The Issue The issue is whether Respondent is entitled to recovery of overpayments of disability benefits resulting from the alleged failure to reduce such payments by offsetting social security benefits.
Findings Of Fact From March 1, 2007, until February 26, 2010, Petitioner was employed by the Department of Health as a Dental Consultant for the Prosecution Services Unit. During the period of his employment, Petitioner was a Select Exempt Service employee. Respondent is responsible for the administration of the state group insurance program. As authorized by law, Respondent has contracted with NorthGate Arinso to provide human resources management services, including the administration of employee health insurance benefits. The electronic portal for state employees to access personnel information is the “People First” system. During his employment with the Department of Health, Petitioner participated in the Florida state group insurance program, and was enrolled as a member of the State Employees PPO Plan. At the time of his enrollment in the state group insurance program, Respondent was provided with the Senior Management and Select Exempt Service Employees' State Group Disability Insurance Program benefits booklet. The booklet provides, under the heading "Benefit Reduction Provisions," that: Benefits payable under this insurance will be reduced by the amount of: Any disability or retirement Social Security Benefits for which the employee is eligible, and benefits for which the employee's spouse or children are eligible as a result of the employee's eligibility for Social Security benefits. DSGI reserves the right to estimate the amounts of any Social Security benefits until the employee has applied for such benefits and the Social Security Administration has made a final determination, and to reduce the plan benefits as if these Social Security benefits were paid. Benefit payments made by DSGI will be adjusted when a determination is made by the Social Security Administration. If such a determination reveals an overpayment by the Plan, DSGI has the right to recover any such overpayment. Petitioner has a supplemental disability life insurance policy with the Cigna insurance company. The supplemental policy is not administered by Respondent, and did not affect the state disability insurance benefits. While employed at the Department of Health, Petitioner began to experience debilitating health problems. By October, 2009, his condition had advanced to the degree that he could no longer work. Petitioner began to contemplate going on disability. He was uncertain as to whether he would be allowed to resign from state employment and still qualify for disability benefits. Petitioner?s daughter, Karen Halperin Cyphers, researched the issue and discovered that it had been resolved by judicial decision in a manner that would allow Petitioner to retire from state employment, but maintain his disability benefits for the full term allowed by law. Ms. Cyphers sought confirmation from Respondent that Petitioner would qualify for disability benefits if he resigned his position. On January 29, 2010, Respondent e-mailed a letter to Ms. Cyphers confirming that “benefits will not terminate solely because an insured terminates employment with the state. To be eligible for these benefits, all other requirements must be satisfied.” On February 17, 2010, Petitioner filed his claim for benefits under the state disability plan, and the required Attending Physician?s Statement. The Attending Physician?s Statement confirmed that Petitioner was not able to work. Petitioner thereafter went on leave-without-pay status on February 18, 2010. His last day of employment with the Department of Health was February 27, 2010. Petitioner was eligible for state disability benefits for 364 days, or into February, 2011. At all times pertinent to this proceeding, Petitioner?s wife, Dr. Gail Halperin,1/ was responsible for handling the family?s finances. Petitioner consulted with Mrs. Halperin when he was able. However, the severity of Petitioner?s medical condition, which necessitated a stay of almost five weeks at the Mayo Clinic, often made communications regarding finances impractical. Mrs. Halperin used electronic banking services, and frequently checked the family account to ensure that the bi- weekly state disability benefit payments had been deposited. On March 12, 2010, Mrs. Halperin wrote to Respondent to object to an underpayment in one of the first disability benefit payments to Petitioner. The underpayment amount resulted from an issue regarding four days of available leave, which would have made Petitioner ineligible for benefits for the period of March 1 through March 4, 2010. In her e-mail, Mrs. Halperin acknowledged having read the "Benefit Reduction Provisions" of the benefits booklet regarding reduction of state benefits by Social Security benefits, but as to any such reductions of Petitioner?s state benefits, noted that Petitioner “did apply of [sic] social security, but he does not expect to hear from them for quite some time.” The underpayment issue was resolved, and Petitioner was ultimately paid for the disputed four days. By a Notice of Award from the Social Security Administration dated September 3, 2010, Petitioner was notified that he had been determined to be entitled to Social Security Disability benefits in the amount of $1,818.00 per month. He received his regular monthly payment for September, 2010, and a lump-sum payment of $5,454.00, for the months of June-August, 2010. As was her practice regarding state disability payments, Mrs. Halperin regularly checked her bank accounts to ensure that the payments were deposited, and knew that Social Security Disability Income benefits were being paid to Petitioner. Petitioner did not inform Respondent when he became eligible for Social Security Disability Income benefits, or when he began receiving those payments. During his period of disability, Petitioner had a dispute with Cigna regarding its denial of a waiver of his supplemental disability policy premium. On November 14, 2010, Mrs. Halperin sent an appeal of the denial to Rhonda Whethers, an employee of Cigna. The appeal, sent by e-mail, consisted of roughly nine pages of printed text and eight exhibits. Mrs. Halperin described Petitioner's medical condition in detail, and requested that Cigna waive the premium to keep the policy in effect. Mrs. Halperin sent copies of the appeal to Cigna's manager of Specialty Lines Administration, to the Director of Cabinet Affairs for the Florida Attorney General, to the Insurance Consumer Advocate for the Department of Financial Services, and to Michele Robletto, the DSGI Division Director. In the description of Petitioner's medical condition, Mrs. Halperin stated that "[i]ndeed, Minnesota Life, the State of Florida through the State Group Health Plan, and the U.S. Social Security Disability Insurance (SSDI) program have fully approved [Petitioner's] claim of total disability from ANY and ALL work." That statement is the only time in which mention of Petitioner's Social Security benefits was made to Respondent. The reference, which was not directed to Respondent, is too indirect to constitute notice to