Findings Of Fact On February 15, 1977, Petitioner was employed by the City of Clearwater as a full-time firefighter. He became certified as a firefighter on April 21, 1977, and was issued certificate number 5374. After receiving an associate's degree from St. Petersburg Junior College, Petitioner became eligible to receive firefighters' supplemental compensation benefits on July 1, 1981. After receiving a bachelor's degree from Eckerd College, Petitioner became eligible to receive additional firefighters' supplemental compensation benefits on May 1, 1984. Until July 2, 1986, Petitioner received his supplemental compensation benefits according to the appropriate level. On July 2, 1986, a hearing was held before the City of Clearwater Pension Advisory Committee as to whether Petitioner was entitled to a job- connected disability pension for injuries that he received in firefighting related activity. Following a finding by the Clearwater Pension Advisory Committee that Petitioner was entitled to the disability, the City of Clearwater forwarded to Respondent a Notice of Ineligibility for Supplemental Compensation Benefits, reflecting an ineligibility date for Petitioner of July 2, 1986. Based upon the Notice of Ineligibility, as well as the fact that Petitioner had received a disability that could not be corrected to the satisfaction of the Respondent, Respondent voided Petitioner's certification as a firefighter and terminated his supplemental compensation benefits as of July 2, 1986. Petitioner elected a retirement plan option offered by the City of Clearwater under which he extended his termination of employment date by the amount of time due him for vacation, holiday pay, and one-half of his accrued sick leave. By utilizing the vacation and sick leave time to which he was entitled, Petitioner extended his termination of employment date to October 8, 1987. Between July 2, 1986 and October 8, 1987 Petitioner occupied the status of an employee on vacation or on sick leave, i.e., he was on leave with pay. He received a paycheck at the same time that other employees of the City of Clearwater received theirs, and his paycheck carried the same deductions that other employees would have in their checks. It is uncontroverted that although Petitioner received his disability on July 2, 1986, Petitioner has received compensation from the City of Clearwater on an uninterrupted basis encompassing the period from July 2, 1986 through October 8, 1987 for duties that he performed as a full-time firefighter for the City of Clearwater Fire Departments his employing agency.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered reinstating Petitioner's supplemental compensation benefits from July 2, 1986 through October 8, 1987 and directing that those benefits be paid to Petitioner forthwith. DONE and RECOMMENDED this 23rd day of October, 1987, at Tallahassee, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of October, 1987. COPIES FURNISHED: William Gunter State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Fredric S. Zinober, Esquire Village Office Park, Suite 107 2475 Enterprise Road Clearwater, Florida 33575 Lisa S. Santucci, Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32399-0300 =================================================================
The Issue The issues to be determined in this case are whether Respondent Lockhart Builders, Inc., violated state laws applicable to workers’ compensation insurance coverage by failing to secure coverage for three employees and failing to produce records requested by Petitioner Department of Financial Services, Division of Workers’ Compensation (Department) and, if so, what penalty should be assessed for the violations.
Findings Of Fact Petitioner is the state agency responsible for the enforcement of the workers’ compensation insurance coverage requirements established in Chapter 440, Florida Statutes (2007).1 Respondent is a Florida corporation with its office in Bradenton. William Lockhart is Respondent’s president. Respondent is licensed to engage in construction activity in Florida. Respondent was engaged to construct a two-story duplex at 2315 Gulf Drive in Bradenton. Respondent began work at the job site on or about February 21, 2007. On August 22, 2007, Lockhart received a proposal from Burak Yavalar, owner of BY Construction, to do the exterior stucco work on the duplex building for a flat fee of $10,750. The proposal was accepted by Respondent on August 23, 2007. Yavalar presented Lockhart with a certificate of liability insurance which indicated that he had obtained workers’ compensation coverage for his employees. The certificate was issued by Employee Leasing Solutions, Inc. (ELS), a professional leasing company in Bradenton. ELS provides mainly payroll services and workers’ compensation insurance coverage for its clients. Lockhart did not ask for, and Yavalar did not provide Lockhart with, a list of the names of the BY Construction employees who were covered by the insurance. Lockhart made a call to ELS to verify that BY Construction had workers’ compensation insurance coverage, but he did not ask for a list of BY Construction employees covered by its insurance policy. BY Construction began work at Respondent’s job site on or about September 10 or 11, 2007. On September 12, 2007, BY Construction had eight employees at the job site. One employee, Justin Ormes, had previously worked for BY Construction, had quit for a while, and had just returned. Two other employees, Carlos Lopez and Jaime Alcatar, had been working on a nearby job site and were asked by Yavalar to come to work at Respondent’s job site. Yavalar claims that on the morning of September 12, 2007, Ormes, Lopez, and Alcatar had not yet been employed or authorized to start work for BY Construction. On September 12, 2007, Petitioner’s investigators Germaine Green and Colleen Wharton performed a random compliance check at Respondent’s job site. Without being specific about what particular work was being performed at the site by Ormes, Lopez, and Alcatar, the investigators testified that when they arrived at the job site they observed all eight men performing stucco work. The investigators spoke to Yavalar, Lockhart and the workers at the job site to determine their identities and employment status. Yavalar told the investigators his eight employees had workers’ compensation insurance coverage through ELS. However, upon checking relevant records, the investigators determined that insurance coverage for Ormes, Lopez, and Alcatar had not been secured by either BY Construction or Respondent. Wharton issued a statewide stop-work order to BY Construction for its failure to obtain workers’ compensation coverage for the three employees. After the stop work order was issued, Yavalar left the job site with Lopez and Alcatar to complete their paperwork to obtain insurance coverage through ELS. Yavalar’s wife was able to re-activate Ormes’ insurance coverage with ELS over the telephone. By the end of the day on September 12, 2007, insurance coverage was secured by BY Construction for Ormes, Lopez, and Alcatar. The business records of BY Construction produced for the Department indicated that Ormes had been paid by BY Construction in the period from March to July 2007, and then on September 12, 2007; Lopez had been paid on August 24, 2007, and then on September 12, 2007; Alcatar had been paid on September 12, 2007. All three men were paid only $28 on September 12, 2007. This evidence supports the testimony of Yavalar that these three had arrived at Respondent’s job site for the first time on September 12, 2008. BY Construction was later served with an amended order of penalty for its failure to obtain workers’ compensation coverage for the three employees. It arranged with the Department to pay the penalty through installments and was conditionally released from the stop-work order. When the Department's investigators were at the job site on September 12, 2007, they informed Lockhart about the stop-work order being issued to BY Construction and gave Lockhart a Request for Production of Business Records for the purpose of determining whether Respondent had obtained proof of workers’ compensation insurance coverage from BY Construction before BY Construction commenced work at Respondent’s job site. Respondent produced the requested records. As discussed in the Conclusions of Law, Florida law charges a contractor with the duty to secure workers’ compensation insurance coverage for any uninsured employees of its subcontractors. On this basis, the Department served Respondent with a Stop-Work Order and an Order of Penalty Assessment on September 21, 2007, for failing to secure coverage for Ormes, Lopez, and Alcatar. On September 21, 2007, the Department served a Request for Production of Business Records for Penalty Assessment Calculation to Respondent. The Department’s request asked Respondent to produce records for the preceding three years, including payroll records, tax returns, and proof of insurance. Respondent produced some records in response to this second request, which the Department deemed insufficient to calculate a penalty. However, the evidence shows Respondent produced the only records that it possessed regarding its association with BY Construction. The Department’s proposed penalty does not include an assessment based solely on Respondent’s failure to produce requested records. When an employer fails to provide requested business records within 15 days of the request, the Department is authorized to assess a penalty by imputing the employer's payroll using "the statewide average weekly wage as defined in Section 440.12(2), multiplied by l.5." § 440.107(7)(e), Fla. Stat., and Fla. Admin. Code R. 69L-6.028. Imputing the gross payroll for Ormes, Lopez and Alcatar for the years 2004, 2005, 2006, and 2007, by using the average weekly wage for the type of work, the Department assessed Respondent with a penalty of $138,596.67 and issued an Order of Penalty Assessment to Respondent on October 31, 2007. Petitioner later amended the penalty to $70,272.51, based on the fact that BY Construction was not incorporated until January 1, 2006, and issued a Second Amended Order of Penalty Assessment on December 20, 2007.
Recommendation Based on the Findings of Fact and Conclusions of Law, it is recommended that the Department enter a final order that amends its penalty assessment to reflect one day of non-compliance by Respondent. DONE AND ENTERED this 31st day of March, 2008, in Tallahassee, Leon County, Florida. BRAM D. E. CANTER 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 31st day of March, 2008.
