The Issue The issues are whether, under section 440.107, Florida Statutes, Petitioner may calculate a penalty assessment for a failure to secure the payment of workers' compensation for one day as though the failure persisted over two years and whether Petitioner may calculate a penalty assessment based on double the statewide average weekly wage (AWW) when the lone uncovered employee earned $10 per hour.
Findings Of Fact Respondent was incorporated in 2008 by Ineido Soler, Sr., and his son, Ineido Soler, Jr. Since the corporation began operations, the wife of Mr. Soler, Jr., Idalmis Pedrero, has served as the office manager of this family-owned company. At all material times, Respondent has contracted with a personnel leasing company to handle employee matters, such as securing the payment of workers' compensation. Ms. Pedrero's responsibilities include informing the employee leasing company of new hires, so the company can obtain workers' compensation coverage, which typically starts the day following notification. On the afternoon of November 22, 2015, Mr. Soler, Jr., telephoned his wife and told her that he and his father had hired, at the rate of $10 per hour, a new employee, Geony Borrego Lee, who would start work the following morning. Customarily, Ms. Pedrero would immediately inform the employee leasing company. However, Ms. Pedrero was working at home because, six days earlier, she had delivered a baby by caesarian section, and she was still recuperating and tending to her newborn. A fatigued Ms. Pedrero did not notify the employee leasing company that day of the new hire. Late the next morning, Ms. Pedrero was awakened by a call from her husband, who asked her if she had faxed the necessary information to the employee leasing company. Ms. Pedrero admitted that she had not done so, but would do so right away. She faxed the information immediately, so that the employee leasing company could add Mr. Lee to the workers' compensation policy, effective the next day, November 24. Uncovered for November 23, Mr. Lee joined three other employees of Respondent and performed roofing work at a worksite. Late in the afternoon of November 23, one of Petitioner's investigators conducted a random inspection of Respondent's worksite and determined that Respondent had secured the payment of workers' compensation for the three other employees, but not for Mr. Lee. The investigator issued an SWO on the day of the inspection, November 23. The SWO contains three parts. First, the SWO orders Respondent to cease work anywhere in the state of Florida. Second, the SWO includes an Order of Penalty Assessment, which does not contain a specific penalty, but instead sets forth the formula by which Petitioner determines the amount of the penalty to assess. Tracking the statute discussed below, the formula included in the SWO is two times the premium that the employer would have paid when applying approved manual rates to the employer's payroll "during periods for which it has failed to secure the payment of compensation within the preceding 2-year period." Third, the SWO includes a Notice of Rights, which advises Respondent that it may request a chapter 120 hearing. On November 24, Petitioner released the SWO after Respondent had secured the payment of workers' compensation for Mr. Lee. On November 25, the investigator hand delivered to Respondent a Request for Production of Business Records for Penalty Assessment Calculation (Request). The Request covers November 24, 2013, through November 23, 2015, and demands records in eight categories: identification of employer, occupational licenses, payroll documents, account documents, disbursements, contracts for work, identification of subcontractors, and documentation of subcontractors' workers' compensation coverage. The Request identifies "payroll documents" as: all documents that reflect the payroll of the employer . . . including . . . time sheets, time cards, attendance records, earning records, check stubs and payroll summaries for both individual employees and aggregate records; [and] federal income tax documents and other documents reflecting the . . . remuneration paid or payable to each employee . . . . The Request adds: The employer may present for consideration in lieu of the requested records, proof of compliance with F.S. 440 by a workers' compensation policy or coverage through employee leasing for all periods of this request where such coverage existed. If the proof of compliance is verified by the Department the requested records for that time period will not be required. The Request warns: If the employer fails to provide the required business records sufficient to enable the . . . Division of Workers' Compensation to determine the employer's payroll for the period requested for the calculation of the penalty provided in section 440.107(7)(d), F.S., the imputed weekly payroll for each employee shall be the