Respondent of Petitioner's Social Security benefits. On February 1, 2011, Respondent sent Petitioner a notice that his Attending Physician?s Statement had not been updated. On February 6, 2011, in response to the previous notice, Mrs. Halperin sent a copy of the September 3, 2010, Notice of Award from the Social Security Administration to Respondent. That letter was the first disclosure to Respondent of Petitioner's eligibility for, and receipt of, payments of Social Security disability benefits. Based on the September 3, 2010 letter, Respondent determined that Petitioner had been receiving state disability benefits without the reduction of Social Security benefits as provided for by rule. Thereafter, Respondent calculated that Petitioner was overpaid in the amount of $13,925.82. On February 21, 2011, Respondent notified Petitioner that it had overpaid him $13,925.82, in State Group Disability Income benefits. That figure is found to accurately reflect the amount of state benefits that were not reduced by corresponding payments of Social Security benefits. Petitioner argues that neither rule 60P-9.005 nor the the Senior Management and Select Exempt Service Employees' State Group Disability Insurance Program benefits booklet contains a requirement that a recipient of state disability benefits notify Respondent of eligibility for or receipt of Social Security disability benefits, and that as a result, Respondent should be estopped from recovering any overpayments. Rule 60P-9.005 and the Senior Management and Select Exempt Service Employees' State Group Disability Insurance Program benefits booklet are both clear and unequivocal that state disability benefits are to be reduced by Social Security disability benefits. Respondent receives no information directly from the federal government regarding disability benefits. Thus, it is the responsibility of recipients of state disability income to understand and comply with the law. Petitioner testified that neither he nor his family had any intent to mislead the state. The undersigned accepts that as true. Nonetheless, Petitioner received state disability benefits after he became eligible for and began receiving Social Security benefits, without the reduction required by law. Thus, Respondent is entitled to recovery of the overpayments.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Management Services enter a final order finding that Respondent is entitled to recovery of overpayments of disability benefits in the amount of $13,925.82. DONE AND ENTERED this 19th day of April, 2012, 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 19th day of April, 2012.
The Issue The issue is whether a retiree's forfeiture of Florida Retirement System (FRS) benefits authorizes Respondent to seize from unrelated remittals due Petitioner the sum of $18,271.75, which is the amount that Respondent had previously deducted from the retiree's pension benefits and remitted to Petitioner for the payment of the retiree's insurance premiums.
Findings Of Fact Employed by Petitioner in April 1974, Garfield Perry participated in the FRS pension plan. On or about October 31, 2009, Mr. Perry terminated his employment and began receiving his monthly FRS pension benefit. Two months earlier, Mr. Perry had entered into an agreement with Petitioner for it to provide post-retirement life insurance for Mr. Perry and medical and dental insurance for Mr. Perry and his wife with all three policies commencing in November 2009. While these policies were in effect, pursuant to an agreement between Petitioner and Respondent that is described below, Respondent remitted to Petitioner a portion of Mr. Perry's FRS pension benefit equal to $17,429.47 for medical and dental premiums and $842.28 for life insurance premiums, for a total of $18,271.75. Petitioner is a self-insurer for medical insurance, so, on receipt of medical insurance premiums, Petitioner pays a portion of the premiums to a third-party administrator for insurance-related services and reserves the remainder for the payment of claims. For dental and life insurance, Petitioner remits the premiums to the respective insurers. On May 7, 2014, Mr. Perry pleaded guilty to one count of bribery and extortion in the United States District Court, Southern District of Florida, in connection with his employment in Petitioner's Public Works Department. On or about July 29, 2014, the court adjudicated Mr. Perry guilty. By letter dated August 6, 2014, Respondent advised Mr. Perry that, pursuant to article II, section 8(d), of the Florida Constitution, and sections 112.3173 and 121.091(5), Florida Statutes, his FRS benefits were forfeited due to his guilty plea. Mr. Perry requested an administrative hearing on the forfeiture, and Respondent transmitted the file to DOAH, which designated the case as DOAH Case No. 14-4195. On December 31, 2014, Mr. Perry voluntarily dismissed his request for hearing prior to the final hearing, and, on January 9, 2015, Respondent issued a Final Order of Dismissal that finds, among other things, that Mr. Perry committed the criminal offenses "from in or about 2006 through in or about October 2009." The final order formally declares a forfeiture of Mr. Perry's FRS pension benefits, evidently including benefits already paid. Respondent did not provide Petitioner with a copy of the August 6, 2014, letter, the Final Order of Dismissal, or any of the pleadings in DOAH Case No. 14-4195. The present record does not indicate if Petitioner had actual notice of the forfeiture process. However, this case likely represents the first time that Respondent has attempted to recover insurance premiums that it has remitted to an agency or company following the retiree's forfeiture of retirement benefits, and it is unlikely that Petitioner was aware of its potential liability to repay these amounts until April 1, 2016, as described below. This potential liability arguably arises from a Payroll Deduction Agreement entered into by Petitioner and Respondent. The agreement allows a retiree to authorize Respondent to deduct monthly from his pension benefit an amount equal to his insurance premiums and to remit this sum to Petitioner, so that it can pay the retiree's premiums. In this case, Respondent remitted insurance premiums to Petitioner from November 2009 through October 2012 and allocated them in the manner set forth above in paragraph 2. Three and one-half years after the last remittal that included any sums for Mr. Perry's insurance premiums, almost two years after Mr. Perry's guilty plea, and about 15 months after the final order declaring the forfeiture, Respondent withheld $18,271.75 from Respondent's March 2016 consolidated remittal to Petitioner on the account of other retirees in an attempt to recover the remittals that Respondent had made to Petitioner to pay Mr. Perry's insurance premiums. The Payroll Deduction Agreement is a form prepared by Respondent that is signed by the agency or company seeking to receive remittals for its FRS retirees. Under the agreement, which has a signature line only for the agency or company and not Respondent, the agency or company agrees to preserve the confidentiality of the information, assume responsibility for the accuracy of the premium deductions, and notify Respondent timely of the discontinuation of this payroll deduction service. An employee of Petitioner signed the Payroll Deduction Agreement on April 27, 2009. The Payroll Deduction Agreement requires the agency or company to accept the "Procedures for Admitting Insurance Providers for Retired Payroll Deduction." The procedures document states that Respondent offers the convenience of payroll deduction of insurance premiums as a service to FRS pension recipients. Only two paragraphs of this document address post-deduction adjustments: 11. If a retiree's insurance premium is deducted incorrectly for any reason (i.e.