Findings Of Fact Based upon the testimony and evidence received at the hearing, the following facts are found: The Largo Fire Department is comprised of approximately 70 employees and maintain three stations, with a fourth station apparently in the planning stage. The chief administrative officer in full command of the entire Department is the fire chief, who is directly responsible to the City Manager. In descending order of command are two assistant chiefs, three fire captains and twelve fire lieutenants. There are also two fire inspectors, forty-six fire fighters, three or four dispatchers and one secretary. (Exhibit No. 6). Assistant Fire Chiefs - Second in the line of command are the two assistant fire chiefs. They work a standard forty-hour week, 8:00 a.m. to 5:00 p.m., five days a week. Their office is one half block away from the main fire station. If the chief is out of town or unavailable, one of the assistant chiefs assumes command. When the chief and both assistant chiefs are unavailable, either a captain or a lieutenant is designated to be in command. With regard to the personnel evaluations made by either captains or lieutenants, assistant chiefs normally accept the recommendations made by them. On occasion an assistant chief will attach an additional memo to a recommendation submitted by an inferior officer. Assistant chiefs have no authority to fire Department personnel or to prevent merit pay increases. Only the chief has these powers, subject to review by the City Manager. There was testimony that after an applicant goes through certain testing procedures with the City's personnel department, the chief and assistant chiefs make the ultimate decision as to who is hired. Assistant chiefs receive input from captains and lieutenants with regard to purchasing new equipment and personnel transfers. With regard to the budget, assistant chiefs may purchase items within the guidelines of the budget. They make recommendations respecting the formulation of the budget, but the chief makes the ultimate decision as to what will be submitted to the City for the budget. If everything is going well at a fire scene, assistant chiefs stand back and observe rather than assume control. Equipment placements and transfers are made by the assistant chiefs. With regard to collective bargaining, assistant chiefs would directly assisting administering the outcome of the negotiations. Fire Captains - Like fire fighters, captains work a 24-hour shift and then are off 48 hours. They wear the same work uniform as fire fighters, but their dress uniform includes a white, rather than a blue, shirt. The captains eat their meals with and sleep in the same quarters as fire fighters. Each captain is responsible for a third of the combat portion of the Fire and directs the operations of the officers and men on their particular shift. On the fire scene, captains are the working supervisor and perform the normal functions of search and rescue. Around the station, captains participate in the minimal domestic and maintenance duties and tasks as part of a team effort. In the event that both the chief and assistant chief are absent, a captain designated by the chief assumed the duties and responsibilities of an assistant chief. With regard to authority to transfer men, discipline men and make policy, there was testimony that such authority is solely in the form of making recommendations in those areas. A lower grade officer or fire fighter can also submit written reports or charges concerning disciplinary action. While the job description for captain's requires them to make thorough weekly inspections of each station, apparatus and personnel the chief has been personally making such inspections for the past several months. While captains are required to keep records of sick leave, the the administrative secretary actually handles all leave records. Captains do have the authority to visit persons on sick leave if there is reason to believe a sick leave is not legitimate. The job description requires captains to forward to headquarters every six months a written personnel evaluation report on all personnel under their command. This is done by a standardized form sent to the captains by City's personnel department. Captains also have the authority to give mutual aid assistance when requested by a neighboring unit by sending men and equipment. While captains have the authority to make changes within their subordinates' command, in emergency situations, most changes in command come out in the form of memos from the administrative chief. In the captain's absence, his duties are assumed by a lieutenant. If a lieutenant is not present the lieutenant's duties are assumed by what is known as a lead fire fighter - a senior fire fighter by virtue of tenure and training. Captains do not formulate policies applicable to the Fire Department nor do they prepare of administer the budget. They can make recommendations with regard to the budget, as can lieutenants and other officers. They cannot buy equipment, nor can they move equipment between stations without written permission. Changes in the organizational structure are not discussed with captains. Any type of procedural recommendation which is made is discussed among the three captains and is then presented to the assistant chiefs and chief for final action. It was opined by Captain Lambert that captains would have no duties or responsibilities to management with respect to collective bargaining and that, as a member of a union, there would be no conflict of interest between the performance of their duties and the possibility of grievances filed within the union. It was Captain Lambert's opinion that policy' decisions were implemented, rather than formulated, by him. Fire Lieutenants - There is one lieutenant assigned to work each of three shifts at each of the stations. Lieutenants report to and perform under the general direction of the captain, also known as the shift commander, who reviews the decisions of the lieutenants. In addition to the job description contained in Exhibit No. 6, there was testimony that lieutenants and fire fighters work on the same time schedule, sleep in the same quarters, eat at the same table, prepare meals jointly and perform fire fighting duties jointly. Lieutenants are in charge at the scene of a fire until a senior officer arrives. There was testimony that although lieutenants participate in the normal evaluation procedure which is used as a basis for merit pay increases and they supervise the duties of the men in the station to which they are assigned, their basic duties are fighting fires. Lieutenants do not have anything to do with preparing or administering the budget nor would they work in the City's behalf with regard to collective bargaining negotiations. They have no authority in actually formulating the policy of the Largo Fire Department. If a fire fighter wants to change his schedule or get time off, he would submit a request to a lieutenant or a captain, depending on who was on duty that day. If both were on duty, he would go to a lieutenant. Fire Inspectors - With respect to inspectors, the petitioner simply submitted the job classification contained in Exhibit No. 6 and suggested that none of the tasks enumerated therein meet the statutory criteria of management employees of F.S. Ch. 447. As noted above, it was the City's position that inspectors do not share a community of interest with line personnel that are responsible for fire suppression in that they do not work the same shift and their duties are primarily fire code enforcement rather than fire combat. Dispatchers - The primary duties of dispatchers are to receive and dispatch fire and emergency calls. They dispatch calls solely for the fire department and do not dispatch for the police department or any other city agency. Another of their duties is to maintain files on equipment usage. Dispatchers work eight-hour shifts and eat with the fire fighters when a meal is served during their eight-hour shift. Their uniform is the same as the fire fighters. When a dispatcher is absent from work, a fire fighter fills in for him; although a dispatcher would never fill in for a fire fighter. Dispatchers have nothing to do with formulating policies of the department nor with preparing or administering the budget. They would not assist management in collective bargaining negotiations. Dispatchers are immediately responsible to the lieutenant, then the captain and on up the line of command. One of the four dispatchers of the Largo Fire Department is presently a member of and is represented by the Largo Employees Association, which presently has a collective bargaining agreement with the City. (Exhibit No. 5) This agreement includes public safety dispatchers in the unit. At the time of the hearing the LEA had not yet been certified by PERC. The one dispatcher who testified would prefer to be represented by petitioner, rather than the LEA. Fire Fighters and Chief - As noted above in the introduction, the parties stipulated that fire fighters were properly included in the proposed unit and that the chief is properly excluded from the unit. Recognition history - In the first letter from petitioner's president to the City Manager, recognition was requested for a unit consisting of captains, lieutenants and fire fighters. After the petitioner first spoke to representatives of the City regarding the bargaining unit, the staff assistant to the City Manager first recommended to the Manager that a unit consisting of fire fighters and lieutenants be approved. The City Commission questioned the inclusion of lieutenants. At that point, communications apparently broke down and unfair labor practice charges were filed by both the petitioner and the City. Their charges were subsequently dismissed. After that the petitioner filed its petition for Certification of Representation requesting inclusion of assistant chiefs, captains, inspectors and dispatchers, in addition to lieutenants and fire fighters, since the issue would then be before PERC and PERC could then rule on everybody once and for all. Although petitioner's constitution and by-laws speaks of a unit consisting of the ranks of captain, lieutenant and fire fighter, the same is in the process of being amended. In accordance with F.S. Section 447.307(3)(a) and F.A.C. Rule 8H-3.23, no recommendations are submitted. DONE and ENTERED this 18th day of November, 1975, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: G.R. McClelland, Esquire City Attorney City Hall Largo, Florida 33540 Mr. Robert Jewell City Hall Largo, Florida 33540 Terry A. Furnell 501 South Fort Harrison Clearwater, Florida 33516 Mr. Barry Burkhart 2320 East Bay Drive, No. 135 Clearwater, Florida 33516 Mrs. Lawrence C. Black 152 8th Avenue Southwest Largo, Florida 33540
The Issue The issues in this matter are whether Countrywide Siding and Windows, Inc., failed to secure workers compensation that meets the requirements of Chapter 440, Florida Statutes, and, if so was correctly assessed a penalty for violating, the workers’ compensation laws of Florida.
