The Issue Whether Respondent, Craftmaster Plastering and Stucco, Inc., failed to comply with the coverage requirements of the Workers’ Compensation Law, chapter 440, Florida Statutes; and, if so, what penalty should be assessed pursuant to section 440.107, Florida Statutes (2016).
Findings Of Fact The Department is the state agency responsible for enforcing the requirement of the Workers’ Compensation Law that employers secure the payment of workers’ compensation coverage for their employees. § 440.107, Fla. Stat. (2017). Respondent is a Florida for-profit corporation organized on or about January 1, 2015, which was engaged in the construction industry in Florida at all times relevant hereto. According to the record evidence, Respondent was administratively dissolved on September 23, 2016. No evidence of reinstatement was introduced. According to the Secretary of State’s database, Rasheem Kincey is Respondent’s President, Mecca Kincey is its Vice President, and Ulysses Kincey is its Treasurer. On January 23, 2017, Ms. Loy received a telephone call from Department Compliance Investigator, Carl Woodall, who was onsite at a restaurant undergoing renovations at the intersection of U.S. Highway 98 and Kraft Avenue in Panama City, Florida (the worksite). Mr. Woodall reported his findings to Ms. Loy from a random workers’ compensation compliance check he had completed at the worksite. Based upon Mr. Woodall’s verbal report, Ms. Loy instructed Mr. Woodall to issue the subject Order. According to Ms. Loy, Mr. Woodall observed several workers at the worksite, interviewed them, and recorded notes on a field interview worksheet. Ms. Loy had no personal knowledge of any of the workers at the worksite, did not observe the activities of anyone at the worksite, and did not interview anyone at the worksite. Mr. Woodall did not testify at the final hearing. The Department did not introduce Mr. Woodall’s field interview worksheet into evidence. Ms. Loy reviewed the Coverage and Compliance Automated System (CCAS), which is maintained by the Department, and confirmed Respondent did not have a valid workers’ compensation insurance policy. Mr. Hatten was assigned to calculate the penalty to be imposed for Respondent’s alleged failure to secure workers’ compensation insurance coverage for its employees. From Mr. Woodall’s field interview worksheet, Mr. Hatten retrieved the names Rasheem Kincey, Mecca Kincey, Ulysees Kincey, Brandon White, Mark Kim Wilson, Jerome Bradley, and Brandon Samuel Kincey Smith, and entered those names on his penalty calculation worksheet as Respondent’s uninsured employees for the penalty audit period. In this case, the penalty audit period included the two years immediately preceding the date on which the Order was issued: January 23, 2015 through January 23, 2017. Respondent did not comply with Petitioner’s BRR; therefore, the Department did not have sufficient records to establish Respondent’s payroll during the penalty audit period. Mr. Hatten reviewed CCAS and confirmed that Mecca Kincey, Ulysses Kincey, and Rasheem Kincey had valid workers’ compensation exemptions effective from February 3, 4, and 5, 2015, respectively, through February 2, 3, and 4, 2017, respectively. Respondent’s officers did not have exemptions from workers’ compensation insurance requirements during the audit period between January 26, 2015, and February 2, 3, and 4, 2017, respectively. Mr. Hatten entered these timeframes on the penalty calculation worksheet as periods of non-compliance for the three corporate officers. Mr. Hatten further found Respondent had a workers’ compensation insurance policy effective February through July 2015. Mr. Hatten used this information to establish periods of non-compliance during the audit period. Based upon Mr. Woodall’s notes that he observed workers engaged in stucco application and repair at the worksite, Mr. Hatten assigned the classification code 5022, Masonry, for purposes of calculating the penalty. The classification code was derived from the Scopes Manual published by the National Council on Compensation Insurance (NCCI) and adopted by the Department by Florida Administrative Code Rule 69L-6.021. Mr. Hatten next applied the workers’ compensation insurance rates approved by the Department for workers’ compensation coverage by classification code to each worker during each period of non-compliance. Finally, because Respondent did not submit business records sufficient to establish its payroll during the audit period, Mr. Hatten assigned the statewide average weekly wage in order to calculate Respondent’s payroll to each “employee” and its corporate officers for the periods of non-compliance. Utilizing this imputed methodology, Mr. Hatten calculated a total penalty of $94,544.92 to be imposed on Respondent for failure to secure workers’ compensation insurance for its employees during the periods of non-compliance. The Department served Respondent with an Amended Order of Penalty Assessment on February 23, 2017, imposing the penalty of $94,544.92. Mr. Kincey testified on Respondent’s behalf. Mr. Kincey admitted that he, Ulysses Kincey, and Mecca Kincey were performing stucco work at the worksite on January 23, 2017. Mr. Kincey denied that any of the other individuals, purportedly identified at the worksite by Mr. Woodall, were his employees. As to the individuals named in the Amended Order of Penalty Assessment, Mr. Kincey testified that Jerome Bradley was a cook at the restaurant; Mark Kim Wilson was painting at the worksite, and Mr. Kincey assumed Mr. Wilson was hired by the restaurant owner, Jerry Steele; Brandon Samuel Kincey Smith was Mr. Kincey’s cousin, and he had no idea who had hired Mr. Kincey Smith or what he was doing at the worksite; and that he had never heard of Brandon White and could not identify Mr. White. The Department offered no non-hearsay evidence to rebut Mr. Kincey’s testimony. The record evidence is sufficient to support a finding that Rasheem Kincey, Mecca Kincey, and Ulysees Kincey were performing stucco work at the worksite on January 23, 2017, and were not covered by either workers’ compensation insurance or a valid exemption therefrom, for the periods of non-compliance identified in the penalty calculation worksheet. Mr. Hatton correctly applied the imputed methodology and correctly calculated a penalty of $1,259.64, for Respondent’s failure to obtain workers’ compensation coverage for the three corporate officers. The evidence is insufficient to support the remaining imputed penalty calculation applied to Respondent.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation, enter a final order finding that Respondent, Craftmaster Plastering and Stucco, Inc., failed to secure and maintain required workers’ compensation insurance for its employees, and impose a penalty of $1,259.64. DONE AND ENTERED this 13th day of November, 2017, in Tallahassee, Leon County, Florida. S SUZANNE VAN WYK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th day of November, 2017. COPIES FURNISHED: Michael Joseph Gordon, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-4229 (eServed) Rasheem Kincey Craftmaster Plastering and Stucco, Inc. 129 Nann Street Enterprise, Alabama 36330 Julie Jones, CP, FRP, Agency Clerk Division of Legal Services Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0390 (eServed)
The Issue The 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 Whether David Cooper’s Construction, Inc. (“Respondent”), failed to secure the payment of workers’ compensation insurance coverage for its employees; and, if so, whether the Department of Financial Services, Division of Workers’ Compensation (“Petitioner” or “Department”), correctly calculated the penalty to be assessed against Respondent.