-- overpayment of amount, policy cancelled, administrative error, etc.), the Insurance provider company or FRS agency is responsible for refunding the premium amount to the retiree. 13. [1] If a retirement benefit is cancelled by the Division of Retirement, the corresponding insurance premium that was deducted from that same dated payment is recovered from the following month's consolidated insurance payment. Reasons for cancellations include payee deaths, [sic] cancelling retirement. When determining the amount of insurance premiums to be reimbursed to families of deceased members, please note that the Division cannot determine when a death will be reported or when funds will be funds will be returned [sic] from banks (resulting in cancellations). [4] There are occasions when a report of death is received months after a retiree's death. [5] If payments for the deceased are still outstanding, they most likely will be cancelled. A common example follows: Example: Payee dies 1/5/09. Family reports death to the Division on 4/1/09. Retiree was only due payments through the month of January. Since the February and March payments are still outstanding, these paper checks are cancelled by the Division of Retirement. This cancellation action recovers the 2/27/09 and 3/31/09 premium deductions from the 4/30/09 consolidated payment. A credit entry will also appear on the April 2009 report of retiree insurance deductions. Please Note: We recommend that you contact the Division of Retirement to inquire about possible payment cancellations prior to processing premium reimbursements. Paragraph 11 of the Payroll Deduction Agreement requires that an agency or company repay the retiree any excessive premium deduction, so is irrelevant in the case of forfeiture. Paragraph 13 of the Payroll Deduction Agreement applies to the situation in which a premium deduction is unfunded because of the cessation of the pension benefit from which it is deducted. In its proposed recommended order, Petitioner argues that the application of paragraph 13 is prospective only, so it would not apply to a retroactive setoff of the type that has occurred in this case. The first sentence identifies the contingency of the cancelation of a retirement benefit and authorizes Respondent to recover its remittal of any premiums deducted from the cancelled pension benefit, but mentions a recovery or setoff only in the month following the cancelation. This establishes the kind of liability that Respondent seeks to impose on Petitioner, but only for the brief period of one month. Obviously, the willingness of an agency or company to assume this minor liability for the convenience of its retirees does not imply a willingness to assume a much larger liability spanning several months or even years of remittals. The second sentence cites two common reasons for cancelation: the death of the retiree and the cancellation of the pension benefit by the retiree. The use of "includes," as well as the insertion of a comma in place of "and" or "or," suggests that these two reasons are illustrative, not exhaustive. Even so, the second sentence does not add the reason of forfeiture, and, at this point in paragraph 13, the details of the parties' agreement concerning a forfeiture has not been explicitly addressed. The third and fourth sentences address only the contingency of the death of the retiree, in which case Respondent recovers unearned premiums that Respondent intends to remit to the estate of the retiree--in most cases, one assumes, indirectly to the families of the deceased member. Typically, insurers are not exposed to the risk of insured losses after the death of a retiree--even a life insurer's exposure ends after the insured's death and payment of the death benefits--so any premiums paid after death are unearned and should be refunded to the proper party. The warning that Respondent may not learn of the retiree's death for many months suggests a longer period may be available for retroactive adjustments, but this warning applies only to the contingency of death, again, where the insurers are obligated to refund unearned premiums. The fifth sentence also addresses only the contingency of the death of a retiree and seems to provide only that Respondent will cancel any pension benefits or premium remittals still outstanding at the time of the retiree's death. The example illustrates a three-month delay in the receipt of notification of a retiree's death followed by the cancellation of the pension benefits issued in the preceding two months, which presumably could not have been lawfully presented for payment by anyone besides the deceased retiree. In this case, Respondent would issue a corresponding credit entry on the next month's report of premium deductions made on account of the retiree. The procedures document thus fails to address the contingency of forfeiture. The provisions applicable to the contingencies of the death of the retiree and the retiree's cancellation of pension benefits are a poor fit for the contingency of forfeiture. Respondent has previously recovered income tax withheld on paid pension benefits following a forfeiture, but the recovery was limited to the period during which an amended personal income tax return could be filed--the effect being that the amount could be effectively recovered in the form of a tax refund from the Internal Revenue Service, rather than from an agency or company.
Recommendation It is RECOMMENDED that the Department of Management Services enter a final order dismissing the Petition Requesting an Administrative Hearing filed on August 17, 2016. DONE AND ENTERED this 8th day of February, 2017, in Tallahassee, Leon County, Florida. S Robert E. Meale 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 February, 2017. COPIES FURNISHED: Veronica E. Donnelly, Esquire Offices of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 (eServed) Joni A. Mosely, Esquire Assistant County Attorney Miami-Dade County Attorney's Office Stephen P. Clark Center, Suite 2810 111 Northwest 1st Street Miami, Florida 33128-1993 (eServed) Elizabeth Stevens, Director Division of Retirement Department of Management Services Post Office Box 9000 Tallahassee, Florida 32315-9000 (eServed) J. Andrew Atkinson, General Counsel Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 (eServed)
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 issue is whether Petitioner timely filed his request for claim form requesting reimbursement for certain covered expenses under the Florida Flexible Benefits Program--Reimbursement Plan.