Findings Of Fact Petitioner is the state agency responsible for enforcing the statutory requirement that employers secure workers’ compensation for the benefit of their employees. § 440.107, Fla. Stat. (2009). Respondent is a corporation domiciled in Florida and engaged in the construction industry. On February 13, 2009, Petitioner’s investigator, Carl Woodall, stopped to spot check a house in the Cabrille Lane area of Panama City, Florida, where he saw workers installing siding. Petitioner’s investigator is the only employee for Petitioner who investigated and developed the substantive evidence in this case. Other employees, who have no direct knowledge of the underlying facts, calculated the amounts of the proposed penalties. Mr. Woodall inquired of the workers and ascertained that they worked for Respondent. The investigator then contacted the Respondent to determine whether Respondent had secured or obtained workers’ compensation insurance under Florida’s workers’ compensation law. Respondent’s representative indicated that it maintained workers’ compensation insurance through Employee Leasing Service (ELS), an employee-leasing company. There is no dispute that in February 2009, Respondent leased its workers from ELS and that under the lease agreement, ELS provided workers’ compensation coverage to Respondent and its leased workers. Other evidence suggested that in past years, Respondent had leased its workers from other employee-leasing companies. The evidence was not specific as to who those companies were. The evidence, while not specific, also suggested that Respondent paid its leased employees bonuses and sometimes loaned them money.1/ In general, employee-leasing agreements provide clerical duties to client companies including tax deduction and workers’ compensation, in exchange for a fee. Client companies’ workers who are registered with the leasing company are employees of the leasing company, not the client company. In this case, the specific contract between ELS and Respondent was not introduced into evidence. Likewise, neither the contract nor the proof of coverage between ELS and its workers’ compensation insurer was introduced into evidence and it is unknown who the actual workers’ compensation insurer was or is. Therefore, there is no credible evidence regarding the specific terms of the contract between ELS, Respondent or the workers’ compensation insurer. Importantly, there is no evidence regarding any fee arrangement between ELS and Respondent showing that workers’ compensation coverage was provided based on payroll or that direct payments to Respondent’s workers constituted payroll under the terms of the lease contract for which workers’ compensation had not been secured. Petitioner’s investigator telephoned ELS and learned from some person (purportedly Ellen Clark) that it did have an employee-leasing contract with Respondent and did maintain workers’ compensation on Respondent’s workers. The investigator was also told that ELS intended to or had cancelled its employee-leasing contract with Respondent effective either February 14 or 15, 2009. No one from ELS testified at the hearing and the substance of the above conversation, as with all the testimony about purported ELS statements, constitutes hearsay that was not corroborated by other credible evidence in the record. As such, the substance of these conversations is not found as facts, other than to establish that Petitioner’s investigator had a conversation with a person purporting to Represent ELS. However, on February 14, 2010, the investigator did not take any action against Respondent since he felt Respondent was in compliance with Florida’s workers’ compensation law. On February 17, 2009, Mr. Woodall again returned to the Cabrille Lane area and observed Respondent’s workers installing siding on a house. One of the workers, Mike Moore, revealed to Mr. Woodall that he was a subcontractor of Respondent, but that the other worker, Ryan Grantham, was Respondent’s employee. The subcontractor was in compliance with Florida’s workers’ compensation laws. In order to find out if the other worker was covered by workers’ compensation insurance, Mr. Woodall met with Ronnie Creed, Respondent’s owner and officer, who was exempt under Florida’s workers’ compensation law. Mr. Creed was unaware of Respondent’s workers’ compensation status but put Mr. Woodall in contact with his wife, India Creed, who was also exempt from Florida’s workers’ compensation law. Ms. Creed told Mr. Woodall that Respondent had received a letter from ELS that day, purportedly notifying it that ELS intended to cancel or had cancelled its employee-leasing contract with Respondent. The letter was not introduced into evidence and it is unclear whether the letter discussed the workers’ compensation insurance coverage ELS maintained on its employees that it leased to Respondent. Again, no one from ELS or its workers’ compensation insurer testified at the hearing regarding its lease or which workers were covered under the lease. The record is devoid of any evidence that these employees were no longer employed by ELS and, more importantly, not covered by ELS’s workers’ compensation coverage on February 17, 2009.2/ Mr. Woodall also checked the Department’s Coverage and Compliance Automated System (CCAS) database. CCAS is a database that maintains information on business entities in Florida and whether they have secured workers’ compensation and /or whether exemptions from workers’ compensation have been granted to eligible company officers. CCAS did not reflect that Respondent had a workers’ compensation insurance policy in place. However, the investigator did not check to see if ELS or another employee-leasing company had such a policy. Similarly, the investigator did not investigate the terms of those contracts and whether those contracts considered any bonuses or loans paid by Petitioner to its employees to be payroll, and if it was, whether any workers’ compensation coverage was dependent on such payments being reported to these companies. As such, the information in that system is hearsay which may or may not indicate a need to investigate further. Moreover, CCAS is simply a database of information reported by others and maintained by the Petitioner. Its reliability is questionable in this case given the multiple contractual entities involved in the provision of workers’ compensation to Respondent and the lack of any direct evidence from those contractual entities. Therefore, the fact that CCAS did not reflect that Respondent had workers’ compensation insurance is not given weight in this Order and is neither clear nor convincing evidence demonstrating that Respondent failed to secure workers’ compensation insurance on February 17, 2009, or for prior years. Based on his belief that Respondent had not secured workers’ compensation on its workers, Mr. Woodall issued a Stop- Work Order and Order of Penalty Assessment and a Request for Production of Business Records for Penalty Assessment Calculation to Respondent (Request) asking for Respondent’s business and financial records related to Respondent’s business and employee leasing for the last 3 years. The records were requested to construct Respondent’s alleged payroll and determine the employees of Respondent. There was no evidence that there was any inquiry into past employment leasing companies that Petitioner contracted with or the terms of those contracts. As with the contract with ELS, there was no inquiry into whether loans or bonuses or any other money paid by Respondent to its workers was considered payroll, required to be reported, or had any impact on workers’ compensation coverage that the leasing companies provided on the employees they leased to Respondent. Respondent complied with the Request and provided the requested business records to Petitioner. Mr. Woodall forwarded the financial records to Petitioner’s penalty calculator, Monica Moye. Beyond checking CCAS, Ms. Moye was not responsible for factually determining whether Respondent had properly secured workers’ compensation insurance during the period under review. Using Respondent’s financial records, Ms. Moye calculated a penalty to be assessed to Respondent based on class code 5645 for siding installation as established by the National Council on Compensation Insurance in the Scopes Manual. She also separated Respondent’s periods of alleged noncompliance based on periodically changing approved manual rates. Approved manual rates are set by the National Council on Compensation Insurance and represent the amounts employers would pay in workers’ compensation premiums for tasks performed by their employees. On March 13, 2009, Petitioner issued an Amended Order of Penalty Assessment, assessing a penalty of $159,002.46 to Respondent. Based on additional records submitted by Respondent, Petitioner recalculated the previously-assessed penalty and issued a 2nd Amended Order of Penalty Assessment to Respondent on June 9, 2009, reducing the assessed penalty to $130,914.99. Additionally, following the hearing, the Department revised the assessed penalty and issued a 3rd Amended Order of Penalty Assessment (3rd Amended Order) reducing the assessed penalty to $130,135.03.3/ The list of employees attached to the 3rd Amended Order of Penalty Assessment contains several incidents of imputed employment listed as “cash,” “unknown” or “Star H.” There is nothing in the record that supports a finding that these amounts were paid for employment purposes. However, the evidence did not establish that Petitioner did not secure workers’ compensation coverage and the issues regarding the correctness of the amount of penalty assessed against Respondent is not addressed in this Recommended Order. Since the evidence did not establish that Respondent failed to secure workers’ compensation, the Stop-work order should be cancelled and the 3rd Amended Order of Penalty Assessment dismissed.
Recommendation Based on the findings of fact and conclusions of law, it is RECOMMENDED that the Department of Financial Services enter a Final Order that Petitioner failed to establish by clear and convincing evidence that Petitioner failed to secure workers’ compensation to its employees and canceling the Stop Work Order and dismissing the 3rd Amended Order of Penalty Assessment. DONE AND ENTERED this 2nd day of April, 2010, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of April, 2010.
The Issue The ultimate issue for determination is whether the Petitioner's discharge by the Respondent constituted discrimination on the basis of handicap within the meaning of the Florida Human Rights Act.
Findings Of Fact Having considered all of the evidence in the record, the Hearing Officer makes the following findings of fact: Petitioner was hired as a Mechanic II (Electrician) by Respondent on January 25, 1982 in the Plant Engineering Department. The term "Mechanic II" denoted Petitioner's pay grade. The term "Electrician" designated Petitioner's speciality. Petitioner's pay grade was changed to Electrician and the Mechanic II pay grade was eliminated by Respondent for all such employees on or about November 16, 1983. Petitioner's duties as an Electrician included ladder work, running conduit and wire, repairing laundry and laboratory equipment and appliances, changing ballasts, and repairing electrical beds and nurse-call equipment. Petitioner performed all of the duties of an electrician, including ladder work until approximately November 27, 1985. Three months after he was employed in 1982, Petitioner injured his back while repairing electrical beds. Repairing electrical beds required much bending and stooping. Petitioner filed for Worker's Compensation benefits for the injury he sustained in repairing electrical beds. Petitioner suffered an off-the-job injury in 1983. Respondent permitted Petitioner to go on medical leave for two months. Petitioner again injured his back while working at the Hospital on or about November 27, 1985. Due to his injury, Petitioner was on leave of absence from November 30, 1985, through December 11, 1985. Petitioner returned to work but again went on leave of absence from January 9, 1986, through February 17, 1986. Petitioner returned to work subject to a "light duty" restriction imposed by his physician. On or about June 10, 1986, Petitioner's physician released him for full duty subject to a 15 pound restriction on any lifting. In September, 1986, Petitioner's physician indicated that it was "probably best" for Petitioner to work only 4 hours per day. The Respondent again allowed Petitioner to work 4 hours per day even though he occupied a full-time, 8 hour per day position. In early October, 1986, Petitioner was released by his physician to perform full duty work, even though Petitioner was restricted to half days. Frank Kleese, Petitioner's foreman, asked Petitioner to investigate a problem with an overhead light. Petitioner refused Kleese's directive and stated that, even though he had been released for full duty work, he would not climb a ladder unless his doctor approved it. Petitioner argued with Kleese and used "strong language". Petitioner became belligerent. Petitioner received reprimands for insubordination. When Petitioner refused Kleese's second request to do ladder work, Petitioner received a reprimand for refusing to do the job assigned to him. Both reprimands were discussed with Petitioner. Petitioner later presented a doctor's note stating he could "return to full active duty," but could work only half days with no ladder work. As a result of Petitioner's half day schedule, other electricians were required to do more work. The department as a whole fell behind in its work. Furthermore, light duty work was not