Findings Of Fact The Department is the state agency charged with enforcing the statutory requirement that employers in Florida secure workers’ compensation coverage for their employees. See § 440.107(3), Fla. Stat. Respondent is a Florida corporation engaged in the business of residential construction in Port St. Joe, Florida. At all times relevant hereto, Carl Woodall was a workers’ compensation compliance investigator employed by the Department. Employers may comply with the workers’ compensation coverage requirement by obtaining a workers’ compensation insurance policy or an employee leasing agreement. Corporate officers and members of limited liability companies can elect an exemption from workers’ compensation coverage. See § 440.05, Fla. Stat. On August 12, 2016, Mr. Woodall made an unannounced, random inspection of a worksite at 2912 Garrison Avenue in Port St. Joe, Florida. Mr. Woodall observed two men on the roof of an existing structure at that address who appeared to be framing an addition to the structure. At Mr. Woodall’s request, the two men identified themselves as David Cooper and Macon Stewart. Mr. Cooper identified himself as Respondent’s owner and stated that Mr. Stewart was working for him. Mr. Cooper informed Mr. Woodall that he paid Mr. Stewart by check at the rate of $10 per hour. While at the worksite, Mr. Woodall checked the Coverage and Compliance Automated System (“CCAS”) database, which tracks workers’ compensation insurance coverage and exemption data for employers in Florida. Mr. Woodall’s search of CCAS revealed that Respondent did not have a workers’ compensation insurance policy to cover its employees nor an employee leasing agreement. The search also revealed that Mr. Stewart did not have an active workers’ compensation exemption. Mr. Woodall personally served Mr. Cooper with a Stop-Work Order (“SWO”) and Order of Penalty Assessment on August 12, 2016. Respondent complied with the SWO by making a $1,000 down payment toward the penalty assessment (which had yet to be calculated) and agreeing not to allow Mr. Stewart to work for Respondent until such time as Mr. Stewart obtained an exemption. The Order of Penalty Assessment includes a Request for Production of Business Records (“Request”) which could be used to calculate the amount of the penalty. In response to the Request, Mr. Cooper provided the Department with billing statements, handwritten time sheets, and certificates of exemption for certain employees. Lynne Murcia is a Department penalty auditor. She is tasked with reviewing business records provided by employers and calculating penalties for employers who have been notified they are in violation of workers’ compensation coverage requirements. Ms. Murcia was assigned to calculate the penalty to be assessed against Respondent. Ms. Murcia began by reviewing Respondent’s business records for the audit period, which is the two-year period immediately preceding the date of the SWO. See § 440.107(7)(d), Fla. Stat. The audit period in this case is from February 1, 2015, through January 31, 2017. The Department’s penalty is based on the employer’s payroll to employees during any periods during the audit period in which the employer did not provide workers’ compensation insurance coverage for its employees (“the period of non-compliance”). In this case, the period of non-compliance is the same as the audit period. An employer’s payroll is the amount of wages or other compensation made to employees during the period of non-compliance. See Fla. Admin. Code R. 69L-6.035. Transactions that are considered payroll include direct payment for services rendered, as well as outstanding loans, reimbursements, bonuses, and profit-sharing. Id. Based upon the records received from Respondent, Ms. Murcia identified Respondent’s employees during the period of non-compliance as Joseph Turner, Linda Cooper, and Macon Stewart.2 Compensation paid to those employees during the period of non- compliance was as follows: Joseph Turner, $11,740; Linda Cooper, $2,178; and Macon Stewart, $60. Thus, Respondent’s gross payroll for the period of non-compliance was $13,978. Next, Ms. Murcia consulted the Scopes Manual published by the National Council on Compensation Insurance (“NCCI”) to assign a class code to each employee. The class codes correspond with the type of work performed by an employee and establish the manual rate for workers’ compensation insurance for that type of work. Based upon Mr. Woodall’s observations of the work being performed at the worksite, Ms. Murcia assigned NCCI class code 5645, Carpentry, to Mr. Stewart. 2 Ms. Murcia initially identified additional employees whose wages were included in the Second and Third Amended Orders of Penalty Assessment. For purposes of this Recommended Order, the relevant payroll is that identified in the Fourth Amended Order of Penalty Assessment. Based on Ms. Cooper’s description of her job duties, Ms. Murcia assigned NCCI class code 8810, Clerical, to Ms. Cooper. Respondent’s records did not identify the type of work performed by Mr. Turner. When the business records do not identify the type of work performed by an employee, the Department must apply to the employee the highest manual rate associated with any employee’s activities based on the investigator’s personal observation of work activities. See Fla. Admin. Code R. 69L-6.035(4). Ms. Murcia assigned class code 5645, Carpentry, to Mr. Turner because that class code corresponds with a higher manual rate than 8810, Clerical. Using the gross payroll to each employee, multiplied by the applicable manual rate, Respondent would have paid $1,897.51 in workers’ compensation insurance premiums to cover its employees during the period of non-compliance (“the avoided premium”). The statutory penalty to be assessed is twice the avoided premium. See § 440.107(7)(d)1., Fla. Stat. Ms. Murcia calculated the penalty to be assessed as $3,795. Ms. Murcia applied the correct approved manual rates and correctly utilized the methodology specified in section 440.107(7) and Florida Administrative Code Rules 69L-6.027 and 69L-6.035 to determine the penalty to be imposed.