statewide average weekly wage as defined in section 440.12(2), F.S., multiplied by 2. The Department shall impute the employer's payroll at any time after ten, but before the expiration of twenty eight business days after receipt by the employer of [the Request]. (FAC 69L-6.028) . . . . On December 11, 2015, Respondent provided the following documents to Petitioner: itemized invoices, including for workers' compensation premiums, from the employee leasing company to Respondent and checks confirming payment, but the invoices and checks are from December 2011; an employee leasing agreement signed by Respondent on August 1, 2014, and signed by the employee leasing company on August 5, 2014; an employee leasing application for Mr. Lee dated November 23, 2015, showing his date of birth as November 20, 1996, his hourly pay as $10, and his hire date as November 23, 2015; and an employee census dated December 1, 2015, showing, for each employee, a date of hire and, if applicable, date of termination. Partially compliant with the Request, this production omitted any documentation of workers' compensation coverage prior to August 1, 2014, and any documentation of payroll except for Mr. Lee's rate of pay. On December 14, 2015, Respondent filed with Petitioner its request for a chapter 120 hearing. On December 30, 2016, Petitioner issued an Amended Order of Penalty Assessment (Amended Assessment), which proposes to assess a penalty of $63,434.48. On the same date, Petitioner transmitted the file to DOAH. Petitioner issued a Second Amended Order of Penalty Assessment on February 16, 2016, which is mentioned in, but not attached to, the Prehearing Stipulation that was filed on April 26, 2016, but the second amended assessment reportedly leaves the assessed penalty unchanged from the Amended Assessment. In determining the penalty assessment, Petitioner assigned class code 5551 from the National Council on Compensation Insurance because Mr. Lee was performing roofing work; determined that the entire two-year period covered in the Request was applicable; identified the AWW as $841.57 based on information provided by the Florida Department of Economic Opportunity for all employers subject to the Florida Reemployment Assistance Program Law, sections 443.01 et seq., Florida Statutes, for the four calendar quarters ending June 30, 2014; applied the appropriate manual rates for class code 5551 to $841.57, doubled, and divided the result by 100--all of which yielded a result of $31,717.24, which, doubled, results in a total penalty assessment of $63,434.48. There is no dispute that the classification code for Mr. Lee is code 5551, the AWW is $841.57, and the manual rates are 18.03 as of July 1, 2013, 18.62 as of January 1, 2014, and 17.48 as of January 1, 2015. Because Petitioner determined that Respondent had failed to provide sufficient evidence of its payroll, Petitioner calculated the penalty assessment by using the AWW of $841.57, doubled, instead of Mr. Lee's actual rate of $10 per hour. Petitioner's calculations are mathematically correct. For the 5.27 weeks of 2013, the penalty assessment is $3198.58 based on multiplying the AWW, doubled, by the manual rate of 18.03 divided by 100 multiplied by 2 and multiplied by 5.27. For the 52 weeks of 2014, the penalty assessment is $32,593.67 based on multiplying the AWW, doubled, by the manual rate of 18.62 divided by 100 multiplied by 2 and multiplied by 52. For the 46.44 weeks of 2015, the penalty assessment is $27,326.48 based on multiplying the AWW, doubled, by the manual rate of 17.48 divided by 100 multiplied by 2 and multiplied by 46.44. Adding these sums yields a total penalty assessment of $63,118.73, which approximates Petitioner's penalty assessment calculation of $63,434.48. (Mistranscription of difficult-to- read manual rates or a different rule for handling partial weeks may account for the small difference.) Respondent challenges two factors in the imputation formula: the two-year period of noncompliance for Mr. Lee instead of one day's noncompliance and the AWW, doubled, instead of Mr. Lee's $10 per hour rate of pay. Underscoring the differences between the two-year period of noncompliance and double the AWW and the actual period of noncompliance and Mr. Lee's real pay rate, at the start of the two-year period, Mr. Lee was three days past his 16th birthday and residing in Cuba, and Mr. Lee continues to earn $10 per hour as of the date of the hearing. The impact of Petitioner's use of the two-year period of noncompliance and double the AWW is significant. If the calculation were based on a single day, rather than two years, the assessed penalty would be less than the statutory minimum of $1000, which is described below, even if double the AWW were used. One day is 0.14 weeks, so the penalty assessment would be $82.38 based on multiplying the AWW, doubled, by the manual rate of 17.48 divided by 100 multiplied