Findings Of Fact Petitioner is a member of the faculty of the University of South Florida. He participates in the Florida Flexible Benefits Program--Reimbursement Program (Program). The Plan allows participants to pay certain eligible medical or dependent day care expenses with pretax earnings. Each year, during an open enrollment period, an employee may elect to participate in the Program and select an amount of salary to be deducted from his or her pay. The amount of salary so deducted is not subject to federal income tax, but is available to reimburse the employee for covered expenses. In order for the Program to continue to enjoy preferential treatment under the federal income tax law, Respondent, which administers the Program, must adhere to certain rules. Most relevant to this case is that that the deducted salary must be at risk. Specifically, an employee is not entitled to a refund of all or part of the deduction if he or she does not timely submit sufficient reimbursable expenses to exhaust his or her account. The Program brochure clearly warns participants of this "use it or lose it" rule. The plan year for the Program is the calendar year. In 1997, Petitioner was a participant in the Program. He and his wife chose not to submit claims for covered expenses, as they paid them during the year. Instead, they accumulated the receipts with the intent of submitting a single claim for their account balance at the end of the plan year. The Program sets a claims filing deadline of April 15 for filing claims arising out of the expenses paid in the preceding calendar year. The Program brochure warns that this deadline means all claims for expenses incurred during a plan year must be postmarked by midnight, April 15 of the following year to be considered for processing. Any claims received after this date will be returned to the participant unprocessed, regardless of the account balances. Participants should file claims as soon as the required documentation is obtained. This case involves only one issue: whether Petitioner timely submitted his claims for reimbursement under the Program. There is no issue concerning Petitioner's payment of these expenses or his account balance. There is no issue whether these expenses are eligible for reimbursement. In early March 1998, Petitioner and his wife collected their receipts for covered expenses from 1997. Petitioner completed a reimbursement form and addressed the envelope to Respondent at the correct address. Wanting to make copies of the materials, Petitioner did not immediately mail the package to Respondent. A few days later, prior to copying the materials or mailing the package, Petitioner's father became ill in the Mideast, where he lives. Petitioner and his wife agreed that she would copy the materials and mail the package to Respondent. On March 21, which marks the birthday of Petitioner's wife and a cultural holiday for Petitioner and his wife, Petitioner's wife telephoned her husband, who was still visiting his sick father. In the ensuing discussion, Petitioner learned that she had not yet mailed the package. They discussed the matter and again agreed that she would copy the materials and mail the package without further delay. Without further delay, Petitioner's wife copied the materials and mailed the package to Respondent at the correct address. She placed the package with sufficient postage in a mailbox across from her home. The package consisted of a claims reimbursement form and receipts for eligible expenses. It appears that she may have written an old return address on the envelope. Respondent never received the package. Respondent's procedures are carefully designed and executed to ensure that it will not lose a claim form. Repeated searches for the missing form never uncovered it. The package was lost after its mailing by Petitioner's wife and prior to its delivery to Respondent. Possibly, the incorrect address precluded notification to Petitioner of problems with delivery. Possibly, the package was just lost. Unfortunately, Petitioner learned only after the April 15 deadline that Respondent had never received the package.
Recommendation It is RECOMMENDED that the Department of Management Services, Division of State Group Insurance, enter a final order determining that Petitioner timely submitted the claim and eligible expenses that were the subject of this case. DONE AND ENTERED this 8th day of March, 2000, in Tallahassee, Leon County, Florida. ROBERT E. MEALE 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 8th day of March, 2000. COPIES FURNISHED: Paul A. Rowell, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 Thomas D. McGurk, Secretary Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 Mohsen M. Milani 15927 Ellsworth Drive Tampa, Florida 33647 Julia Forrester Assistant General Counsel Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399
The Issue Did Respondent, John McCary General Contractor, Inc. (McCary), fail to secure workers’ compensation insurance for employees as required by chapter 440, Florida Statutes (2016)?1/ If so, what is the appropriate penalty?
Findings Of Fact The Division is the state agency responsible for enforcing the statutory requirement that employers secure workers’ compensation insurance for the benefit of their employees. § 440.107(3), Fla. Stat. McCary is a roofing contractor owned and operated by John McCary. It is in the construction industry. On November 18, 2016, Mr. Howe, a compliance investigator for the Division, visited a house where McCary was tearing off the roof. Mr. Howe recorded the names of each employee. He conducted an investigation that included speaking to Mr. McCary, re-interviewing the employees, checking with the employee leasing company that McCary used, and checking the Davison database of insured individuals. Mr. Howe could not find a record of workers’ compensation coverage for at least one employee. This triggered further investigation that resulted in Mr. Howe issuing a Stop-Work Order to McCary on November 18, 2016, for failure to secure workers’ compensation insurance in violation of sections 440.10(1), 440.38(1) and 440.107(2). After that, the Division followed its usual practice of requesting documents, reviewing its databases, soliciting information and explanations from the employer, and analyzing the information and documents obtained. Division Exhibit 9 shows that the Division asked McCary for business records on November 21, 2016, and that McCary did not provide them until December 12, 2016. The Division’s investigation and analysis resulted in the evidence admitted in this proceeding. The evidence proved the allegations of the Division’s Third Amended Order of Penalty Assessment, including its attached Penalty Calculation Worksheet. McCary did not comply with workers’ compensation insurance coverage requirements for the period May 1 through November 18, 2016. During that period, McCary employed Arcenio Rosado, Domingo Esteves, Javier Restrepo, Jose Alfredo Fuentes, Carlos Toledo, Edwin Valle, Kelly Alvarez, Kyle Shiro, Claudia Florez, and Nelson Geovany Melgar Rodenzo and that they performed work for it. McCary would have paid $4,744.06 in insurance premiums to provide workers’ compensation coverage for these employees during that period. During that period, McCary also used the services of two subcontractors, Star Debris Removal and E C Roofing, LLC. These subcontractors did not have workers’ compensation insurance for their employees during the May 1 through November 18, 2016, period. Premiums to provide coverage to the employees of the two subcontractors who worked on McCary’s projects would have totaled $100,771.09. From May 1 to November 18, 2016, McCary made cash payments of $195,856.02 that its documents could not confirm to be for a valid business expense. Florida Administrative Code Rule 69L-6.035(1)(k) requires that 80 percent of that amount be deemed wages or salaries paid employees when calculating the premiums used to determine the ultimate penalty. Eighty percent of McCary’s unaccounted-for cash payments is $156,684.82. That amount is legally deemed to be a payroll expense. McCary would have paid $29,143.38 to provide coverage for the employees represented by the cash payments. Altogether, McCary would have paid $134,658.53 to provide workers’ compensation coverage to the uncovered employees represented by the actual and deemed payroll during the May 1 to November 18, 2016, period.