always available for Petitioner. While working half days in late 1986, Petitioner was late to work on three occasions. Petitioner's reason for being late, as explained to Frank Kleese, his foreman, was that Petitioner's injury made it difficult for him to get out of bed in the morning. In November, 1986, Clark, Kleese, and Kunz met with Petitioner and advised him that he could not remain on half days indefinitely. Petitioner was advised that unless his condition was found to have improved by his upcoming doctor's appointment on December 1, 1986, he would be placed on medical leave. On December 1, 1986, Petitioner visited his physician, Dr. Richard D. Strain, Jr. Dr. Strain stated that there was no reason to think that Petitioner's condition would change quickly. Dr. Strain was going to send Petitioner home and put him on physician therapy (i.e., not allow him to work at all). Petitioner asked Dr. Strain if he could work half days, and Dr. Strain agreed. Kleese, Kunz, and Clark met with Petitioner and informed him that he would be placed on medical leave as a result of the Petitioner's medical condition. Continuation of his half-day status without any foreseeable cutoff date was not acceptable to the Respondent. On December 4, 1986, Respondent Benefits Supervisor Ralph Rettig advised Dr. Strain that Petitioner had been placed on medical leave of absence because there were no part-time positions available in Petitioner's department. Rettig requested Dr. Strain to advise him as to whether Petitioner's condition was the result of his injury at work and whether Petitioner would ever improve to the level where he could work more than half day duty. Dr. Strain responded to Mr. Rettig in a letter dated December 22, 1986, which indicated that Petitioner's condition was partially caused by degenerative changes. Dr. Strain further stated: Mr. Cabany tells me he is unable to work more than a half day, and I think that is a reasonable thing for him to do. Certainly, a man of his elderly years with the degenerative changes that he has, with super imposed trauma, that would be a good way to go. Petitioner went on medical leave beginning December 17, 1986. Prior to the beginning of his leave, Petitioner failed to fill out the leave of absence request form. When this came to Rettig's attention, Rettig requested that Vernon Clark send Petitioner the form. Clark wrote to Petitioner and informed him that he must fill out the leave of absence request form Clark had enclosed. Clark further informed Petitioner that he would have to request renewal of his leave when it expired in mid-January, 1987, in accordance with Respondent policies. During a telephone conversation several days prior to the expiration of Petitioner's leave, Clark reminded Petitioner that he still had not sent in the original request form for the leave he was then under. Clark also reminded Petitioner that, if he wished to extend his leave, Petitioner would have to submit a written request for extension. Petitioner eventually sent in the signed request form for the leave of absence which he was then under. The signed form stated: "If I do not request an extension of my Leave prior to expiration . . . my employment at Memorial Respondent will be terminated. . . ." Petitioner never submitted a request for an extension of his leave, and Petitioner was terminated. In February, 1987, Ralph Rettig became aware of a part-time porter position in the Respondent's Dietary Department. Mr. Rettig contacted Petitioner and asked him to meet with Joseph Marino, Administrative Director of Food and Nutrition Services, with regard to a job in the Dietary Department. Marino offered Petitioner a porter position which required only half days and involved no bending or lifting of heavy objects. Marino explained the duties and responsibilities of the position to Petitioner and showed him the work area. Petitioner refused the position because he felt it was "beneath his dignity". Petitioner said virtually the same thing to Rettig. Hospital Benefits Supervisor Rettig, a quadriplegic, was involved throughout in dealing with Petitioner's medical situation. Rettig testified that he has never witnessed discrimination by the Respondent based upon handicap and felt that the Respondent reasonably accommodated Petitioner's back problem. Eighty percent of an Electrician's work at the Respondent involved the use of a ladder. Petitioner could not do ladder work. Petitioner also could not work on ceilings or do much bending or lifting. Petitioner cannot work at all now, still has pain, and has not worked since leaving the Respondent's employ. Petitioner did not know of any available half-day jobs he could have performed at the Hospital other than the porter position that was offered to Petitioner by Mr. Marino. Prior to his 1985 injury, Petitioner had repeatedly requested to work part time as an Electrician because his wife had arthritis and he needed to care for her. Petitioner was consistently turned down because no such part-time position existed in his department. During his employment with Respondent, a few half-day positions existed throughout the Hospital as PBX Operators, Cashiers, and Porters. No part-time Electrician positions in the Plant Engineering Department where Petitioner was employed were ever available. Petitioner occupied a full-time position even though he worked only part-time. Sandy McNeil, a former Electrician, is now a Systems Technician/Welder who works full days on a part-time basis. Mr. McNeil operates a lathe and works full weeks when needed. Petitioner is not a welder and could not perform the duties required of Mr. McNeil. Richmond Blatch is a painter who works a full week every other week. Petitioner is not a painter and could not perform Mr. Blatch's duties. Tom Nottage, another individual who had been working in the Engineering Department, obtained a courier position with the Hospital. For a brief period, Mr. Nottage worked 2 full days a week in the Engineering Department and 3 days week as a courier. Since mid-January, 1987, Mr. Nottage has worked full-time as a courier. His job requires driving over 25,000 miles per year, lifting mail tubs weighing between 20 and 50 pounds, often lifting heavier packages, and getting in and out of his car between 20 and 40 times per day. Petitioner could not perform the duties required of Mr. Nottage. A part-time position could not be created for an Electrician. Electricians are given jobs which frequently carry through from day to day. Permanently employing someone on a half-day, health-restricted basis presented scheduling and work load problems. Jobs that do not carry through from day to day are frequently comprised of so-called bench work. Some bench work requires an entire day to complete. There was not always a half-day's worth of bench work available. During his employment with the Respondent, Petitioner had been receiving Social Security pension benefits. In 1987, Petitioner would have been required to reimburse Social Security for a portion of his pension benefits if he earned more than $8,000,00. Half day employment would have afforded Petitioner the ability to earn the maximum allowed by Social Security. Because Petitioner refused to accept a job for which he was physically qualified, the worker's compensation benefits begun as a result of his injury on the job in 1982, were stopped. If Petitioner had accepted the porter position offered to him by Mr. Marino, his worker's compensation benefits would have compensated him for the wage loss resulting from the lower paying job. Petitioner's termination had no effect on the worker's compensation benefits Respondent was paying Petitioner. Respondent would have gained a financial benefit from retaining Petitioner as a part time Electrician because there would have been less of a wage loss to make up through worker's compensation benefits. Glen Mora and Luis Villanueva, two other Electricians, were injured while Petitioner was working half days. Both individuals were allowed to take medical leave, and return to work on light duty until they returned to full duty status. Both individuals in fact returned to full duty status. Petitioner received a merit pay check from Respondent in 1986 even though Petitioner had not achieved the requisite "fully proficient" rating in his evaluation. Vernon Clark, Director of Plant Engineering, intervened on behalf of Petitioner. Mr. Clark recommended that Petitioner receive the merit pay because Petitioner would have received a higher rating had it not been for Petitioner's injury.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Human Rights Commission issue a Final Order that Respondent is not guilty of discharging Petitioner in violation of the Human Rights Act. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 5th day of October, 1989. DANIEL MANRY 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 5th day of October, 1989. APPENDIX Petitioner submitted no proposed findings of fact. Respondent submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Petitioner's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection NONE The Respondent's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 Included in Findings 1, 2 2-3 Rejected as irrelevant 4-9 Included in Findings 3-10 Included in Finding 35 Included in Finding 11 Included in Finding 25 Included in Finding 26 Included in Finding 31 15-17 Included in Findings 27-30 Included in Finding 17 Included in Finding 36 Included in Finding 32 21-28 Included in Findings 12-21 29 Included in Finding 22 30-31 Included in Findings 33-34 Included in Finding 22 Included in Findings 15, 17 34-35 Included in Findings 23, 24 COPIES FURNISHED: George Cabany 3905 Garfield Street Hollywood, Florida 33021 James S. Bramnick Muller, Mintz, Kornreich, Caldwell, Casey, Crosland & Bramnick, P. A. Hollywood Memorial Respondent Suite 3600 Southeast Financial Center 200 South Biscayne Boulevard Miami, Florida 33131-2338 Donald A. Griffin Executive Director Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1925 Dana Baird General Counsel Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1925
The Issue The issues in this case are whether Respondent violated chapter 440, Florida Statutes (2014),1/ by failing to secure the payment of workers' compensation coverage as alleged in the Stop-work Order and 2nd Amended Order of Penalty Assessment, and if so, the amount of the penalty that should be assessed.
Findings Of Fact The Parties Petitioner, Department of Financial Services, Division of Workers' Compensation, is the state agency responsible for enforcing the requirement in chapter 440 that employers in the state of Florida secure the payment of workers' compensation insurance covering their employees. Respondent, Bargain Bob's Carpets, Inc., is a corporation registered to do business in Florida. Its principal business address is 3954 Byron Drive, Riviera Beach, Florida. The Compliance Investigation As the result of an anonymous referral, Petitioner's compliance investigator, Peter Sileo, investigated Respondent to determine whether it had secured workers' compensation coverage for its employees as required by chapter 440. Before Sileo visited Respondent's business location, he checked the State of Florida Coverage and Compliance Automated System ("CCAS") computer database, which contains information regarding workers' compensation insurance policies that have been obtained by employers. The CCAS database showed no record of any workers' compensation policies covering Respondent's employees having been issued. On Sileo's first visit to Respondent's business location, he observed a man loading carpeting into a van. Upon being questioned, the man identified himself as Gary Persad. He told Sileo that he was a carpet installation subcontractor for Respondent. Sileo checked CCAS and determined that Persad was covered by workers' compensation insurance. On January 23, 2015, Sileo again visited Respondent's business location, which is a warehouse housing large rolls of carpeting and other flooring materials. There, Sileo met John Charles, an owner and corporate officer of Respondent. Charles claimed that he did not know that Respondent was required to have workers' compensation coverage for its employees. Charles told Sileo that Respondent sold flooring but did not install it and that all installation was performed by subcontractors. At the time of the inspection, Sileo determined that Respondent employed five employees: Charles and Calideen, each of whom own more than ten percent of Respondent's business; Alex Stark; Peter Phelps; and Anthony Frenchak. Sileo served a Stop-work Order, ordering Respondent to cease all business operations in the state pending demonstrating compliance with the workers' compensation coverage requirement. Sileo also served a Request for Production of Business Records for Penalty Assessment Calculation. Respondent subsequently demonstrated compliance with the workers' compensation coverage requirement, and Petitioner lifted the Stop-work Order.2/ Respondent also produced business records consisting of spreadsheets showing quarterly payroll, transaction listings, affidavits, insurance coverage documents, and other records. The Penalty Assessment Eric Ruzzo, a penalty auditor with Petitioner, used these records to calculate the penalty to be assessed against Respondent. The $31,061.68 penalty is reflected in the 2nd Amended Order of Penalty Assessment, issued April 23, 2015, that is the subject of this proceeding. To calculate the applicable penalty, Petitioner determines the employer's gross payroll for the two-year period preceding the noncompliance determination——the so-called "penalty period"——from a review of the employer's business