by 2 and multiplied by 0.14. If the calculation were based on the entire two years, rather than a single day, the assessed penalty would be about one-quarter of the proposed assessed penalty, if Mr. Lee's actual weekly rate of pay were used instead of double the AWW. Substituting $400 for twice the AWW in the calculations set forth in paragraph 15 above, the penalty would be $760.14 for 2013, $7746.92 for 2014, and $6494.17 for 2015 for a total of $15,001.23. Explaining why Petitioner treated one day of noncompliance as two years of noncompliance, one of Petitioner's witnesses referred to Mr. Lee as a "placeholder" because the real focus of the imputation formula is the employer. The same witness characterized the imputation formula as a "legal fiction," implying that the formula obviously and, in this case, dramatically departs from the much-smaller penalty that would result from calculating exactly how much premium that Respondent avoided by not covering the modestly paid Mr. Lee on his first day of work. Regardless of how Petitioner characterizes the imputation formula, the statutory mandate, as discussed below, is to determine the "periods" during which Respondent failed to secure workers' compensation insurance within the two-year period covered by the Request. The focus is necessarily on the employee found by the investigator to be uncovered and any other uncovered employees. Petitioner must calculate a penalty based on how long the employee found by the investigator on his inspection has been uncovered, determining how many other employees, if any, in the preceding two years have been uncovered, and calculating a penalty based on how long they were uncovered. There is evidence of one or two gaps in coverage during the relevant two years, but Petitioner has failed to prove such gaps by clear and convincing evidence. One of Petitioner's witnesses testified to a gap of one month "probably" from late January to late February 2015. This witness relied on Petitioner Exhibit 2, but it is completely illegible. Ms. Pedrero testified that Respondent had workers' compensation coverage since 2011, except for a gap, which she thought had occurred prior to August 2014, which is the start date of the current policy. This conflicting evidence does not establish by clear and convincing evidence any gap, and, even if a gap had been proved, no evidence establishes the number of uncovered employees, if any, during such a gap, nor would such a gap justify enlarging the period of noncompliance for Mr. Lee. Ms. Pedrero testified that her mother-in-law, Teresa Marquez cleaned the office and warehouse on an occasional basis, last having worked sometime in 2015. Respondent never secured workers' compensation coverage for Ms. Marquez, but she did no roofing work and appears to have been a casual worker, so her periods of employment during the two-year period covered by the Request would not constitute additional periods for which Respondent failed to secure workers' compensation insurance. Based on the foregoing, Petitioner has proved by clear and convincing evidence only a single day of noncompliance, November 23, concerning one employee, Mr. Lee, within the relevant two-year period for the purpose of calculating the penalty assessment. Likewise, Petitioner has proved by clear and convincing evidence a rate of pay of only $10 per hour for the purpose of calculating the penalty assessment. At no time has Respondent provided payroll records of all its employees for November 23, 2015. Respondent Exhibit E covers payroll for Respondent's employees for a two-week period commencing shortly after November 23, 2015. But the evidence establishes that Mr. Lee's rate of pay was $80 for the day, which, as discussed below, rebuts the statutory presumption of double the AWW.
Recommendation It is RECOMMENDED that the Department of Financial Services enter a final order determining that Respondent has failed to secure the payment of workers' compensation for one employee for one day within the two-year period covered by the Request and imposing an administrative penalty of $1000. DONE AND ENTERED this 19th day of July, 2016, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 19th day of July, 2016. COPIES FURNISHED: Jonathan Anthony Martin, Esquire Trevor S. Suter, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-4229 (eServed) Daniel R. Vega, Esquire Robert Paul Washington, Esquire Taylor Espino Vega & Touron, P.A. 2555 Ponce De Leon Boulevard, Suite 220 Coral Gables, Florida 33134 (eServed) Julie Jones, CP, FRP, Agency Clerk Division of Legal Services Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0390 (eServed)
The Issue The issue to be determined is whether Respondent complied with coverage requirements of the workers' compensation law, Chapter 440, Florida Statutes. A determination of whether Respondent functioned as an employer is a preliminary issue to be resolved.