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 John McCary General Contractor, Inc., failed to secure payment of required workers’ compensation insurance coverage from May 1 to November 18, 2016, in violation of section 440.107, Florida Statutes, and imposing a penalty of $269,317.06, reduced by $1,000.00. DONE AND ENTERED this 17th day of July, 2018, in Tallahassee, Leon County, Florida. S JOHN D. C. NEWTON, II 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 17th day of July, 2018.
The Issue The issue is whether Petitioner properly issued a Stop-Work Order and 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, Grandview was a corporation registered to do business in Florida. Grandview is a bread and breakfast and was an active company during the two-year audit period from August 22, 2015, through August 21, 2017. On July 19, 2017,1/ Respondent met with a Henderson Insurance agent and learned that Respondent was not in compliance with the workers' compensation requirements. Grandview immediately requested bids to obtain insurance, but did not purchase a policy because it was decided that it was "not the right time." On August 21, 2017, Robert Feehrer ("investigator" or "Feehrer"), compliance investigator for the Division, started an investigation of Grandview. Feehrer discovered that Grandview did not have any workers' compensation policies, employee leasing agreements, or exemptions on file with the National Council on Compensation Insurance. That same day the Division issued Grandview a Stop-Work Order for Respondent's failure to secure the required workers' compensation insurance coverage. Petitioner also served Grandview with a Request for Production of Business Records for Penalty Assessment Calculation ("Request") asking for documentation to enable the Division to evaluate the payroll for the audit period of August 22, 2015, through August 21, 2017, and to determine Respondent's compliance with the Workers' Compensation Law of Florida. Grandview responded timely and provided sufficient business records in response to the Division's Request. Eunika Jackson ("auditor" or "Jackson"), penalty auditor for the Division, was assigned to Grandview's investigation. Jackson reviewed the business records produced by Grandview. Jackson concluded her audit by properly calculating the workers' compensation amount owed by Grandview for the audit period using the Class Code 9052 for lodging facilities. Jackson applied the approved manual rates and methodology specified in section 440.107(7)(d). Grandview had at least four employees2/ during the audit period and did not have any exemptions from workers' compensation insurance coverage requirements during the audit period. Initially, Jackson calculated Grandview's penalty amount as being over $25,000.00. After Grandview timely provided sufficient business records in response to the Request, Jackson correctly applied the penalty reduction credit to the calculation and concluded Grandview owed a reduced penalty amount of $13,755.55. On November 27, 2017, Respondent was served with the Amended Order of Penalty Assessment totaling $13,755.55. On December 18, 2017, Respondent challenged the 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 Amended Order of Penalty Assessment in the amount of $13,755.55. DONE AND ENTERED this 30th day of October, 2018, 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 30th day of October, 2018.
The Issue This issue in this case is whether the Petitioner is responsible for payment of certain state employee health insurance premiums.
Findings Of Fact In July, 1986, Ms. Phyllis McCluskey-Titus became employed at Florida State University ("FSU"). She and her husband, John, moved to Tallahassee from outside Florida, so that she could accept her employment. At the time Ms. McCluskey-Titus became employed, Mr. Titus had not yet accepted employment. She appropriately enrolled in the state health insurance plan. Mr. Titus was listed as, and had coverage as, a dependent on her family coverage. In August, 1986, Mr. Titus accepted employment at Tallahassee Memorial Regional Medical Center ("TMRMC"). Although TMRMC offered an employee health insurance benefit, Mr. Titus retained his coverage on his wife's plan, because the couple believed the state plan's benefits to be more beneficial. Enrollment in the state health insurance plan requires the payment of premiums. Such premiums are generally paid through joint contributions, by the employee (through payroll deduction) and by the state. However, where spouses are both state employees, and one spouse is listed as an eligible dependent on the other spouse's family coverage, the state makes the full health insurance premium contribution (the "spouse plan"). In August, 1988, Mr. Titus became employed by the Department of Health and Rehabilitative Services ("DHRS"). Both FSU (Ms. McCluskey-Titus's employer) and DHRS are state agencies. Therefore, upon Mr. Titus' employment at DHRS, the couple became eligible for the spouse plan. On August 24, 1988, Ms. McCluskey-Titus went to her personnel office and completed the necessary forms to qualify for the spouse plan. At the time of his employment, Mr. Titus received a package of materials from DHRS. Included in the materials was a five page document entitled "EMPLOYEE BENEFITS INFORMATION PACKAGE". The document outlines various insurance benefits and lists premiums related to coverages. On the first page of the information document, under the heading "PREMIUMS (full-time employees)" is the following statement: "If you and your spouse are both employed with State Agencies, please contact the Personnel office for information on the Spouse Program. If you are eligible, the State will pay up to 100% of your premium". Believing that his wife's completion of the appropriate form at the FSU personnel office was sufficient, Mr. Titus did not contact his personnel office for information. On the third page of the information document, is a form which was to be completed and returned to the DHRS personnel office. Contained on the form is the following statement: "If your spouse is employed with a State Agency in a Career Service position, please contact the Personnel office to request an application for the Spouse Program". Ms. McCluskey-Titus was not employed in a Career Service position. Mr. Titus believed that his wife's completion of the appropriate form at the FSU personnel office was sufficient. He did not obtain or submit an application for the program. Neither form provided to Mr. Titus stated that both spouses were required to submit separate documentation. There is no evidence that either Mr. or Ms. Titus were informed, by either employer or the Respondent, that the failure to complete separate documentation would preclude enrollment in the spouse program and could result in an assessment of unpaid premiums. After Ms. McCluskey-Titus submitted the form to the FSU personnel office, the state discontinued deducting her contribution to the health insurance premium from her check. The couple believed that, since no premium deduction was being withheld, the spouse plan enrollment had been completed. In February, 1989, Mr. Titus was informed that, because he had not completed the appropriate form at the DHRS office, the couple was ineligible for the spouse plan. The Respondent requires that both spouses complete separate documentation in order to enroll in the spouse plan. He completed the form and by March 1, 1989, their coverage in the spouse plan became effective. The Respondent is now attempting to assess Ms. McCluskey-Titus for the $83.46 monthly family coverage premiums which were not deducted from her pay during the five month period preceding Mr. Titus' completion of the appropriate form. The total amount claimed by Respondent is $417.30. The evidence indicates that, but for Mr. Titus' failure to complete and submit the form, the couple would have been entitled to participate in the spouse plan and no premium contribution would be owed.