refrain from forming, joining, or participating in any employer organization of their own choosing and may not be discharged or otherwise discriminated against because of their exercise of these rights. DONE and ORDERED this 8th day of June, 1977, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: C. Anthony Cleveland, Esquire Public Employees Relations Commission Suite 300, 2003 Apalachee Parkway Tallahassee, Florida 32301 Norman F. Burke, Esquire Van Den Berg, Gay & Burke, P.A. 16 South Magnolia Avenue Post Office Box 793 Orlando, Florida 32801 Ben R. Patterson, Esquire 1215 Thomasville Road Tallahassee, Florida 32303
The Issue The issues are whether Respondent conducted business operations in Florida without obtaining workers’ compensation coverage that met the requirements of Chapter 440, Florida Statutes (2009), for its employees, and if so, what penalty should be assessed.
Findings Of Fact Petitioner is the state agency that is responsible for enforcing Chapter 440, Florida Statutes, which requires employers to secure the payment of workers’ compensation for the benefit of their employees. Respondent is a Louisville, Kentucky-based corporation that is engaged in the construction, maintenance, and painting of elevated water tanks. Respondent has a second fabrication facility located in Newnan, Georgia. Respondent’s work constitutes construction. On March 4, 2010, Petitioner’s investigator, Lawrence F. Eaton, observed Respondent’s employees working on a water tower in Pace, Florida. While visiting the worksite, one of Respondent’s employees stated that he did not have any information regarding if and how the men were covered by workers’ compensation. The employee gave Mr. Eaton a telephone number for Respondent. Next, Mr. Eaton consulted the Kentucky Secretary of State website to find information concerning the corporate status of Respondent. The website indicated that Respondent was incorporated in 1892 and that it had three corporate officers. Mr. Eaton then consulted Petitioner’s Coverage and Compliance Automated System (CCAS) database. CCAS contains workers’ compensation policy information for each employer that has a Florida policy and information relative to workers’ compensation exemptions that have been applied for and issued to individuals by Petitioner. Mr. Eaton was unable to find any indication on CCAS that Respondent had secured workers’ compensation coverage by purchasing a Florida policy. CCAS also provided no evidence that Respondent had entered into an arrangement with an employee leasing company to provide workers’ compensation coverage to its employees. Additionally, CCAS did not show that Respondent had obtained exemptions for its corporate officers. Mr. Eaton subsequently spoke with one of Respondent’s representatives. Mr. Eaton was informed that Respondent was self-insured for workers’ compensation in Kentucky. Mr. Eaton also learned that Respondent had another workers’ compensation policy. Respondent’s representative indicated that she would send Mr. Eaton the policy paperwork. When he received the paperwork from Petitioner, Mr. Eaton determined that the insurance coverage did not comply with the requirements of Florida’s workers’ compensation law. The paperwork included an excess policy of workers’ compensation and a Georgia workers’ compensation policy. On March 5, 2010, Mr. Eaton issued a Stop-Work Order and Order of Penalty Assessment against Respondent. Specifically, the Stop-Work Order states that Respondent was not in compliance with Chapter 440, Florida Statutes, because Respondent failed to obtain workers’ compensation coverage for its employees. On March 5, 2010, Mr. Eaton issued a Request for Production of Business Records for Penalty Assessment Calculation to Respondent. On March 8, 2010, Respondent provided Mr. Eaton with additional workers’ compensation policy information. The information included the declarations page for Chartis Company Policy No. WC 005-73-7942. The Chartis policy is a Workers’ Compensation and Employers Liability Policy. In Item 3A, the policy lists the states that are covered, in Part One of the policy, pursuant to each state’s workers’ compensation law. Georgia is named as a covered state in Item 3A. In Item 3C, the Chartis policy lists the states that are covered, in Part Three of the policy, as "other states insurance." Florida is listed only in Item 3C. Item 4 of the Chartis policy states that "[t]he premium of this policy will be determined by our Manuals of Rules, Classifications, Rates and Rating Plans. All information required