Findings Of Fact Petitioner is the agency of state government currently responsible for enforcing the requirement of Section 440.107, Florida Statutes, that employers secure the payment of compensation for their employees. Respondent works in the construction industry as a house framer. Petitioner's investigator received a report of a violation of the workers' compensation law on May 21, 2002. When the investigator arrived at the construction site located at 8225 Southwest 103rd Street Road, Ocala, Florida, he observed four men, including Respondent, installing trusses at a residence under construction. Respondent was identified by the other men as the person for whom they were working on the job. All four men told the investigator that they were employees of Dove Enterprises (DOVE). Upon further investigation, the owner of DOVE and also the general contractor of record, Steven Slocumb, stated to the investigator that DOVE operated as the subcontractor for Triple Crown Homes. Slocumb further stated that DOVE, through Slocumb, in turn subcontracted the work to Respondent on a piece rate or square foot basis. Respondent, according to Slocumb, in turn hired the other three men. When Petitioner's investigator returned to the construction site, the four men were gone. None of the four men had an exemption from coverage requirements of the workers' compensation law and none of them had workers' compensation insurance. Consequently, the investigator determined that Respondent was an employer both of himself and the three other workers and that all four were unprotected by workers' compensation insurance. On June 27, 2002, the investigator issued the Stop Work and Penalty Assessment Order at issue in this proceeding. The Order levied the minimum penalty under Section 440.107, Florida Statutes, of $1,100.00. Slocumb and Respondent appeared at the final hearing. Respondent's position was that he and the other three men were employees of DOVE. None of the men produced documentation of such an employment relationship. Rather, documentation presented shows that DOVE paid Respondent for equipment rental. Additionally, payments to Respondent from DOVE for the jobs in question did not include adjustments for employment taxes that would have applied had Respondent been an employee. Respondent's testimony is not credited. Slocumb confirmed the facts determined by the investigator. Slocumb's testimony was candid, direct and creditable.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order confirming the Stop Work and Penalty Assessment Order at issue in this proceeding. DONE AND ENTERED this 8th day of July, 2003, 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 8th day of July, 2003. COPIES FURNISHED: Lawrence Simon 1683 Southeast 160th Terrace Oklawaha, Florida 33379 David C. Hawkins, Esquire Department of Financial Services Division of Workers' Compensation 200 East Gaines Street Tallahassee, Florida 32399-4229 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Lower Level 11 Tallahassee, Florida 32399-0300
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 in this case is whether Respondent violated the provisions of chapter 440, Florida Statutes, by failing to secure the payment of workers' compensation, as alleged in the Stop-Work Order and 3rd Amended Order of Penalty Assessment, and, if so, what penalty is appropriate.