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Financial Services, Division of Workers’ Compensation, finding that David Cooper’s Construction, Inc., violated the workers’ compensation insurance statute and assessing a penalty of $3,795. DONE AND ENTERED this 26th day of January, 2021, in Tallahassee, Leon County, Florida. S SUZANNE VAN WYK Administrative Law Judge 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of January, 2021. COPIES FURNISHED: David Cooper David Cooper’s Construction, Inc. 2449 Hayes Avenue Port St. Joe, Florida 32456 Diane Wint, Agency Clerk Division of Legal Services Department of Financial Service Room 612.14, Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0390 Rean Knopke, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399
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 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 Whether Respondent violated the provisions of chapter 440, Florida Statutes (2017), by failing to secure the payment of workers’ compensation coverage as alleged in the Stop-Work Order and Second Amended Order of Penalty Assessment and, if so, what penalty is appropriate.1/
Findings Of Fact The Department is the state agency responsible for the enforcement of the workers’ compensation insurance coverage requirements established in chapter 440. On September 14, 2017, Investigator Murvin conducted a random workers’ compensation compliance check at a residential construction site at 8256 Lake James Drive in Lakeland, Florida. During the course of the compliance check, Investigator Murvin observed two individuals--Donald Steven Paul, Jr. and Dean Wayne Paul--painting the home. It is undisputed that Respondent had been subcontracted to perform painting services at this site; and that these two individuals were, at the time of Investigator Murvin’s visit, employed by Respondent. After speaking to Donald and Dean Paul, Investigator Murvin used the Department’s database to verify that Respondent did not have workers’ compensation insurance coverage, nor did Donald or Dean Paul have an exemption from the coverage requirements. Donald Paul admitted to Investigator Murvin at the hearing that he did not have workers’ compensation coverage for himself or Dean Paul. Donald Paul explained that he believed that his incorporation with the state and securing of liability insurance provided compliance of all insurance requirements. Based on the information provided by Dean and Donald Paul, and from the database, Investigator Murvin issued a SWO to Respondent on the same day as the site visit. A Request for Production of Business Records was also issued to Respondent. In response to the request for documentation, Respondent provided bank statements that indicated the business began in August 1, 2016. The bank statements also established that there was money being deposited and being paid out, but there was no indication what the money was for or how it was allocated. In other words, there was no way to discern whether the money paid out of the bank account was for employee salaries or other business expenses. In support of its Second Amended Order of Penalty Assessment, the Department prepared a penalty calculation worksheet showing a total penalty owed of $2,090.14. At the hearing, Respondent did not challenge the accuracy or method of calculating the assessed penalty, but only asserted that it believed it had the appropriate coverage and that the penalty was “too high.” Based on the evidence, it is clear Respondent provides construction services and has at least one employee; therefore, it was required to secure workers’ compensation insurance. The Department established by clear and convincing evidence that Respondent failed to secure the payment of workers’ compensation as required by chapter 440. The Department has established through the records submitted and testimony of Auditor Murcia, the appropriate penalty for Respondent’s failure to obtain workers’ compensation coverage is $2,090.14 for the audit period of August 1, 2016, to August 14, 2017.
Recommendation Based on the Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation, enter a final order finding that Respondent, Donald Steven Paul d/b/a/ D. P. Painting of Lakeland, violated the provisions of chapter 440 by failing to secure the payment of workers’ compensation and assessing against Respondent a penalty in the amount of $2,090.14. DONE AND ENTERED this 20th day of April, 2018, in Tallahassee, Leon County, Florida. S HETAL DESAI 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 20th day of April, 2018.
The Issue Whether Petitioner properly issued a Stop Work Order and Penalty Assessment against Respondent for failing to obtain workers' compensation insurance that meets the requirements of chapter 440, Florida Statutes.