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that: The Department of Administration, Division of State Employees' Insurance, enter a Final Order dismissing the assessment against the Petitioner for additional insurance premiums in the total amount of $417.30. DONE and RECOMMENDED this 9th day of February, 1990, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of February, 1990. APPENDIX CASE NO. 89-4943 The following constitute rulings on proposed findings of facts submitted by the parties. Petitioner Accepted as modified. Accepted as modified, except for last sentence, rejected, argument, not appropriate finding of fact. Statement that prescription drug claims were covered is rejected, not supported by evidence. Rejected, irrelevant. Nature of communication between the respective personnel offices, rejected, not supported by evidence. Respondent Accepted. Rejected, not supported by evidence. 3-4. Accepted as modified. However, requirement that both spouses must submit forms, not supported by evidence. Accepted as to amount, rejected as to indicating that Petitioner was responsible for payment, not supported by evidence. Rejected. Paragraph 2E(2) of the Petition does not state that Mr. Titus failed to read the document, but states only that he took no action. Rejected, not supported by evidence. COPIES FURNISHED: Phyllis McCluskey-Titus 2353 Skyland Drive Tallahassee, Florida 32303 William A. Frieder, Esq. Department of Administration Room 438, Carlton Building Tallahassee, Florida 32399-1550 Aletta Shutes Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 =================================================================
The Issue The issue at hearing was whether Respondent Department of Health and Rehabilitative Services correctly denied Petitioner Michelle King's application for emergency assistance to needy families with dependent children under Title IV-A of the Social Security Act.
Findings Of Fact Petitioner is the single mother of a son, three and one-half years old. At all times material to this proceeding, Petitioner was a full-time employee of a state agency. Her income was approximately $1,150 per month. She received no child support for her son. Her rent at Azalea Gardens Apartments was $385 per month. Petitioner's child attended day care at the Child Development Center of Central Florida Community College (CFCC Lab School). The child's father paid the cost of day care in the amount of $245 per month. In June of 1995, the child's father suffered an injury and was unable to work. He no longer paid the day care bill. At the same time, Petitioner had to pay some medical bills for her son. As a result, Petitioner was behind on her day care payments. On July 7, 1995, Petitioner's landlord notified her that she had until July 12, 1995 to pay her rent and late fees. At that time, Petitioner owed rent in the amount of $385 together with a $22 late fee and two dollars per day until the rent was paid in full. On July 25, 1995, Petitioner's landlord notified her that she had until noon the next day to pay $443 in rent and late fees to avoid eviction proceedings. In the meantime, Petitioner contacted Respondent seeking assistance to pay her delinquent rent, utilities and day care costs. Respondent's caseworker initially referred Petitioner to the Salvation Army and other local charities. However, there were no community resources available to meet Petitioner's past due bills. On the advice of Respondent's caseworker, Petitioner applied for cheaper housing at Hilltop Manor Apartments and for a cheaper day care program. Petitioner was placed on waiting lists for federally subsidized housing and child care programs. On July 31, 1995, Petitioner applied for emergency assistance for needy families with children under Title IV-A of the Social Security Act. The application requested retroactive payment of one month's rent in the amount of $455 and prospective payment of day care cost for two months in the amount of $945. While Petitioner's application was pending, she was able to pay her landlord enough money to forestall eviction. However her total debt increased. The application was amended to include a request for three months day care cost and additional late fees for failure to pay rent in a timely manner. Petitioner's lease at Azalea Garden Apartments expired at the end of August, 1995. About that time, Petitioner learned that she would be able to move into Hilltop Manor Apartments at a significantly lower rental. She informed Respondent's caseworker about her success in securing more affordable housing. Petitioner anticipated moving into her new apartment on September 1, 1995. She withdrew her child from day care and sent him to visit with his father while she made the move. By letter dated September 1, 1995, Respondent's caseworker informed Petitioner that her application for funding had been denied because she was no longer living at Azalea Gardens Apartments and her son no longer attended day care at the CFCC Lab School. This letter did not advise Petitioner that she was entitled to a hearing if she believed Respondent improperly denied her application. Petitioner was able to move into her new home on or about September 4, 1995. She enrolled her child in a day care program near her residence. Petitioner forfeited her security deposit at Azalea Gardens Apartments when she moved out. She continues to owe an undetermined amount of money to Azalea Gardens Apartments and the CFCC Lab School. Respondent sent Petitioner a Notice of Disposition dated September 8, 1995, as a formal determination that she was not eligible for emergency assistance. This notice explains that Petitioner was not approved because she was able to make other arrangements for housing and day care. The notice also advised Petitioner of her right to a hearing.
The Issue The issues in this case are whether Professional Staffing and Payroll Services, LLC, failed to secure the payment of workers' compensation coverage for its employees in violation of chapter 440, Florida Statutes (2014), and, if so, the penalty that should be imposed.