records. For days during the penalty period for which records are not provided, Petitioner imputes the gross payroll based on the average weekly wage for the state of Florida. Here, the penalty period commenced on January 24, 2013, and ended on January 23, 2015, the day on which the compliance inspection was conducted, and Respondent was determined to not be in compliance with the workers' compensation coverage requirement. Initially, Respondent produced payroll records that did not identify the subcontractors Respondent hired to install the carpeting. Ruzzo identified the subcontractors using Respondent's transaction records. Respondent subsequently provided information, including affidavits and certificates of exemption regarding the subcontractors it had hired during the penalty period. At all times during the penalty period, Respondent employed four or more non-construction employees, including Charles and Calideen.3/ Based on the business records produced, Ruzzo compiled a list of the persons, including the subcontractors and non-construction employees who were on Respondent's payroll, but not covered by workers' compensation insurance during the penalty period. This list of employees and the penalty computation for each is set forth on the Penalty Calculation Worksheet attached to the 2nd Amended Order of Penalty Assessment. Using the National Council on Compensation Insurance ("NCCI") workers' compensation insurance occupation class codes set forth in the NCCI Scopes Manual, Ruzzo determined the occupation class code applicable to each employee listed on the Penalty Calculation Worksheet. Respondent's subcontractors were classified in NCCI class code 5478, which is the class code for the flooring installation industry. This is consistent with Florida's construction industry class code rule, Florida Administrative Code Rule 69L-6.021(2)(kk), which identifies the installation of carpet and other floor covering as NCCI class code 5478. Alex Stark, Amber Krembs, Jacquelyn Skwarek, and Monica Stahl were classified in NCCI class code 8018, which applies to workers engaged in selling merchandise, including carpeting and linoleum, at the wholesale level. Calideen, Frenchak, and Phelps were classified in NCCI class code 8742, which applies to outside salespersons primarily engaged in sales off of the employer's premises. Charles was classified in NCCI class code 8810, which applies to clerical office employees. Ruzzo then determined the period of Respondent's noncompliance for each employee listed on the Penalty Calculation Worksheet. For each of these employees, Ruzzo determined the gross payroll paid to that employee for the period during which Respondent was noncompliant, divided the employee's gross payroll by 100 pursuant to Petitioner's calculation methodology, then multiplied that amount by the numeric rate set by NCCI for that employee's specific occupation class code. This calculation yielded the workers' compensation coverage premium for that specific employee for which Respondent was noncompliant during the penalty period. The premium amount then was multiplied by two, as required by statute, to yield the penalty to be imposed for failure to provide workers' compensation coverage for that specific employee. Respondent did not provide records covering Charles, Calideen, Stark, Frenchak, or Phelps for the period between January 1, 2015, and January 23, 2015. For this period, Ruzzo imputed the gross payroll for each of these employees using the statewide average weekly wage as defined in section 440.12(2),4/ multiplied by two. Ruzzo then performed the same computations discussed above to determine the penalty amount to be imposed for Respondent's failure to provide workers' compensation for those employees during this time period. Ruzzo added the penalty determined for each employee using actual gross payroll and imputed payroll, as applicable, to arrive at the total penalty assessment amount of $31,061.68. Respondent's Defense Respondent is engaged in the retail sale of various types of flooring, such as carpeting, and hires subcontractors to install the flooring. The evidence did not establish that Respondent engaged in wholesale sales of flooring. Charles testified that Respondent had attempted to operate its business as a "cash and carry" operation in which Respondent would sell the flooring to retail customers, who would take the purchased flooring from Respondent's premises and would be solely responsible for securing their own installation services. In Charles' words, "[t]hat didn't work. The public demanded that we provide them, as part of the sale, installers—— I might be saying it wrong legally, but they demanded that it all be done in one shot." Thus, Respondent began hiring subcontractors to do the installation work. Charles explained that Respondent makes retail sales of flooring to customers, either on Respondent's premises or at the customer's premises through its outside sales people. The flooring is then cut from the roll on Respondent's premises and placed in the installer's vehicle. The installer transports the purchased flooring to, and installs it at, the customer's premises. Charles estimated that Respondent currently does approximately five percent of its business as "cash and carry" sales, and the remaining 95 percent consists of sales requiring installation. Charles testified that he and Calideen, as corporate officers of Respondent, previously had obtained exemptions from the workers' compensation coverage requirements for themselves; however, they were unaware that the exemptions had to be renewed, so their exemptions had expired. As of the date of the 2nd Amended Order of Penalty Assessment, neither Charles nor Calideen possessed valid certificates of exemption from the workers' compensation coverage requirement. Charles testified that Respondent always had tried to operate in compliance with the law. He was of the view that because he and Calideen were exempt from the worker's compensation coverage requirement, Respondent effectively employed only three employees——one fewer than the workers' compensation coverage requirement threshold of four employees applicable to non-construction industry businesses. Charles and Calideen testified that when Respondent initially hired subcontractors, they required copies of their insurance policies, including proof of workers' compensation coverage or exemption therefrom. Calideen testified that thereafter, he and Charles assumed that the subcontractors were in compliance with the workers' compensation laws, and they did not know that they needed to obtain updated certificates of workers' compensation exemption or coverage from the subcontractors. On that basis, Charles asserted that Respondent should not be required to "babysit" its subcontractors to ensure that they are in compliance with the workers' compensation law. Respondent thus asserts that it should not be responsible for securing workers' compensation coverage for subcontractors whose workers' compensation policies or exemptions had expired during the penalty period. The undisputed evidence establishes that Charles' employment entails clerical work. Calideen testified, credibly, that Stark's employment duties entail selling flooring on Respondent's business premises, and that he does not engage in sales off the premises. Calideen testified, credibly, that Frenchak and Phelps primarily are engaged in outside sales off of Respondent's premises. Calideen testified, credibly, that he performs clerical duties rather than sales duties. Calideen and Charles both testified, credibly, that employees Krembs, Skwarek, and Stahl performed computer-related duties for Respondent, such as entering business information into Respondent's computer databases, and that they did not work on Respondent's business premises. Calideen testified, credibly, that subcontractor Mike Smith was hired on a one-time basis to paint parking place stripes at the newly-repaved parking lot behind Respondent's business premises. Findings of Ultimate Fact The credible, persuasive evidence establishes that Respondent is engaged in the retail sale of carpeting and other flooring materials and that Respondent itself does not install the flooring. The credible, persuasive evidence establishes, and the parties stipulated, that Respondent is not a member of the construction industry. The credible, persuasive evidence establishes that at all times during the penalty period, Respondent employed more than four employees who were engaged in non-construction employment. Accordingly, Respondent was required to secure workers' compensation coverage for its employees, including Charles and Calideen, whose previously-issued certificates of exemption had expired and were not in effect during the penalty period. The undisputed evidence establishes that at certain times during the penalty period, Respondent employed subcontractors who performed floor installation. The evidence clearly establishes that the subcontractors, in installing the flooring, perform a service that is integral to Respondent's business and that they work specifically at Respondent's direction for each particular installation job. Even though Respondent is not classified as a member of the construction industry, it nonetheless is a "statutory employer" of its subcontractors, who are members of the construction industry. Thus, Respondent is responsible for securing workers' compensation coverage for its subcontractors who failed to secure an exemption or coverage for themselves.5/ The credible, persuasive evidence establishes that Petitioner correctly calculated the penalty attributable to flooring installation subcontractors for which Respondent was noncompliant during the penalty period. However, the unrebutted evidence establishes that subcontractor Mike Smith was hired on a one-time basis to paint parking lot stripes in Respondent's parking lot. Thus, Petitioner's classification of Smith in NCCI class code 5478—— which is a construction industry code that applies to workers engaged in flooring installation——obviously is incorrect, and no evidence was presented showing the correct NCCI class code in which Smith should be classified. Accordingly, Smith should not be included in Petitioner's calculation of the penalty to be assessed against Respondent. The credible, persuasive evidence establishes that Petitioner correctly calculated the penalty attributable to Respondent's noncompliance with respect to Charles, Frenchak, and Phelps during the penalty period. The credible, persuasive evidence establishes that Stark is engaged in retail sales on Respondent's business premises. However, in calculating the penalty, Petitioner classified Stark in NCCI class code 8018, which applies to salespersons engaged in selling merchandise at the wholesale level, rather than at the retail level. Thus, Petitioner incorrectly classified Stark in NCCI class code 8018. There is no evidence in the record identifying the correct NCCI class code in which Stark should be classified. Accordingly, Stark should not be included in Petitioner's calculation of the penalty to be assessed against Respondent. The credible, persuasive evidence establishes that Calideen performs clerical employment duties and does not perform sales duties, so he should be classified in NCCI class code 8810, rather than in class code 8742. Accordingly, Petitioner should recalculate the portion of the penalty attributable to Respondent's noncompliance for Calideen using NCCI class code 8810. The credible, persuasive evidence establishes that Krembs, Skwarek, and Stahl are not employed as salespersons at the wholesale level. Thus, Petitioner incorrectly classified these employees in NCCI class code 8018. In its Proposed Recommended Order, Petitioner contends that because Respondent disputes the classification of these employees in class code 8018, Respondent is responsible for identifying the correct applicable class code, which it has not done. This position disregards that in this proceeding, Petitioner bears the burden of proof, by clear and convincing evidence, to show that its proposed penalty assessment against Respondent is accurate. Thus, Petitioner——not Respondent——is responsible for correctly identifying the NCCI class codes applicable to Respondent's employees. Here, the credible, persuasive evidence establishes that in calculating the penalty, Petitioner incorrectly classified Krembs, Skwarek, and Stahl in class code 8018,6/ and no evidence was presented showing the correct NCCI class code applicable to these employees. Accordingly, Krembs, Skwarek, and Stahl should not be included in Petitioner's calculation of the penalty to be assessed against Respondent.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner, Department of Financial Services, Division of Workers' Compensation, issue a final order amending the penalty to be assessed against Respondent as follows: Subtracting the penalty assessed for subcontractor Mike Smith, as shown on the Penalty Calculation Worksheet; and Subtracting the penalties assessed for Respondent's alleged noncompliance with respect to employees Amber Krembs, Jacquelyn Skwarek, and Monica Stahl, as shown on the Penalty Calculation Worksheet; and Reclassifying employee Andy Calideen in NCCI class code 8810 and recalculating the portion of the penalty attributable to Respondent's noncompliance for Calideen using this class code; and Reclassifying employee Alexander Stark in NCCI class code 5784 and recalculating the portion of the penalty attributable to Respondent's noncompliance for Stark using this class code. DONE AND ENTERED this 22 day of January, 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 22 day of January, 2016.