Findings Of Fact Petitioner is the state agency responsible for enforcing the Florida Workers' Compensation Law, chapter 440, Florida Statutes, including those provisions that employers shall be liable for, and shall secure and maintain payment of compensation for their employees who suffer work-related injuries. Respondent is an active Florida for-profit corporation, having been first incorporated on November 18, 2004. Respondent has been certified as a Building Contractor by the Department of Business and Professional Regulation, Construction Industry Licensing Board, and holds license No. CBC1253639. On March 28, 2011, Petitioner's investigator, Allen DiMaria, conducted a random inspection of a worksite at 3434 Atlantic Boulevard, Jacksonville, Florida 32207. Mr. DiMaria noticed an individual at the site cutting wood with a circular saw. He introduced himself to the individual and produced identification. Mr. DiMaria then asked the individual what he was doing and for whom he worked. The individual identified himself as Mickey Larry Griffis, Jr., stated that he was cutting wood to replace rotted wood on a privacy fence, and indicated that he was employed by Respondent. He stated that it was his first day working for Respondent, but that he had worked for Respondent in the past. Mr. DiMaria proceeded to call Respondent, as the contractor on the project, and spoke with Robert Miranda. Mr. Miranda indicated that he hired Mr. Griffis to watch work at the site, but not to do the work. Despite Mr. Miranda?s explanation, Mr. DiMaria correctly determined that Mr. Griffis was engaged in “construction” activity for which workers? compensation insurance coverage was required. Mr. DiMaria returned to his office, and consulted the Coverage and Compliance Automated System (CCAS), the statewide database for workers? compensation information, to determine Respondent?s status in the workers? compensation system. Using the CCAS, Mr. DiMaria determined that Respondent had no workers? compensation coverage on file for any employee of the company. Rather, Respondent had an exemption, which is issued by Petitioner to officers of companies, and which serves to exempt said officers from the requirement to obtain workers? compensation insurance for themselves. Pursuant to section 440.05(3), exemptions apply only to the officers of a company, not to employees. Mr. DiMaria conferred with his supervisor, who authorized him to issue a Stop-Work Order and Penalty Assessment. The consolidated Stop-Work Order and Penalty Assessment was issued on March 28, 2011, and posted on the construction site. The Order required Respondent to cease all business operations statewide. The Order also assessed a penalty equal to 1.5 times the amount the employer would have paid in premium when applying the approved manual rates to the employer's payroll for the preceding three-year period, pursuant to section 440.107(7)(d). On March 29, 2011, Mr. DiMaria issued a Request for Production of Business Records for Penalty Assessment Calculation (hereinafter the "Request") to Respondent, requiring Respondent to produce business records for the period of March 29, 2008, through March 28, 2011. The records requested included, but were not limited to business licenses, banking and account records for payroll and disbursements, and records regarding subcontractors and other leased or temporary workers. In response to the Request, Respondent provided Petitioner with certain licenses, proposals, and contracts for work performed. Respondent also sent Certificates of Election to be Exempt from Florida Workers? Compensation Law that had been issued to Respondent by Petitioner. The certificates identified the scope of Respondent?s business as demolition, painting, framing, drywall, and “certified building contractor.” All records received by Mr. DiMaria were sent by him to Cathe Ferguson, who was responsible for performing penalty calculations. Ms. Ferguson reviewed the records in order to determine the appropriate penalty based on the information provided. The penalty worksheet prepared by Ms. Ferguson indicates that no payroll information was supplied to Petitioner by Respondent regarding Mr. Griffis, the employer on-site at the time of the inspection. Therefore, Mr. Griffis? payroll was imputed pursuant to section 440.107(7)(e). Ms. Ferguson used the “Scopes Manual” published by the National Council on Compensation Insurance, and adopted by Petitioner in Florida Administrative Code Rule 69L-6.021, to determine the appropriate level of imputed compensation to Mr. Griffis. She determined that the work being performed on the site fell within class code 6400. Class code 6400 is described in rule 69L-6.021(2)(yyy) as “Fence Installation and Repair - Metal, Vinyl, Wood or Prefabricated Concrete Panel Fence Installed By Hand.” Based on the evidence related to the inspection, which indicated that Mr. Griffis was engaged in the repair of a wooden privacy fence, the work being performed by Mr. Griffis falls within class code 6400. Mr. Griffis? salary was imputed for the full three- year period from March 30, 2008, to March 28, 2011, with a total imputed payroll of $183,327.82. The workers? compensation insurance premium was calculated by multiplying one percent of the gross payroll for that period by the approved manual rate for each quarter, which resulted in a calculated premium of $14,415.62. The penalty was determined by multiplying the calculated premium by 1.5, resulting in the final penalty of $21,623.46.1/ On April 8, 2011, Petitioner issued an Amended Order of Penalty Assessment assessing a monetary penalty amount of $21,623.46 against Respondent. Respondent subsequently provided Petitioner with additional records regarding Respondent?s employees, including a number of bank records. Ms. Ferguson revised her penalty worksheet to reflect that payroll was now based on records, rather than being imputed, included a number of additional employees for fixed periods of employment, and applied different class codes. Ms. Ferguson testified that her application of the class codes was based upon her review of employee records and check ledgers provided by Respondent. Petitioner did not appear at the hearing to offer evidence to the contrary. Ms. Ferguson?s determinations were supported by competent, substantial evidence, and it is found that her determination of the appropriate class code for each employee was accurate. Total payroll for the three-year period in question was determined to be $14,676.25. Applying the same formula as that applied to determine the penalty amount reflected in the Amended Penalty Assessment, the premium was calculated to have been $1,682.15, with a resulting penalty of $2,523.27. On August 11, 2011, Petitioner issued a 2nd Amended Order of Penalty Assessment reducing Respondent's penalty from $21,623.46 to $2,523.27. Petitioner subsequently removed Al Baukecht, Mack Plumbing, and “No Name” from the list of Respondent?s employees. With that change, total payroll for the three-year period in question was reduced to $14,092.00. The premium was calculated to have been $1,646.57, and the penalty reduced from $2,523.27 to $2,469.90. On September 21, 2011, Petitioner issued a 3rd Amended Order of Penalty Assessment reducing Respondent's penalty to $2,469.90.