Findings Of Fact Petitioner, Department of Financial Services, Division of Workers' Compensation, is the state agency responsible for enforcing the requirement that employers in the State of Florida secure the payment of workers' compensation for their employees and corporate officers. Respondent, Shriji Krupa, Inc., is a Florida corporation engaged in business operations as a gas station (self-service and convenience-retail) in the State of Florida. Mr. Hemant Parikh, one of Respondent's corporate officers, testified that, on November 20, 2012, Respondent was inspected by Petitioner's Compliance Investigator, Mike Fuller. Mr. Fuller advised Mr. Parikh that Respondent needed to close the store. According to Mr. Hemant Parikh, at the time of inspection, Respondent had two corporate officers and four additional employees. Mr. Parikh explained that, at the time of inspection, Respondent had two store locations with three employees working at each locale. Mr. Shrikant Parikh, another corporate officer, testified that, at the time of inspection, Respondent was operating under the mistaken belief that its corporate officers were exempt from workers' compensation coverage. Pursuant to the record evidence, on November 28, 2012, Mr. Fuller served a Stop-Work Order and Order of Penalty Assessment on Respondent. Pursuant to the Stop-Work Order, Respondent was ordered to cease all business operations for all worksites in the state based on the following: Failure to secure the payment of workers' compensation in violation of sections 440.10(1), 440.38(1), and 440.107(2) F.S., by: failing to obtain coverage that meets the requirements of Chapter 440, F.S., and the Insurance Code. After receiving the Stop-Work Order, on that same date, Respondent obtained workers' compensation coverage with an effective date of November 29, 2012. Respondent has maintained appropriate coverage to date. Following the Stop-Work Order, Respondent submitted various records for Petitioner's review.2/ Petitioner's sole witness was Ms. Lynne Murcia. Ms. Murcia works in Petitioner's Bureau of Compliance wherein she calculates penalties for those employers found in violation of the workers' compensation laws. Ms. Murcia performs approximately 200 penalty calculations per year. Ms. Murcia first became involved with Respondent in January 2013, when she received an assignment to perform a penalty calculation. Ms. Murcia reviewed all records previously submitted by Respondent. From the records received, Ms. Murcia was able to determine that Respondent employed four or more employees on a regular basis. Ms. Murcia explained that "employees" include corporate officers that have not elected to be exempt from workers' compensation. After conducting a search within the Florida Division of Corporations, Ms. Murcia was able to determine that no exemptions existed for Respondent's corporate officers. Ms. Murcia further conducted a proof of coverage search via Petitioner's Coverage and Compliance Automated System ("CCAS"), which is a database that contains all insurance coverage and exemptions for each employer throughout the State of Florida. The search revealed that Respondent possessed appropriate coverage from November 29, 2012, to the present; however, no prior coverage was indicated. Ms. Murcia conducted a penalty assessment for the non- compliance period of November 29, 2009, through November 28, 2012. From the records submitted by Respondent, Ms. Murcia correctly identified Respondent's employees and gross wages paid during the penalty period. All of the individuals listed on the Penalty Worksheet of the 3rd Amended Order of Penalty Assessment, dated August 27, 2014, were "employees" (as that term is defined in section 440.02(15)(a), Florida Statutes) of Respondent during the period of noncompliance listed on the penalty worksheet. From a description of the Respondent's business operations, Ms. Murcia determined Respondent's classification code. She explained that classification codes are established by the National Council of Compensation Insurance ("NCCI"). A classification code is a four-digit code number that is assigned to a specific group of tasks, duties, and responsibilities for a specific grouping of business. Ms. Murcia further testified that the classification codes are associated with a manual rate which is the actual dollar amount of risk associated with a particular code.3/ The manual rates are also established by NCCI. Class Code 8061, used on the penalty worksheet attached to the 3rd Amended Order of Penalty Assessment, and as defined by the NCCI Scopes Manual, is the correct occupational classification for Respondent. From the assigned classification code number, 8061, Ms. Murcia calculated the appropriate manual rate for the penalty period. The manual rates used on the penalty worksheet attached to the 3rd Amended Order of Penalty Assessment are the correct manual rates. The total penalty of $21,205.19 is the correct penalty for the employees listed on the penalty worksheet attached to the 3rd Amended Order of Penalty Assessment.
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 Shriji Krupa, Inc., violated the requirement in chapter 440, Florida Statutes, to secure workers' compensation coverage, and imposing a total penalty assessment of $21,205.19. DONE AND ENTERED this 30th day of October, 2014, in Tallahassee, Leon County, Florida. S TODD P. RESAVAGE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of October, 2014.
The Issue The issues in this case are whether Respondent, Customs Logistics Services, Inc., failed to secure the payment of workers' compensation coverage for its employees in violation of chapter 440, Florida Statutes, and if so, the penalty that should be imposed.