The Issue The issue in this case is whether the Petitioner qualifies for the Firefighters Supplemental Compensation Program at the Bachelor level for supplemental compensation at the rate of $110.00 per month.
Findings Of Fact At all times relevant and material to these proceedings, the Petitioner has been employed as a firefighter with the Metro-Dade Fire Department. The Petitioner's primary function with the Metro-Dade Fire Department is as a firefighter. By letter dated May 30, 1991, and received on June 10, 1991, the Petitioner applied to the Respondent for Firefighters Supplemental Compensation at the Bachelor degree level. Three transcripts were submitted with the Petitioner's application. The first was from Miami-Dade Community College, and showed that an Associate of Science degree in Fire Science was awarded to the Petitioner on May 4, 1991. The second transcript was from Broward Community College, showing many courses taken by Petitioner, but no degree awarded. 3/ The third transcript was from Florida International University, and showed that a Bachelor of Science degree with a major in Industrial Technology was awarded to Petitioner on December 12, 1980. Petitioner's Bachelor degree from Florida International University is not based upon, and does not include, any of the courses in fire science that formed the basis for Petitioner's Associate degree from Miami-Dade Community College. 4/ Petitioner's transcript of her Bachelor degree does not reveal a major study concentration area of at least 18 semester hours or 27 quarter hours which is readily identifiable and applicable as fire- related. On or about June 24, 1991, the Respondent notified the Petitioner that she was eligible for the Firefighters Supplemental Compensation Program at the Associate degree level by virtue of her Associate of Science degree in Fire Science from Miami-Dade Community College. On or about June 26, 1991, the Respondent notified the Petitioner that she was not eligible for the Firefighters Supplemental Compensation Program at the Bachelor degree level because Petitioner's major in Industrial Technology from Florida International University was not a recognized Major Study Concentration Area in Rule 4A-37.084. The denial letter cites and quotes the definition of "Bachelor's Degree" at Rule 4A-37.084(3), Florida Administrative Code.
Recommendation For all of the foregoing reasons, it is RECOMMENDED that the Department of Insurance issue a final order in this case denying the Petitioner's application for participation in the Firefighters Supplemental Compensation Program at the Bachelor degree level. 7/ DONE AND ENTERED at Tallahassee, Leon County, Florida, this 17th day of December, 1991. MICHAEL M. PARRISH, 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 17th day of December, 1991.
The Issue The issue in this case is whether Respondent failed to provide workers' compensation insurance coverage for employees, and, if so, what penalty should be assessed.
Findings Of Fact Petitioner is the state agency responsible for, inter alia, monitoring businesses within the state to ensure that such businesses are providing the requisite workers' compensation insurance coverage for all employees. The Division's headquarters are located in Tallahassee, Florida, but its investigators are spread throughout the state in order to more effectively monitor businesses. Respondent is a construction company that has been operating in excess of 30 years. It is a small company and usually only has a few employees at any given time. The company is located in Charlotte Harbor, Florida. Workers' compensation coverage is required if a business entity has one or more employees and is engaged in the construction industry in Florida. Workers' compensation coverage may be secured via three non-mutually exclusive methods: 1) The purchase of a workers' compensation insurance policy; 2) Arranging for the payment of wages and workers' compensation coverage through an employee leasing company; or 3) Applying for and receiving a certificate of exemption from workers' compensation coverage, if certain statutorily-mandated criteria are met. On January 8, 2009, Ira Bender, investigator for the Division, was doing on-site inspections in Port Charlotte, Florida. Bender stopped at the site on Edgewater Drive where new construction was underway at a YMCA. Bender observed a man (later identified as Thomas Woodall) sweeping the floor. Bender questioned Woodall and was told that Woodall worked for Respondent. When asked about his workers' compensation insurance coverage, Woodall advised that his insurance was maintained through Frank Crum Leasing Company ("Crum"). Bender called Crum and found that although Woodall had been carried as an employee of Respondent in the past, he had been released from coverage. The reason for his release was that his employment had been terminated for lack of business. Bender called Respondent to inquire about workers' compensation coverage. He was told that Respondent did not realize Woodall had been dropped from the Crum insurance coverage and that he would be reinstated immediately. In fact, coverage was restarted on that same day. Based on his finding that an employee had been working without coverage, Bender called his supervisor and provided his findings. The supervisor authorized issuance of a SWO based on the findings. The SWO was served on Respondent via hand- delivery at 11:45 a.m., on January 8, 2009. The SWO was also posted at the work site. The Division then requested business records from Respondent in order to determine whether there were any violations. If there were violations, then the Division would ascertain the amount of penalty to assess. Respondent cooperated and submitted the business records, as requested. After review of the business records, the Division issued its first Amended Order of Penalty Assessment ("Order") on January 14, 2009. The process employed by the Division was to locate all uncovered employees, i.e., those working without workers' compensation insurance for any period of time. The employees were then assigned a class code from the National Council on Compensation Insurance (NCCI) publication. Each trade or type of employment is assigned a code which sets the rate to be applied to an individual depending on the type of work he/she is performing. The Division assigned codes to the employees, determined how much the employee had been paid during the period of non-coverage, assigned the rate to the gross pay, and calculated the insurance premium needed to cover the worker for the time in question. A penalty of 1.5 times the premium was then assigned. The Order assessed a total penalty of $21,165.98 against Respondent. Respondent objected to the amount and refused to sign it due to errors contained in the Penalty Worksheet attached to the Order. Signing the Order would have allowed Respondent to return to work, but he refused to sign because he knew it was not correct. Pursuant to discussions between the parties and "additional records received," the Division issued a second Order on January 16, 2009, assessing a penalty of $6,501.27. Respondent believed that the Division was still in error and provided yet additional information--some verbal--to the Division. A third Order was issued on January 21, 2009, reducing the penalty to $3,309.56. However, Respondent still believed the penalty worksheet contained errors. Again, Respondent refused to sign and provided additional information to the Division. The Division issued a fourth Order on January 28, 2009, assessing a penalty of $2,822.24. That Order had an error concerning the spelling of an employee's name, but the penalty amount was correct. Respondent would not sign the fourth Order, because he did not believe he had intentionally violated any statute or rule concerning workers' compensation coverage for his employees. A corrected (fifth amended) Order was ultimately issued on May 19, 2009.1 The fifth Order asserts the amount of penalty now in dispute, which is the same amount appearing in the fourth amended Order. Respondent signed the fifth Order and entered into a payment plan for payment of the penalty, paying a down payment of $1,000 and monthly payments of $30 until paid in full. Respondent takes great offense to the fact that the penalty assessments were not faxed to him more quickly. He maintains that he had every intention to resolve this matter as quickly as possible, but the Division delayed and dragged out the process. The penalty worksheet attached to the fifth Order listed nine "Employee Names" that are subject to the penalty assessment. Each will be discussed below. The first "employee" is listed as "Cash" and is assigned Class Code 5403. This "employee" represents checks found in Respondent's records with the payee listed as "cash- casual labor" totaling $2,178.00 in gross payroll. Code 5403 was assigned because that is the code used by Crum for Respondent's general business. The manual rate for Code 5403 is $24.74. A penalty of $808.26 was assessed for that employee. The second employee is Jacob Prewitt. Prewitt was assigned Class Code 5221, due to the word "driveway" appearing on a check issued to him. Driveway work falls under a lower approved manual rate ($10.37) than general construction. The gross payroll amount was $1,960, and the penalty assigned to Prewitt was $304.88. The third employee is Woodall, assigned a Class Code of 5606, with a manual rate of $3.84. That code is used for supervisors and is, again, not as dangerous an occupation as general construction. The gross payroll for this entry was $1,008, and the penalty assessed for Woodall was $58.07. Cash is the fourth employee and has been covered in the discussion in paragraph 16, above. Barry Lawrence is the fifth employee; he is assigned Class Code 5437 as a cabinet maker/installer with a manual rate of $13.01. Lawrence had a Verification Letter issued by the Division indicating he was exempt from workers' compensation coverage. However, that exemption was limited to cabinet- making. By installing the cabinets, Lawrence performed work outside his exemption status. The gross payroll for his work was $6,200, and the penalty assessed for Lawrence was $1,209.33. Respondent was completely unaware that the exemption letter did not cover installation and had, in fact, always allowed cabinet- makers to install the cabinets as well. Brunderman Builders is listed as the sixth employee. It is assigned Class Code 5403 with a manual rate of $14.39. The gross payroll for this entry was $550, resulting in a penalty assessment of $118.73. The seventh employee is Jorge Gonzolas, assigned Class Code 5403, the general contracting code. Gonzolas was the employee of a contractor who was subcontracting with Respondent. The contractor died unexpectedly, and Gonzolas was left without payment for the work he had performed. Respondent generously decided to pay Gonzolas for his work, thereby, effectively making Gonzolas a de facto employee. The amount paid Gonzolas was $599.00; the penalty assessed for Gonzolas was $129.30. Woodall is again listed as employee number eight, this time with Class Code 5610, reflecting casual labor he did on one date that his insurance was not in place. The payroll amount for this work was $37.50. The penalty assessed for Woodall was $4.02. The ninth employee was Julio Garcia, assigned Class Code 8742 for outside sales, with a manual rate of $.64. The payroll amount for Garcia was $1,300. His penalty assessment amount was $12.48. Garcia was another one of the deceased subcontractor's employees that Respondent volunteered to pay for work Garcia had performed. The total payroll at issue for Respondent was $14,477.50. The total premium for that amount of payroll would have been $1,881.48, and the penalty assessed was $2,822.84. This is a fairly insignificant portion of Respondent's $5.5 million annual payroll. Respondent did not intentionally attempt to avoid the payment of workers' compensation insurance for its employees. There is no pattern of avoidance or indication that non-payment was Respondent's goal. Rather, there are plausible and reasonable explanations about the unpaid premiums. For Woodall, Respondent believed he was still covered through the Crum policy. For Gonzolas and Garcia, Respondent was simply attempting to be a nice guy. For Prewitt, the employee's exemption had unknowingly lapsed. For Lawrence, Respondent relied upon a Verification Letter from the state, but misinterpreted its scope. The Division, on the other hand, only pursued Respondent based on an actual finding of non-coverage. But for Woodall's presence at a work site doing manual labor (sweeping the floor), the Division would not have looked at Respondent's records. There is no indication the Division acted other than in strict accordance to its governing rules.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Petitioner, Department of Financial Services, Division of Workers' Compensation, upholding the assessment of a penalty of $2,822.24 against Respondent, Brunderman Building Company, Inc. DONE AND ENTERED this 9th day of October, 2009, in Tallahassee, Leon County, Florida. R. BRUCE MCKIBBEN 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 9th day of October, 2009.