Recommendation Based on the findings of fact and conclusions of law, it is RECOMMENDED that Petitioner enter a final order assessing a penalty of $2,469.90 against Respondent, Robert Miranda Construction, Inc., for its failure to secure and maintain required workers? compensation insurance for its employees. DONE AND ENTERED this 28th day of December, 2011, in Tallahassee, Leon County, Florida. S E. GARY EARLY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of December, 2011.
Conclusions This cause came on before Tom Gallagher, as Chief Financial Officer of the State of Florida, for consideration of and final agency action on the Recommended Order issued herein on October 4, 2003, by Administrative Law Judge J.D. Parrish. No exceptions to that Recommended Order were filed. , Having reviewed the Recommended Order and the record of this proceeding, and being otherwise apprised in all material premises, IT IS HEREBY ORDERED that the Findings of Fact and Conclusions of Law made and announced by the Administrative Law Judge in the Recommended Order are adopted without exception as the Findings of Fact and Conclusions of law of the agency. IT IS HEREBY FURTHER ORDERED that Janusz Kraj shall pay to the Division of Worker's Compensation a civil penalty in the amount of $1,100, within thirty days from the date hereof, said sum to thereafter bear interest at the rate of 9% per anum until paid. IT {S$ HEREBY FURTHER ORDERED that the Stop Work And Penalty Assessment Order entered by the Division of Worker's Compensation is affirmed, and that Janusz Kraj shall cease all business operations unless and until he provides evidence satisfactory to the Division of Worker's Compensation of having now complied with the workers compensation law by securing the necessary worker's compensation for covered employees and, pursuant to Section 440.107(7)(a), Florida Statutes, paid the civil penalty imposed herein. Lh DONE AND ORDERED this 3° — day of November, 2003. ST ) Sie \eouw Tom Gallag Chief Financial Officer Tomy “ay a PEF LAO
The Issue The issue is whether Petitioner, U.S. Builders, L.P. (USB), timely and effectively requested a final hearing on the issues related to the Order of Penalty Assessment issued by the Department of Financial Services, Division of Workers’ Compensation (Department) in accordance with the requirements of Chapter 120.57, Florida Statutes.
Findings Of Fact USB is a general contractor engaged in the construction industry and is properly registered to conduct business in the State of Florida. The Department is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers' compensation coverage for the benefit of their employees and corporate officers. § 440.107, Fla. Stat. On May 30, 2007, Department Investigator Teresa Quenemoen conducted an investigation or compliance check of USB to determine liability for workers’ compensation coverage. As a result of that investigation, an Order of Penalty Assessment was issued on June 18, 2007, assessing USB a penalty in the amount of $14,983.95. Attached on the opposite side of the page from the Order was a Notice of Rights directing the recipient how to properly respond if he wished to contest the penalty. Quenemoen received a letter, dated June 21, 2007, from J. Roland Fulton, President of USB, which states that he “strongly disagrees” with the Department’s allegations that USB failed to secure adequate workers’ compensation coverage and he wants to “resolve” the matter and “void the Order of Penalty.” If the Department could not make that happen, he wanted to have the “Appeal Procedures.” In a consultation with her Supervisor, Robert Lambert, regarding how to respond to Fulton’s letter, Quenemoen was advised to immediately contact USB and advise them of the Notice of Rights and timeline requirements for any petition they may wish to file. This conversation took place well within the 21-day period for request of formal administrative proceedings. Quenemoen was also advised to provide a copy of the Notice of Rights to USB. Quenemoen, however, delayed taking any action until she contacted USB via letter on August 3, 2007, after the expiration of the timeline requirements for timely filing which occurred on July 9, 2007. Quenemoen indicated within her August 3, 2007 letter to USB that the original date of the Order was the operative date. Robert Lambert testified that the June 21, 2007, letter of USB’s president contained most of the requirements considered necessary for the letter to have been viewed as a petition for administrative proceedings and would have been so considered had the words “Petition for Hearing” appeared at the top of the page. He is also unaware of any prejudice that would result to the Department if the matter of penalty assessment against USB were permitted to proceed to a hearing on the merits of the matter. Quenemoen, in her deposition, opines she did not consider the June 21, 2007, letter to be a petition because she thought it lacked crucial items, such as an explanation of how the party’s substantial interests would be affected by the agency’s decision; disputed items of material fact; and a concise statement of ultimate facts alleged. Quenemoen’s August 3, 2007 letter to USB, inquired why USB had neither paid their penalty nor entered into a Payment Agreement Schedule for Periodic Payment of Penalty, pursuant to Section 440.107, Florida Statutes. The letter re-informed USB that it had 21 days from the receipt of the original Order of Penalty Assessment to file a petition for hearing. On August 23, 2007, the Department received a Petition for Hearing from USB’s counsel. The Department determined the Petition filed by USB met the content criteria but failed on timeliness as it was filed more than forty days past the deadline of July 9, 2007. USB, through the testimony of its President, Mr. Fulton, admitted that he was not “familiar with the law. I did not go look it up.” He also said, “I did not think I needed to go back and consult the textbook of the law.” When asked if he ever decided to consult with a lawyer during the 21-day period, he stated he did not.