Findings Of Fact The Parties Petitioner is the state agency charged with enforcing the requirement in chapter 440 that employers in Florida secure workers' compensation coverage for their employees. At all times relevant to this proceeding, Respondent was a corporation registered to do business in Florida. Respondent is a family-owned-and-operated customs brokerage service with its principal office located at 6940 Northwest 12th Street, Miami, Florida 33126. At the time of the inspection giving rise to this proceeding, Respondent employed seven or eight employees.2/ The Compliance Inspection On September 29, 2014, Petitioner's compliance inspector, Hector Fluriach, conducted an onsite inspection at Respondent's principal office to determine whether Respondent was in compliance with the workers' compensation coverage requirements established in chapter 440. At that time, Respondent's co-owners, Astrid Escalona and Carlos Henoa, told Fluriach that Respondent employed six employees and two corporate officers, and also paid two family members who did not work at the principal office. Upon inquiry, Escalona and Henoa informed Fluriach that Respondent did not have workers' compensation insurance coverage for its employees. Using Petitioner's Coverage and Compliance Automated System ("CCAS") and the National Council for Compensation Insurance ("NCCI") insurance coverage verification system, Fluriach confirmed that Respondent had not obtained workers' compensation insurance coverage for its employees, and that it was not in compliance with chapter 440 during certain periods within the two years preceding the inspection. Under the NCCI basic occupational classification system and Scopes Manual, six of Respondent's employees are classified as clerical (Code 8810), and one is classified as a driver (Code 7380). None of Respondent's employees is classified as employed within the construction industry. As a private entity employing four or more employees in a non-construction industry occupation, Respondent was required under chapter 440 to provide workers' compensation coverage for its employees. Respondent's corporate officers were eligible under section 440.05 to elect to be exempt from the workers' compensation coverage requirements of chapter 440; however, none had elected to be exempt. Fluriach issued Stop-Work Order No. 14-329-D5 ("Stop- Work Order"), personally served it on Respondent, and explained it to Escalona. The Stop-Work Order included an Order of Penalty Assessment, ordering assessment of a penalty against Respondent in an amount equal to two times the amount Respondent would have paid in workers' compensation coverage premiums when applying the approved manual rates to Respondent's payroll during the periods for which it had failed to secure workers' compensation coverage during the preceding two years (for convenience, hereafter referred to as the "look-back period"). Fluriach also served a business records request, requesting Respondent to provide specified business records3/ for Petitioner's use in determining the penalty. In a series of submittals, Respondent provided the requested business records to Petitioner. The evidence showed that during the two-year look- back period, Respondent did not have workers' compensation coverage for its employees during a substantial portion of the period in which it employed four or more employees, and none of its corporate officers were exempt from the workers' compensation coverage requirement. As such, Respondent violated chapter 440 and, therefore, is subject to penalty under that statute. Petitioner's Computation of Penalty Amount To calculate the applicable penalty, Petitioner must determine, from a review of the employer's business records, the employer's gross payroll for the two-year look-back period. For days during the look-back 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 look-back period for purposes of calculating the applicable penalty commenced on September 30, 2012, and ended on September 29, 2014, the day on which the compliance inspection was conducted. Respondent's business records revealed that Respondent had fewer than four employees between January 1 and March 31, 2013, so Respondent was not required to have workers' compensation coverage for that period. Thus, Petitioner did not assess a penalty against Respondent for that period. For the rest of the look-back period, Respondent employed four or more employees, so was required to obtain workers' compensation coverage for those employees for that portion of the period. Respondent provided business records sufficient for Petitioner to determine Respondent's gross payroll for all but September 30, 2012. For that day, Petitioner imputed Respondent's gross payroll using Florida's statewide average weekly wage. On the basis of Respondent's business records submittals, Petitioner's auditor, Eric