The Issue The issue in this case is whether the Petitioner is entitled to supplemental compensation pursuant to Section 633.382(2)(a)2, Florida Statutes.
Findings Of Fact The Petitioner is certified as a firefighter. She has been so certified at all material times. The Petitioner is presently employed as a "firefighter-paramedic" with the City of Rivera Beach Fire Department. She has been so employed at all material times. In her present position the Petitioner performs the "essential job functions" described in her job description. Those functions are: Lays, connects and places hose line in operation. Raises and climbs ladders. Enters building and other fire involved areas. Uses extinguishers, bars, hooks, lines, and axes and other hand equipment. Ventilates burning buildings and structures. Throws salvage covers and removes debris. Makes regular inspections of apparatus and equipment and notifies supervisor of defects. Assists Driver-Engineer routine maintenance and apparatus check-out as required. Makes visual and physical inspections of buildings to locate fire hazards. Rescues and removes individuals from danger. Administers Advanced Life Support medical treatment to sick, injured or afflicted persons. Makes periodic inspections of buildings to locate fire hazards. Performs physical cleaning and maintenance tasks on department buildings and equipment using brooms, mops, vacuum cleaners, etc. Performs hydrant maintenance. Attends training and drill sessions in such subjects as firefighting and inspection methods, equipment operations and emergency medical treatment. In her present position the Petitioner is required to have and use the "knowledge, skills, and abilities" described in her job description. The required knowledge, skills, and abilities set forth in the job description are: Knowledge of the street locations, geography and takes of construction in the City. Knowledge of advanced Life Support Emergency Medical procedures, practices and techniques. Knowledge of various types of fire hazards of the City. Knowledge and skill in the use of Advanced Life Support (ALS) emergency medical treatment, practices, and procedures. Knowledge of firefighting techniques, policies, procedures and practices. Ability to learn and perform many and varied fighting techniques and procedures. Ability to understand and follow oral and written instructions. Ability to perform prolonged and arduous work under adverse conditions. Ability to work at heights. Ability to drive fire apparatus over the road safely under emergency conditions. Skill in the use and maintenance of firefighting equipment. In 1987 the Petitioner was awarded a Bachelor of Liberal Studies degree, with a major in Liberal Studies, by Barry University. Review of the Petitioner's transcript from Barry University does not reveal any course that appears to be "readily identifiable as applicable to fire department duties" performed by the Petitioner in her present position.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered denying the Petitioner's application for Firefighters' Supplemental Compensation. DONE AND ENTERED this 26th of March, 1999, in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us. Filed with the Clerk of the Division of Administrative Hearings this 26th of March, 1999. COPIES FURNISHED: Maria Fonzi-Gonzalez 212 Southwest 12th Avenue Boynton Beach, Florida 33435 Maria Fonzi-Gonzalez 14915 78th Place, North Loxahatchee, Florida 33470 Elenita Gomez, Esquire Department of Insurance 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Honorable Bill Nelson State Treasurer and Insurance Commissioner Department of Insurance The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Daniel Y. Sumner, General Counsel Department of Insurance The Capital, Lower Level 26 Tallahassee, Florida 32399-0300
The Issue The issues are whether Respondent, Almirola Building Services, Inc. (“Respondent”), failed to secure workers’ compensation coverage for its employees; and, if so, whether the Department of Financial Services, Division of Workers’ Compensation (“Petitioner” or “Department”), correctly calculated the penalty assessment imposed against Respondent.
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 pursuant to section 440.107. Respondent is a Florida corporation established on May 8, 2016. Respondent has operated since 2007, providing roofing, repairs, and painting services, primarily on residential structures. According to the 2018 Annual Report filed with the Florida Secretary of State, no officers are indicated, but Juan Carlos Almirola, Caridad Almirola, and Karina Almirola are each listed as directors of the company. Respondent operates out of an office at 4715 Mullins Road, Tampa, Florida 33614, and provides its services in Tampa, Clearwater, St. Petersburg, and Pasco County, Florida. Respondent does not directly employ workers to perform the roofing, repairs, and painting services that it provides to customers. Respondent asserts that it does not utilize subcontractors to provide roofing, repairs, and painting services. Rather, Respondent asserts that it “borrows” employees from DeVito Builders, Inc. (“DeVito”), to perform roofing, repairs, and painting services. Pursuant to this “borrowing” process, Respondent pays DeVito for the services of DeVito’s employees, who then perform the actual roofing, repairs, and painting services for Respondent’s customers. No evidence was presented that DeVito was ever a licensed employee leasing company authorized to lend employees to other entities. On May 15, 2018, a company called Maurer and Maurer was contracted to perform a re-roof at 518 West 122nd Avenue, Tampa, Florida. Maurer and Maurer subcontracted that re-roof to Respondent, i.e., Respondent performed the work for which Maurer and Maurer was contractually obligated to complete. Respondent, through Karina Almirola, pulled a permit for the job on May 10, 2018. The Hillsborough County permit number is ROF38978. Respondent then subcontracted the re-roof to DeVito, from whom Respondent asserts it “borrowed” employees to complete the work originally contracted by Maurer and Maurer. For purposes of workers’ compensation law, Respondent, which was Maurer and Maurer’s subcontractor, subsequently contracted its requirements under the original contract to a sub-subcontractor, specifically DeVito. Respondent identified the employees being “borrowed” for the re-roof on May 15, 2018, as Didier Rodriguez, Rolando Perez- Perez, Martin Barrera Huerta, and Octavio Leon. Munal Abedrabbo is an investigator for Petitioner, who investigates worksites to determine if employers have secured the payment of workers’ compensation for their employees. On May 15, 2018, Mr. Abedrabbo investigated the worksite at 518 West 122nd Avenue, Tampa, Florida, a residential home. Mr. Abedrabbo testified that he observed six individuals on the roof of the home actively engaged in tearing off the existing roof by removing the shingles and dumping the shingles into a dumpster. The individuals observed at the worksite were performing activities consistent with National Council on Compensation Insurance (“NCCI”) class code 5551, “Roofing – All Kinds & Drivers.” The six individuals found at the worksite by Mr. Abedrabbo identified themselves to Mr. Abedrabbo as Didier Rodriguez, Rolando Perez-Perez, Martin Barrera Huerta, Moises Enrique Castro, Octavio Leon, and Lencho Martinez. Didier Rodriguez identified himself to Mr. Abedrabbo as the crew leader and said that the workers on-site worked for “Carlos.” A phone number for “Carlos” was on a work trailer parked at the worksite, which had Respondent’s company name and contractor license number on it. Mr. Abedrabbo placed a call to “Carlos,” who said he was close to the worksite and would go there. Mr. Abedrabbo identified “Carlos” as Juan Carlos Almirola because Juan Carlos Almirola arrived at the worksite in response to Mr. Abedrabbo’s telephone call to the “Carlos” listed on the work trailer. While waiting for Juan Carlos Almirola to arrive, Mr. Abedrabbo searched Petitioner’s Coverage and Compliance Automated System (“CCAS”) database for workers’ compensation coverage and any exemptions held by Respondent. CCAS contains workers’ compensation insurance information, as well as workers’ compensation exemptions. The workers’ compensation insurance information in CCAS comes from the NCCI, which obtains that information directly from insurance carriers. All carriers writing workers’ compensation policies must notify Petitioner within 21 days of writing a policy pursuant to section 440.185(6). Petitioner grants exemptions and then inputs that data into CCAS where Mr. Abedrabbo would reasonably expect to find such information if it existed. Mr. Abedrabbo’s search of CCAS revealed that on May 15, 2018, Respondent had no workers’ compensation insurance coverage and only one exemption, for Karina Almirola. There were no active exemptions for Juan Carlos Almirola and Caridad Almirola on that date. Mr. Almirola was an active participant in the roofing job. Ms. Caridad Almirola works in the office and runs errands and secures notices of commencement for the company. Mr. Almirola informed Mr. Abedrabbo that Karina Almirola, a licensed roofing contractor, had pulled the building permit for the job and that Respondent subcontracted the work to DeVito. Mr. Almirola further indicated that the workers present were working for DeVito. Mr. Abedrabbo observed a copy of the building permit pulled by Respondent, which was posted at the worksite. On May 15, 2018, DeVito secured the payment of workers’ compensation solely through an employee leasing agreement with SouthEast Personnel Leasing, Inc. (“SouthEast”). Of the six individuals on-site, DeVito’s employee leasing agreement covered only two, Rolando Perez-Perez and Didier Rodriguez. On May 15, 2018, DeVito had one active workers’ compensation exemption, which was for Nicholas DeVito. Neither Respondent nor DeVito purchased a policy of workers’ compensation insurance at any time relevant to this proceeding. Mr. Abedrabbo contacted Nicholas DeVito of DeVito, who confirmed that the workers on-site were working for DeVito. Mr. Abedrabbo informed him that DeVito had not added four of the six workers present to the employee leasing agreement, to which Mr. DeVito replied that DeVito would add them by the end of the day. At hearing, Respondent presented the testimony of Elizabeth Hernandez, who handles human resources and payroll for DeVito, as well as handling paperwork for when Respondent “borrows” employees from DeVito. Ms. Hernandez claimed that DeVito employed Martin Barrera Huerta and Octavio Leon for the first time on May 15, 2018, but that Moises Castro and Lencho Martinez were never hired by DeVito. Ms. Hernandez claimed that DeVito employed Martin Barrera Huerta and Octavio Leon because they filled out applications for DeVito’s employee leasing agreement. Ms. Hernandez claimed that DeVito did not hire Moises Castro and Lencho Martinez because DeVito did not add Moises Castro and Lencho Martinez to DeVito’s employee leasing agreement. Ms. Hernandez further claimed that DeVito did not hire Moises Castro and Lencho Martinez because DeVito ultimately did not pay them. Ms. Martinez’s claims of the employment relationship between DeVito and Martin Barrera Huerta, Octavio Leon, Moises Enrique Castro, and Lencho Martinez are directly contradicted by the defined terms of Florida’s Workers’ Compensation