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 that Petitioner, U.S. Builders, L.P. (USB), timely and effectively requested a final hearing on the issues related to the Order of Penalty Assessment issued by the Department of Financial Services, Division of Workers’ Compensation (Department) in accordance with the requirements of Chapter 120.57, Florida Statutes, and proceed forthwith with provision of such proceedings. DONE AND ENTERED this 30th day of April, 2008, in Tallahassee, Leon County, Florida. S DON W. DAVIS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of April, 2008. COPIES FURNISHED: William H. Andrews, Esquire Coffman, Coleman, Andrews and Grogan, P.A. Post Office Box 40089 Jacksonville, Florida 32203 Marc A. Klitenic, Esquire Kandel, Klitenic, Kotz and Betten, LLP 502 Washington Avenue Suite 610 Towson, Maryland 21204 Kristian E. Dunn, Esquire Anthony B. Miller, Esquire Department of Financial Services Division of Workers’ Compensation 200 East Gaines Street Tallahassee, Florida 32399-4229 Daniel Y. Sumner, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307 The Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Whether Leonard Smith, d/b/a Site Development & Pipeline Construction, Inc., violated the provisions of chapter 440, Florida Statutes, by failing to secure the payment of workers’ compensation coverage for its employees; and, if so, what penalty is appropriate.
Findings Of Fact The Department is the state agency charged with enforcing workers’ compensation coverage requirements in Florida, including the requirement that employers secure the payment of workers’ compensation coverage for their employees. See § 440.107(3), Fla. Stat. Leonard Smith is an 85-year-old retired contractor. Respondent’s corporate records with the Florida Division of Corporations record that Leonard Smith is Respondent’s owner, president, and registered agent. Respondent was incorporated in February 2014. The company was administratively dissolved in September 2015. However, Leonard Smith still does business using Respondent’s name. On June 13, 2017, Cristina Brigantty, a compliance investigator with the Department, conducted a random workers’ compensation check at a worksite located at 499 Lorraine Leland Street in Dunedin, Florida. At the site, Investigator Brigantty observed an individual operating a compact excavator/tractor commonly called a “Bobcat” (the manufacturer’s name). The Bobcat operator was moving soil and appeared to be grading the site in preparation for the pouring of concrete. Investigator Brigantty approached the individual operating the Bobcat and requested his name. The driver identified himself as Joe Smith. Joe Smith also relayed to Investigator Brigantty that he was just hired by Leonard Smith (no relation) to work on the site. Joe Smith added that he expected to work approximately ten hours and be paid around $2,000 from Leonard Smith for the job. Joe Smith then provided Investigator Brigantty with Leonard Smith’s business card and phone number. At the final hearing, Investigator Brigantty testified that her duties for the Department include inspecting businesses to determine whether the business has obtained the required workers’ compensation insurance coverage. Investigator Brigantty explained that a business that performs construction-related work must have workers’ compensation coverage. Therefore, Investigator Brigantty believed that Respondent should have secured sufficient workers’ compensation coverage for its employee (Joe Smith). After learning Leonard Smith’s name, Investigator Brigantty searched the Department’s Coverage and Compliance Automated System (“CCAS”) database. CCAS is a Department database that tracks workers’ compensation insurance coverage. CCAS contains coverage data from insurance carriers, as well as any workers’ compensation exemptions on file with the Department. Insurance providers are required to report coverage and cancellation information, which the Department uses to update CCAS. While reviewing CCAS, Inspector Brigantty initially noted that the Department did not have on file any request from Leonard Smith, Respondent’s owner-of-record, for an exemption from workers’ compensation coverage. An exemption is a method by which a business’s corporate officer may exempt him or herself from the requirements of chapter 440. See § 440.05, Fla. Stat. Thereafter, based on her research of the information in CCAS, Inspector Brigantty concluded that Respondent did not have a valid exemption for a corporate officer (Leonard Smith) on June 13, 2017. Neither did Respondent carry any workers’ compensation coverage for Joe Smith. After determining that Respondent had not obtained workers’ compensation coverage for Joe Smith on the date of her visit, Investigator Brigantty called Leonard Smith. In the ensuing conversation, Leonard Smith told her that Joe Smith was working for him at the jobsite. On June 22, 2017, Investigator Brigantty issued a Stop- Work Order to Respondent. With the Stop-Work Order, Investigator Brigantty also served Respondent with a Request for Production of Business Records for Penalty Assessment Calculation. Through this document, the Department requested several categories of business records from Respondent for the period of June 14, 2015, through June 13, 2017. The requested documents pertained to: employer identification, payroll documents, account documents, disbursements, workers’ compensation coverage, professional employer organization, temporary labor service, exemptions, subcontractors, and subcontractor’s workers’ compensation coverage. Based on its investigation, the Department determined that Respondent failed to secure adequate workers’ compensation coverage for its employees. Therefore, the Department proceeded to calculate a penalty based on Respondent’s lack of compliance with chapter 440. The Penalty Calculation: Lynne Murcia, the penalty auditor who determined the penalty the Department seeks to impose on Respondent, testified regarding her computation. Ms. Murcia explained that the penalty essentially consists of the “evaded” premium amount, or the actual amount the employer would have paid in workers’ compensation insurance for the uncovered