below is subject to verification and change by audit." In response to the request for business records, Respondent provided Petitioner with payroll information for work it had performed in Florida between September 2007 and February 2010. After receiving this information, Respondent’s Penalty Calculator, Robert McAullife, calculated a penalty. Because Respondent had not provided all of the requested business records, Mr. McAullife imputed Respondent’s payroll for a portion of the relevant time period. In calculating the penalty, Mr. McAullife first sought to determine the amount of premium that Respondent would have paid had it been properly insured for the relevant three-year period. Mr. McAullife assigned a class code for each of Respondent’s employees, reflecting the work they performed. Mr. McAullife then took 1/100th of the payroll and multiplied that figure by the approved manual rate applicable to each class code. Mr. McAullife then took the previously obtained product and multiplied it by 1.5 to find a penalty in the amount of $122,242.23. This penalty is based on Respondent having $382,146.90 in Florida payroll that would have required $81,494.66 in workers’ compensation premium. There are no errors in Mr. McAullife’s penalty calculation. Mr. Eaton issued an Amended Order of Penalty Assessment on March 23, 2010. On March 24, 2010, Respondent and Petitioner entered into a Payment Agreement Schedule for Periodic Payment of Penalty that required ten percent of the penalty to be paid in advance and the remainder to be paid in 60 interest-free monthly payments. Respondent also produced a policy that provided coverage in compliance with Florida law with an effective date of March 12, 2010. As a result, Petitioner issued an Order of Conditional Release, permitting Respondent to return to work. During the hearing, Respondent presented evidence that it is a registered self-insured company in Kentucky for the first $500,000.00 of workers’ compensation. Additionally, Respondent has excess insurance for any workers’ compensation claims that exceed the $500,000.00 threshold. Because it is self-insured in Kentucky, Respondent must purchase letters of credit on an annual basis. Respondent paid the following for its recent letters of credit: (a) 2007, $26,755.54; (b) 2008, $32,438.48; (c) 2009, $33,626.38; and (d) 2010 to date, $8,931.39. The State of Kentucky assesses qualified self-insureds a six and one half percent tax based on an annual simulated premium. The amount of the simulated premium represents what a qualified self-insured would pay for a "first dollar" policy of workers’ compensation insurance. Respondent’s recent simulated premiums are as follows: (a) 2007, $453.440.00; (b) 2008, $480,637.00; (c) 2009, $623,940.00; and (d) 2010, $1,006,243.00. Respondent also maintains a "high dollar" deductible policy of insurance that provides workers’ compensation coverage for its Georgia employees. Respondent’s Georgia policy, Chartis Company Policy No. WC 005-73-7942, which includes Florida as part of "all other states" in Item 3C of the declarations page, also requires the payment of premiums. Respondent recently paid the following premiums for this insurance: (a) 2007, $124,736.78; (b) 2008, $125,950.08; and (c) 2009, $64,465.28. The premiums paid by Respondent for the Chartis Company Policy No. WC 005-73-7942 are not based on Florida rates. From 2007 to 2010, Respondent provided workers’ compensation benefits for at least four different workers that were injured while performing work for Respondent in Florida. The workers’ compensation benefits paid by Respondent on these claims totaled $147,958.25.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Financial Services, Division of Workers’ Compensation, enter a final order, finding that Caldwell Tanks, Inc., failed to comply with Chapter 440, Florida Statutes, and imposing a penalty in the amount of $122,224.22. DONE AND ENTERED this 8th day of December, 2010, in Tallahassee, Leon County, Florida. S SUZANNE F. HOOD 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 8th day of December, 2010. COPIES FURNISHED: Claude M. Harden, III, Esquire Carr Allison 305 South Gadsden Street Tallahassee, Florida 32301 Jamila Georgette Gooden, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399 Julie Jones, Agency Clerk Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0390 Benjamin Diamond, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0390 Honorable Alex Sink Chief Financial Officer The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0390