Law, as detailed below. Martin Barrera Huerta and Octavio Leon had not yet been hired by DeVito to perform the roofing job on May 15, 2018, but had received applications for employment from DeVito, which they had not yet returned completed to the company. Moises Enrique Castro, and Lencho Martinez were hired by DeVito to perform a re-roof on May 15, 2018, which was their first day on the job with DeVito. Respondent did not request an employee leasing roster from DeVito prior to the commencement of the work at the worksite. In this regard, Respondent affirmatively assumed the risk that DeVito may not have had required workers’ compensation coverage in place for its employees. Based on the findings of his investigation, Mr. Abedrabbo determined that Respondent failed to ensure that its subcontractor, DeVito, secured the payment of workers’ compensation for its employees. Section 440.10(b) provides that when a contractor sublets any part of its contract to a subcontractor, the employees of such contractor and subcontractor are deemed to be employed in one and the same business and the contractor shall be liable for the payment of compensation to all such employees. As a result, on May 15, 2018, Petitioner issued Respondent a Stop-Work Order for Specific Worksite Only and Order of Penalty Assessment for engaging employees in the construction industry without securing the payment of workers’ compensation. On May 15, 2018, Petitioner issued Respondent a Request for Production of Business Records for Penalty Assessment Calculation. The Request for Production of Business Records for Penalty Assessment Calculation requested several categories of business records from Respondent for the period of September 17, 2017, through May 15, 2018, to determine Respondent’s payroll during that period. Included in the Request for Production of Business Records for Penalty Assessment Calculation was a request for Respondent to provide all business check journals and statements including cleared checks for all open and/or closed business accounts established by Respondent. Respondent was also requested to provide payroll documents including time sheets, time cards and attendance records, earnings records, check stubs and payroll summaries, and federal income tax documents; disbursements including check and cash disbursements; workers compensation coverage information; professional employer organization records; and subcontractor records including all documents which reflect the identity of each subcontractor, the contractual relationship with them, and payments to the subcontractor including, but not limited to: contracts, invoices, check stubs, and check ledgers. Petitioner penalizes employers for the amount of workers’ compensation premiums that they have evaded paying during the preceding two-year period. Petitioner determines evaded premiums by reviewing the employer’s business records. Respondent submitted business records to Petitioner consisting of bank statements, check images, and a check detail report. However, the records Respondent submitted were incomplete. Respondent submitted bank statements for two accounts, a checking account ending in 3595 and a checking account ending in 0052. Respondent failed to submit complete copies of the records for these two accounts. For the account ending in 3595, Respondent failed to produce the account statements for March, April, and May 2018, which were the final three months of the penalty audit period. For the account ending in 0052, Respondent submitted an incomplete statement for March 2018, which was missing the check list. Some of the check images were also missing, which precluded analysis of the corresponding payments. The check detail report provided by Respondent failed to identify whether the checks paid as subcontractor expenses and payroll expenses were net or gross wages. Because workers’ compensation premiums are based on gross payroll, the Department could not determine Respondent’s payroll without knowing if the amounts in the check detail report were net or gross wages. More significantly, however, an analysis of Respondent’s bank records revealed the possibility that Respondent had another business bank account. Respondent’s bank records included multiple transfers to a checking account ending in 0411. If this account is another business account, then Respondent could have paid additional, uncovered, employees or subcontractors out of that account. If this account was a personal or non-business account, then it could have been excluded from the penalty. Respondent provided no information regarding the owner of this third account, despite Petitioner informing Respondent that this information was needed on September 4 and November 9, 2018. Petitioner calculated an Amended Order of Penalty Assessment, which imposed a $117,013.08 penalty against Respondent. At no point during the penalty audit review period did Respondent secure the payment of workers’ compensation. Respondent failed to submit records sufficient for Petitioner to determine Respondent’s payroll, which required Petitioner to calculate the Amended Order of Penalty Assessment based on completely imputed payroll. The gross payroll for an employer, who provides insufficient records, is imputed at the statewide average weekly wage multiplied by 1.5 for each employee for the period requested for the calculation of the penalty. Petitioner properly included Juan Carlos Almirola and Caridad Almirola in the Amended Order of Penalty Assessment as employees of Respondent because they performed services for Respondent and Respondent remunerated them for those services. The Almirolas’ remuneration for services provided to Respondent is undisputed. The Almirolas further fill positions of authority listed in the articles of incorporation with the Department of State and receive remuneration for services. Juan Carlos Almirola worked for Respondent between September 2017 and May 2018, as an estimator. Respondent paid him a salary for this work. Although Juan Carlos Almirola was listed on the SouthEast employee leasing roster for DeVito, this coverage was only effective for work that he performed while he was being paid by SouthEast. Caridad Almirola worked for Respondent full time between September 2017 and May 2018, pulling permits, recording notices of commencement, and running errands. Respondent paid her a salary for this work. Respondent’s subcontractor, DeVito, failed to secure the payment of workers’ compensation for its employees Lencho Martinez, Martin Barrera Huerta, Moises Enrique Castro, and Octavio Leon on May 15, 2018. Because Respondent subcontracted its obligations under the Maurer and Maurer contract to DeVito, which failed to secure workers’ compensation coverage, Respondent became the statutory employer of DeVito’s unsecured employees by operation of law. Respondent, therefore, had four employees required to have workers’ compensation: Juan Carlos Almirola, Caridad Almirola, Martin Barrera Huerta, and Octavio Leon. As described above, Juan Carlos Almirola and Caridad Almirola had no active exemptions and were thus required to have coverage; and Martin Barrera Huerta and Octavio Leon were required to have coverage in place prior to their beginning work for Respondent on May 15, 2018, even though that was their first day working for Respondent or DeVito. In a penalty based on imputed payroll, an employer’s period of noncompliance shall be either the same time period requested in the Request for Production of Business Records for Penalty Assessment Calculation or an alternative period of noncompliance as determined by Petitioner, whichever is less. In this case, Respondent has been in operation since 2007, but Petitioner requested business records from September 19, 2017, through May 15, 2018, which became the period of noncompliance. Between September 2017 and May 2018, Respondent continuously operated without securing workers’ compensation for its employees. Juan Carlos Almirola and Caridad Almirola acquired workers’ compensation exemptions on May 16, 2018, after the end of the period of noncompliance. When Petitioner calculates a penalty based on imputed payroll, Petitioner assigns the employer’s employees to the highest rated workers’ compensation classification code based upon records submitted or the investigator’s physical observation of any employee’s activities. In this case, Mr. Abedrabbo observed the employees on-site conducting roofing activities, which was the highest rated code indicated by the investigation. Petitioner applied the corresponding NCCI class code, 5551, for all of Respondent’s employees for the entire period of noncompliance. Petitioner determines the amount of evaded workers’ compensation insurance premiums by multiplying the employer’s gross payroll by the approved manual rates. Because Respondent failed to provide sufficient records to determine its payroll, Petitioner imputed Respondent’s gross payroll at 1.5 times the statewide average weekly wage for each employee. The approved manual rate is the workers’ compensation premium dollar amount associated with each class code expressed as dollars per $100 of gross payroll. Petitioner determined the evaded premium by multiplying Respondent’s imputed gross payroll by the approved manual rates. Petitioner then multiplied the evaded premium by two which resulted in a penalty of $117,013.08. Petitioner has demonstrated by clear and convincing evidence that Respondent violated Florida’s Workers’ Compensation Law by employing employees in the construction industry without securing the payment of workers’ compensation or elections to be workers’ compensation exempt, which required the issuance of the Stop-Work Order for Specific Worksite Only and Order of Penalty Assessment. Petitioner further demonstrated by clear and convincing evidence that Respondent failed to submit sufficient records for Petitioner to determine Respondent’s payroll during the penalty audit review period. However, based upon the findings above that only four of the eight employees in question were working for all or part of the period of noncompliance, that penalty assessment must be adjusted to remove any calculations for Rolando Perez-Perez, Didier Rodriguez, Moises Enrique Castor, and Lencho Martinez since they were either covered for workers’ compensation by SouthEast (Perez-Perez and Rodriguez) or had not yet become employees of DeVito (Castro and Martinez). Accordingly, Petitioner has shown by clear and convincing evidence that Petitioner is correct that some penalty is due, but not the full amount previously calculated by its staff as a penalty for Respondent’s evaded workers’ compensation insurance premium based on imputed gross payroll for the entire period of noncompliance (except for the two employees who worked for only one day of the noncompliance period, May 15, 2018).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order assessing Respondent $58,746.52. DONE AND ENTERED this 14th day of March, 2019, 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 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of March, 2019. COPIES FURNISHED: Leon Melnicoff, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-4229 (eServed) Herbert Fiss, Esquire Herbert W. Fiss, Jr., P.A. 341 South Plant Avenue Tampa, Florida 33606 (eServed) Julie Jones, CP, FRP, Agency Clerk Division of Legal Services Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0390 (eServed)