employees, multiplied by two. To calculate the appropriate penalty for Respondent’s failure to secure workers’ compensation coverage, the Department first ascertained Respondent’s period of non-compliance. In determining this time frame, the Department referred to Florida Administrative Code Rule 69L-6.028(2), which directs that: The employer’s time period or periods of non- compliance means the time period(s) within the two years preceding the date the stop- work order was issued to the employer within which the employer failed to secure the payment of compensation pursuant to chapter 440, F.S., and must be either the same time period as set forth in the business records request for the calculation of penalty or an alternative time period or period(s) as determined by the Department, whichever is less. The employer may provide the Department with records from other sources, including, but not limited to, the Department of State, Division of Corporations, the Department of Business and Professional Regulation, licensing offices, and building permitting offices to show an alternative time period or period(s) of non-compliance. Based on these instructions, the Department deduced that Respondent’s period of non-compliance was from June 14, 2015, through June 13, 2017, which was the two-year period preceding the date of the Stop-Work Order.2/ (This two-year period was also the time for which the Department requested business records from Respondent.) After determining Respondent’s period of non- compliance, the Department then calculated the monetary penalty it should impose upon Respondent. In accordance with section 440.107(7)(d)1., the Department must assess against an employer: a penalty equal to 2 times the amount the employer would have paid in premium when applying approved manual rates to the employer’s payroll during periods for which it failed to secure the payment of workers’ compensation required by this chapter within the preceding 2-year period or $1,000, whichever is greater. Therefore, the Department reviewed the business records Respondent provided to ascertain the amount of Respondent’s payroll during the two-year period of non-compliance. In response to the Department’s request for documents, Respondent produced a number of financial records. These records consisted primarily of bank statements and cancelled checks. The documentation Respondent submitted, however, was not comprehensive enough for the Department to determine all the wages Respondent paid to its employees, or the work they performed for the period of June 13, 2015, through June 14, 2017. Specifically, Respondent failed to provide complete bank statements or the corresponding check images for the periods of January 1 through April 30, 2016; June 1 through July 31, 2016; and June 1 through June 13, 2017. Consequently, the Department determined that Respondent did not provide business records sufficient for it to calculate Respondent’s complete payroll or the actual employee wages it paid over the two-year period of non-compliance. Therefore, the Department exercised its option to “impute” Respondent’s weekly payroll from June 13, 2015, through June 14, 2017. In addition to Joe Smith, the Department imputed wages for several other individuals and entities it identified in Respondent’s business records. Based on Respondent’s financial records, between June 14, 2015, and June 13, 2017, Respondent made payments to Earl Cockeranoham, “J.M.L.,” Martin Moore, “Peterson,” and Robert Tamburan. The Department also identified a subcontractor Respondent paid in 2015 named Roger’s Dirt Works, Inc. The Department further determined that at the time of the transaction, Roger’s Dirt Works, Inc., had neither workers’ compensation coverage, nor an exemption for a corporate officer. (Roger’s Dirt Works, Inc., subsequently obtained a valid exemption.) Therefore, the Department included Roger’s Dirt Works, Inc., in the penalty for the period of June 14 through December 31, 2015. The Department also added to Respondent’s payroll “uninsured labor” for the full period of non-compliance. Ms. Murcia relayed that “uninsured labor” reflects undesignated cash transactions for which the recipient was not identified or “validated” by Respondent’s business records and receipts. See Fla. Admin. Code R. 69L-6.035(1)(k). Respondent’s financial records revealed four separate cash payments totaling $6,892. Finally, the Department included Leonard Smith in all periods of non-compliance. The Department explained that Leonard Smith was registered as a corporate officer of Respondent. However, he did not have an active workers’ compensation exemption on file. Therefore, Respondent was also required to carry workers’ compensation for himself. See Fla. Admin. Code R. 69L-6.028(3)(b). To calculate Respondent’s imputed weekly payroll, section 440.107(7)(e) directs that the gross payroll for an employer who provides insufficient business 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. Therefore, the Department obtained the statewide average weekly wage effective at the time of the Stop-Work Order ($886.46)3/ for each identified employee, corporate officer, and subcontractor, then multiplied that number by 1.5. See § 440.107(7)(e), Fla. Stat.; and Fla. Admin. Code R. 69L- 6.028(3)(a). To calculate a penalty based on an imputed payroll, the Department assigns an employer’s employees the highest rated workers’ compensation classification code. The classification code is based on either the business records submitted or the investigator’s observation of the employees’ activities. In this case, the business records Respondent provided to the Department were not sufficient to categorize the exact type of work that Joe Smith, or any of the other identified employees, performed for Respondent over the two-year period of non-compliance. However, during her investigation of the jobsite on June 13, 2017, Investigator Brigantty observed Joe Smith engaging in activities consistent with excavating, such as filling, backfilling, and moving earth. According to the Scopes Manual issued by the National Council on Compensation Insurance, Inc. (“NCCI”), class code 6217 is the “Excavation and Drivers” classification.4/ Consequently, the