Findings Of Fact Petitioner, Department of Financial Services, Division of Workers' Compensation, is the state agency responsible for enforcing the requirement that employers in the State of Florida secure the payment of workers' compensation insurance coverage for their employees, pursuant to chapter 440, Florida Statutes. Respondent, Professional Staffing and Payroll Services, LLC, is a registered Florida limited liability company. At all times relevant to this proceeding, its business address was 1400 Colonial Boulevard, Suite 260, Fort Myers, Florida. Respondent actively engaged in business during the period from February 1, 2015, to June 17, 2015. On June 2, 2015, Petitioner's compliance investigator, Jack Gumph, conducted a workers' compensation compliance investigation at a worksite located at 8530 Palacio Terrace North, Lot 67, Hacienda Lakes, Naples, Florida. At the worksite, Gumph observed five workers nailing down plywood on the trusses of the roof of a house under construction. One of the workers, Fernando Fernandez, identified himself as the job foreman. Mr. Fernandez and the other four workers were employed by J.S. Valdez, Inc. ("JSV"). These workers were engaged in carpentry work installing plywood. This type of carpentry work is classified as National Council on Compensation Insurance ("NCCI") class code 5403 and is considered a type of construction activity under Florida Administrative Code Rule 69L-6.021(2)(cc). The evidence established that JSV was a client company of Global Staffing Services, LLC ("GSS"), and that GSS supplied the workers to JSV. The evidence further established that all five workers Gumph observed at the Palacio Terrace jobsite were employees of GSS. Using the State of Florida's Coverage and Compliance Automated System ("CCAS") computer database, Gumph determined that JSV did not have workers' compensation insurance covering any of its employees, and that GSS had workers' compensation coverage only for two secretarial/clerical employees. Through research in the Florida Department of State, Division of Corporations Sunbiz database ("Sunbiz"), Gumph discovered that GSS was part of three related——as Gumph characterized it, "commingled"——business entities; these entities were GSS, Global Staffing Payroll, LLC ("GSP"), and Professional Staffing and Payroll Services, LLC, the named Respondent in this case. Ivan Hernandez was shown in Sunbiz as being the managing member of GSS and GSP. At that time, the managing member of Respondent was shown as being Martha Coloma. Gumph suspected that Respondent was leasing construction workers, who are engaged in hazardous work, through a staffing company that was characterized as a secretarial/clerical business (NCCI code 8810)——a substantially less hazardous occupation. The effect of classifying of these business as "secretarial/clerical" is that a much lower workers' compensation premium rate applies.2/ Gumph prepared requests for production of business records ("RPBR") for each of the related business entities and visited the business address listed in Sunbiz for GSS to personally serve them on Hernandez. The business was located in a strip mall that housed various types of businesses. As he was entering the business, he noted that the name shown at the entrance was "Professional Staffing." The business manager explained that GSS was opened in 2013, and that on February 1, 2015, the business name had been changed to Professional Staffing and Payroll Services——the named Respondent in this proceeding. Upon inquiry, Gumph was told that Hernandez was "out of state." Almost as soon as he left Respondent's business office, Gumph received a call from Hernandez, who confirmed that he was the owner and chief executive officer of both GSS and Respondent. Gumph scheduled an appointment with Hernandez for June 16, 2015. However, Hernandez did not keep that appointment or call Gumph back to reschedule the appointment. It was obvious to Gumph that Hernandez was avoiding him. In researching the Sunbiz records for Respondent, Gumph also noted that on June 16, 2015, the managing member's name had been changed from Martha Coloma to Ivan Hernandez. He also rechecked the CCAS and NCCI databases for Respondent and noted that only a few days before, a workers' compensation policy had been issued for Respondent. The policy listed the business as "secretarial/clerical" and had a total exposure of $143,000 to cover four secretarial/clerical employees. He also noted that GSS had a workers' compensation policy that was effective from August 15, 2014, to August 15, 2015, and that this policy did not cover any additional insured entities, so its coverage did not extend to Respondent or its employees. Gumph contacted Martha Coloma, who was employed by All Florida Financial Services, LLC, a payroll preparation and bookkeeping firm. Coloma told Gumph that in January 2015, Hernandez had asked her to amend the Sunbiz records for Respondent to be shown as Respondent's managing member. Coloma also told Gumph that Hernandez requested that she find a Professional Employer Organization ("PEO") leasing company that would secure workers' compensation coverage for approximately 40 to 50 of his employees who were engaged in construction work.3/ Coloma was unsuccessful, so Hernandez directed her to obtain another policy for secretarial/clerical employees. She obtained the policy covering the four secretarial/clerical employees. Thereafter, Gumph spoke directly with Hernandez, who confirmed that he employed 40 to 50 construction workers. He told Gumph that he had tried to obtain a policy but had been unable to do so. On June 17, 2015, Gumph issued a Stop-Work Order and Order of Penalty Assessment to Respondent, and also served a RPBR on Respondent. In response, Respondent provided business records consisting of bank statements from a Regions Bank account covering the period from February 1, 2015, to February 28, 2015. Respondent did not provide any copies of checks written during this period. Respondent also provided business records consisting of bank statements and copies of checks from a Fifth Third Bank payroll account for Respondent for the period of March 1, 2015, through June 17, 2015. The evidence establishes that between February 1, 2015, and June 12, 2015, Respondent employed 437 employees—— the great majority of whom worked in construction jobs——for whom Respondent failed to secure workers' compensation insurance coverage. For the period between June 13, 2015, and June 17, 2015, Respondent secured workers' compensation coverage for four secretarial/clerical employees. Based on the business records provided, Lynne Murcia, Petitioner's penalty auditor, calculated the penalty to be assessed against Respondent. Pursuant to section 440.107(7)(d)1., the penalty for failing to secure workers' compensation is equal to two times the amount the employer would have paid in premium when applying approved manual rates to the employer's payroll during the period for which the employer failed to secure coverage during the two-year period preceding issuance of the Stop-Work Order. Here, because Respondent became a business entity on or about February 1, 2015, the penalty period applicable to this proceeding commenced on February 1, 2015, and ran through June 17, 2015, the date on which the Stop-Work Order and Penalty Assessment were served on Respondent.4/ Respondent did not obtain any exemptions