Ruzzo, recalculated the penalty to be assessed against Respondent. Petitioner issued an Amended Order of Penalty Assessment on October 17, 2014, imposing a total penalty of $5,617.04. On November 7, 2014, following receipt of additional records, Petitioner issued a Second Amended Order of Penalty Assessment, reducing the penalty to $3,982.52. Finally, after receiving more records, Petitioner issued a Third Amended Order of Penalty Assessment on January 12, 2015, further reducing the penalty to $3,205.70. Each of these penalty assessments was served on Respondent. Petitioner seeks to impose a $3,205.70 penalty against Respondent in this proceeding. In calculating the penalty, Ruzzo examined three-month (i.e., quarterly) periods within the two-year look-back period. Ruzzo identified the occupational class code applicable to each of Respondent's employees. As stated above, all but one of Respondent's employees were classified as clerical, and one of Respondent's employees was classified as a driver. For each employee, Ruzzo determined the gross payroll paid to that employee for the specific quarter in which Respondent was non-compliant during the look-back period, 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 occupational class code. This calculation yielded the workers' compensation coverage premium for that specific employee for the specific quarter for which Respondent was non- compliant during the look-back 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. As previously noted, Respondent did not provide gross payroll records covering September 30, 2012; thus, for that day, Ruzzo imputed the gross payroll for each of Respondent's employees using the statewide average weekly wage as defined in section 440.12(2)4/ multiplied by two. Ruzzo then performed the same computations to yield the penalty amount to be imposed for Respondent's failure to provide workers' compensation on September 30, 2012. Ruzzo then added each penalty amount determined for each employee using actual gross payroll and imputed payroll, to yield the total penalty amount of $5,286.70. Because Respondent had not previously been issued a stop-work order, pursuant to section 440.107(7)(d)1., Petitioner applied a credit toward the penalty in the amount of the initial premium Respondent paid for workers' compensation coverage. Here, the premium payment amount for which Respondent received credit was $2,081.00. This was subtracted from the calculated penalty of $5,286.70, yielding a total penalty of $3,205.70. Respondent's Defense At the final hearing, Escalona testified that she and the other co-owners of Respondent always have attempted to fully comply with every law applicable to Respondent's business, and have never had compliance problems. She testified that neither she nor the other co-owners of Respondent realized that Respondent was required to have workers' compensation coverage for its employees, and they did not intentionally violate the law. Petitioner apparently mailed a memorandum regarding verifying workers' compensation coverage requirements to businesses in the area before it conducted compliance inspections. The memorandum was dated October 8, 2014, and Escalona testified Respondent received it on October 13, 2014, approximately two weeks after the compliance inspection that Fluriach conducted. Escalona asserted that had Respondent received the memorandum before the compliance inspection was conducted, she would have called Petitioner to determine if Respondent needed to obtain workers' compensation coverage, would have asked how to obtain it, and would have obtained coverage for its employees and exemptions for its corporate officers. Escalona testified that the $3,205.70 penalty is a substantial amount that Respondent, a small family-owned business, cannot afford to pay. Findings of Ultimate Fact Petitioner has shown, by clear and convincing evidence, that Respondent violated chapter 440, as charged in the Stop-Work Order, by failing to secure workers' compensation coverage for its employees. Petitioner has shown, by clear and convincing evidence, that the $3,205.70 penalty proposed to be assessed against Respondent pursuant to the Third Amended Penalty Assessment is the correct amount of the penalty to be assessed in this proceeding.
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, Customs Logistics Services, Inc., violated the requirement in chapter 440 to secure workers' compensation coverage and imposing a total penalty of $3,205.70. DONE AND ENTERED this 11th day of August, 2015, 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 11th day of August, 2015.
The Issue Whether Respondent violated the provisions of chapter 440, Florida Statutes, by failing to secure the payment of workers’ compensation as alleged in the Stop-Work Order and 3rd Amended Order of Penalty Assessment, and if so, what penalty is appropriate.