Department applied class code 6217 to all Respondent’s employees and officer for the entire penalty period. See Fla. Admin. Code R. 69L-6.028(3)(b) and 69L-6.021(2)(mmm)(excavation is classified as “construction activity”). Therefore, to calculate the premium amount for the workers’ compensation insurance Respondent should have paid for its employees, the Department applied the manual rates corresponding to class code 6217. Thereafter, based on: 1) the total periods of non- compliance, 2) Respondent’s calculated payroll for the periods of non-compliance, and 3) the estimated premium for workers’ compensation insurance, the Department issued the Amended Order of Penalty Assessment (“Penalty Assessment”) on October 13, 2017. The Penalty Assessment imposed a penalty of $42,407.08 against Respondent. Ms. Murcia explained that the initial penalty amount was calculated without the benefit of Respondent’s business records. However, after Respondent began providing its financial records in October 2017, the Department reduced its penalty assessment three times. On November 30, 2018, the Department served a 2nd Amended Order of Penalty Assessment, which adjusted the penalty down to $11,958.46. On May 29, 2019 (following leave by the undersigned), the Department produced a 3rd Amended Order of Penalty Assessment, which further reduced the penalty to $8,443.96. Finally, at the final hearing (in light of Leonard Smith’s deposition), the Department introduced a 4th Amended Order of Penalty Assessment with a revised (and final) penalty amount of $8,366.44. At the final hearing, Leonard Smith was adamant that Joe Smith was not his employee on June 13, 2017, or at any point. Instead, Leonard Smith explained that he is just a “broker” to help place workers with construction projects. Leonard Smith claimed that for the last nine years, he simply does estimating and consulting for other small contractors. Consequently, because he no longer engages in construction work or employs any workers, Leonard Smith asserted that he does not need to carry workers’ compensation insurance. Regarding the work that Investigator Brigantty witnessed on June 13, 2017, Leonard Smith testified that a church contacted him about supplying, filling, and spreading dirt on its property. Leonard Smith explained that the church was to pay him $12,840.00 for the job. Leonard Smith referred to Joe Smith as a “private contractor.” Leonard Smith relayed that he met Joe Smith in June 2017. Joe Smith expressed that he was looking for work. Leonard Smith told him about the job in Dunedin, Florida. On June 13, 2017, Leonard Smith met Joe Smith, who had brought his Bobcat, at the church and discussed the job. Leonard Smith then left him to complete the work. Leonard Smith insisted that he never “paid” Joe Smith. Instead, he simply agreed to share the money the church was giving him for the job. Leonard Smith called his own portion a “consulting fee.” On June 23, 2017, after he had received the $12,840.00 from the church, Leonard Smith wrote a check to Joe Smith for $3,440.00. Joe Smith never worked for Respondent or Leonard Smith before or since June 13, 2017. Regarding the payment to Earl Cockeranoham recorded in Respondent’s business records, Leonard Smith testified that Mr. Cockeranoham never worked for him. Instead, the money he paid to Mr. Cockeranoham in 2015 ($460.00) was for work Mr. Cockeranoham performed for the same church. Regarding evidence of a payment to Martin Moore, Leonard Smith testified that he paid Mr. Moore $500.00 in 2016 for Mr. Moore’s rent. Leonard Smith denied that he paid Mr. Moore for construction work. Respondent further testified that Respondent had known Mr. Moore a long time. Joe Smith testified at the final hearing regarding his understanding of his employment relationship with Respondent on June 13, 2017. Initially, Joe Smith explained that he had been out of work for several months and was looking for a job when he met Leonard Smith in June 2017. Leonard Smith offered him the work at the church spreading soil. Joe Smith relayed that he owned the Bobcat and brought it with him to the jobsite. Joe Smith stated that, on June 13, 2017, he met Leonard Smith at the church. There, Leonard Smith informed him that he was to bring an area of land up to proper elevation. They also discussed how they would split payment for the job. Joe Smith understood that the church was going to pay Leonard Smith. Then, Leonard Smith was going to give him his share. Joe Smith confirmed that Leonard Smith sent him approximately $3,000.00 several weeks after the job. Joe Smith also conceded that he was not covered by workers’ compensation on June 13, 2017. Joe Smith further testified that Investigator Brigantty showed up at the worksite the day he started working. Finally, at the final hearing, Joe Smith was dismayed that he had created this issue regarding workers’ compensation coverage. He expressed that he was simply looking for work, and Leonard Smith was kind enough to help him out. Joe Smith did not want to get anyone in trouble. Based on the competent substantial evidence in the record, the Department demonstrated, by clear and convincing evidence, that Respondent failed to secure workers’ compensation insurance coverage or workers’ compensation exemptions for its “employees” for the periods of June 14, 2015, through June 13, 2017. Accordingly, the Department met its burden of proving that Respondent violated chapter 440 and should be penalized. (As more fully addressed below, the evidence in the record does not sufficiently establish that either Earl Cockeranoham or Martin Moore were “employees” of Respondent under chapter 440. Therefore, they should not be included in the penalty calculation.)
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation, enter a final order determining that Respondent, Leonard Smith, d/b/a Site Development & Pipeline Construction, Inc., violated the requirement in chapter 440 to secure workers’ compensation coverage, and imposing a total penalty of $8,219.06. DONE AND ENTERED this 13th day of September, 2019, in Tallahassee, Leon County, Florida. S J. BRUCE CULPEPPER 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 13th day of September, 2019.