from the workers' compensation coverage requirement for the period between February 1, 2015, and June 17, 2015. The business records Respondent provided in response to the RPBR were not sufficient to enable Petitioner to calculate Respondent's payroll for the period commencing on February 1, 2015, and ending on February 28, 2015. Accordingly, Petitioner imputed the gross payroll for Respondent's employees identified in the taxable wage report for the period covering February 1, 2015, through February 28, 2015, the statewide average weekly wage effective at the time of the Stop-Work Order, multiplied by two. The imputed wages for these employees over this period amounted to $2,544,907.68. For the period commencing on March 1, 2015, and ending on June 17, 2015, Respondent provided records sufficient to enable Petitioner to determine Respondent's actual gross payroll. For this period, Respondent's gross payroll amounted to $1,202,781.88. The evidence shows that for the period from February 1, 2015, through June 12, 2015, Respondent failed to secure workers' compensation coverage for any of its employees. On June 13, 2015, Respondent secured workers' compensation covering four secretarial/clerical employees. This coverage did not extend to Respondent's employees engaged in work other than secretarial/clerical work. For the period from June 13, 2015, to June 17, 2015, Respondent's gross payroll was calculated as $22,507.37. In calculating the applicable penalty, Respondent received a credit of $923.98 for the premium paid on the policy secured on June 12, 2015. This amount was deducted from the penalty owed. In calculating the penalty, Murcia determined the NCCI class code applicable to each employee according to his or her job, and applied the pertinent approved NCCI rates to determine the amount of the evaded premium for each employee. Pursuant to this method, Murcia calculated a total penalty of $645,019.36, which was reflected in the Amended Order of Penalty Assessment. In sum, Petitioner demonstrated, by clear and convincing evidence, that Respondent failed to secure workers' compensation coverage for its employees, in violation of chapter 440. The clear and convincing evidence further establishes that Petitioner correctly calculated a penalty of $645,019.36 to be assessed against Respondent pursuant to sections 440.107(7)(d)1. and 440.107(7)(e) and rule 69L-6.028.
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 determining that Respondent Professional Staffing and Payroll Services, LLC, violated the requirement in chapter 440, Florida Statutes, to secure workers' compensation coverage and imposing a penalty of $645,019.36. DONE AND ENTERED this 10th day of February, 2016, in Tallahassee, Leon County, Florida. S CATHY M. SELLERS 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 10th day of February, 2016.
Findings Of Fact Petitioner was employed by Palm Beach County from 1954 to 1968 as Assistant County Engineer and County Engineer. During this period he was a member of SCOERS, had deductions taken from his salary for retirement, and became eligible for full retirement based on years of service when he reached the age of 60 in April, 1983. From 1954 to 1956 six percent (6 percent) [5 percent prior to July 1, 1955] was deducted from Petitioner's salary as his retirement contributions pursuant to the retirement plan in effect for state and county officers and employees. In 1957 the Legislature amended Chapter 122, Florida Statutes, by providing social security coverage for state and county employees electing to be so covered. All groups of employees, including SCOERS employees, were divided into Division A and Division B. Those in Division B were those who made an election in writing to have their retirement deductions changed from six percent (6 percent) to four percent (4 percent) to have FICA deductions withheld from their salaries, and to be covered by the Social Security System. Those not so electing remained in Division A, their employment was not covered by social security, and their retirement deduction was six percent (6 percent). As a county employee any election Petitioner made to convert from Division A to Division B would have been made to Palm Beach County, who provided the names of those so electing to the Comptroller's Office, who in 1958 handled the retirement files for the state. No list of names submitted by the counties has been retained by the state. Palm Beach County does not maintain active personnel files for retired people and had no personnel records for Petitioner in the dead files. Accordingly, at the time of the hearing Palm Beach County had no written election from Petitioner to change from Division A to Division B. When the employees in these SCOERs system elected to change to social security coverage in 1957 or 1958, part of the sum they had contributed to their state retirement was transferred to the Social Security Administration to make their entry into social security retroactive to January 1, 1956. The maximum that was transferred to the Social Security Administration for any one member of SCOERS so electing was $178.50. This amount was transferred from Petitioner's retirement account to the Social Security Administration in 1958. Effective January 1, 1956, Petitioner's contribution to SCOERS was calculated at four percent (4 percent) of his salary and this amount was deducted monthly until his employment with Palm Beach County ended in 1968. During the period Petitioner was employed by Palm Beach County he contributed to this retirement fund at the rate of six percent (6 percent) for 1.17 years and at the rate of four percent (4 percent) for12.91 years. From 1958 through 1962 annual statements were submitted to SCOERS members showing the contributions to and the status of their retirement accounts. In 1963 such a statement was provided on July 1, 1963. Thereafter, the statements were submitted on a fiscal year basis. At no time did Petitioner protest the FICA deductions from his salary or question the percentage deducted from his pay for the retirement fund. Petitioner now contends that he did not pay any attention to the deductions from his salary to the retirement fund and was unaware that social security deductions were being taken. This contention is not consistent with Petitioner's testimony that he is a fiscal conservative nor with his background as an engineer. In addition to the referendum made available to employees under the SCOERS in 1957 to elect to be covered by social security the Legislature subsequently established other referendums in 1959 and again in the 1960s providing members of SCOERS other opportunities to elect social security coverage. On December 1, 1970, the Florida Retirement System was started and membership in the old Florida retirement systems, including SCOERS, was closed. All members of the Florida Retirement System are covered by social security. Of the approximately ten thousand employees not in the Florida Retirement System, i.e., still in SCOERS, teachers and law enforcement retirement systems, less than one hundred remain in Division A and are not covered by social security. A special Statute of Limitations bars actions to modify contributions to the Social Security System three years three months and fifteen days after the contributions are made. Accordingly, Petitioner's coverage under social security from 1956 to 1968 is irrevocable.