Findings Of Fact The parties agree to the following facts as set forth in the Joint Pre-hearing Stipulation: The Department is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers' compensation for the benefit of their employees and corporate officers. Respondent, a Florida corporation, was engaged in business operations in the state of Florida from November 16, 2010, through November 15, 2013. Respondent received a Stop-Work Order and Order of Penalty Assessment from the Department on November 15, 2013. Respondent received a Request for Production of Business Records for Penalty Assessment Calculation from the Department on November 15, 2013. Respondent received a 3rd Amended Order of Penalty Assessment from the Department on March 11, 2014. Throughout the penalty period, Respondent was an “employer” in the state of Florida, as that term is defined in section 440.02(16), Florida Statutes (2013).1/ All of the individuals listed on the penalty worksheet of the 3rd Amended Order of Penalty Assessment were “employees” in the state of Florida (as that term is defined in section 440.02(15)) of Respondent during the periods of non-compliance listed on the penalty worksheet. None of the individuals listed on the penalty worksheet attached to the 3rd Amended Order of Penalty Assessment had a valid Florida workers' compensation coverage exemption at any time during the periods of non-compliance listed on the penalty worksheet. Respondent did not secure the payment of workers' compensation insurance coverage, nor have others secured the payment of workers' compensation insurance coverage, for any of the individuals named on the penalty worksheet attached to the 3rd Amended Order of Penalty Assessment during the periods of non-compliance listed on the penalty worksheet. None of the individuals listed on the penalty worksheet of the 3rd Amended Order of Penalty Assessment were “independent contractors” (as that term is defined in section 440.02(15)(d)1.) hired by Respondent for any portion of the periods of non- compliance listed on the penalty worksheet. Wages or salaries were paid by Respondent to the individuals listed on the penalty worksheet, whether continuously or not, during the corresponding periods of noncompliance listed on the penalty worksheet. The gross payroll amounts (column “c” of the penalty worksheet of the 3rd Amended Order of Penalty Assessment) for the employees listed on the penalty worksheet are correct. Respondent was engaged in business operations in the state of Florida as an auto recycling store from November 16, 2010, through November 15, 2013. The store operated by Respondent is called A&A Auto Recycling and is located at 5507 9th Street East, Bradenton, Florida. The store consists of an enclosed retail area and an open yard area where vehicles are kept. John Austerman is the business owner and president. Respondent employed at least ten employees at any given time during the period from November 16, 2010, through November 15, 2013. Employees working in the retail area check inventory on the computer, perform customer service, and sell parts. Employees working in the retail area also “mark parts,” such as fenders, when customers bring them in for purchase from the area on Respondent’s property where vehicles are kept (the yard). Respondent does not dispute the assignment of classification code 3821 to the employees identified as such on the penalty worksheet of the 3rd Amended Order of Penalty Assessment. Respondent does dispute, however, that classification code 3821 should be assigned to John Austerman. John Austerman conducts physical inventories of approximately 100 vehicles a month that arrive at the store for recycling. Mr. Austerman’s inventories include opening the doors and popping the engine hoods of the vehicles. Mr. Austerman walks the auto salvage yard approximately once per week for ten to fifteen minutes so as to ensure that the property is being properly maintained. In addition to vehicle and property inspections, Mr. Austerman also performs customer service, accounting, and clerical work for the business. The National Council of Compensation Insurance (“NCCI”), is the rating bureau that establishes class codes for the workers' compensation industry in Florida. NCCI classification code 3821 provides as follows: Code 3821 contemplates dismantling or wrecking of used automobiles, motorcycles and trucks for the salvaging of parts. Auto dismantling may consist of the simple removal of saleable parts by means of hand tools and retaining the frames and bodies for future sale to outside scrap collectors. Some dismantlers will also break up stripped chassis and bodies with acetylene torches or shears to be sold in the form of iron or steel scrap. In addition to the dismantling work, salvaged parts may be reconditioned or repaired and sold over the counter. New parts may also be stocked. In the case of larger risks, a number of other functions may often be performed such as auto repairing, gas station operations, glass reconditioning, brake relining, cylinder re-boring, piston grinding, and battery or tire repair. * * * Special Conditions: Store employees who do not engage in other operations and have no yard exposure are classified to Code 8046. NCCI classification code 8046 provides as follows: Code 8046 applies to those employees of automobile recyclers who are engaged in store operations and have no yard exposure to the yard. Duties conducted by these store employees include but are not limited to greeting and assisting customers, checking inventory on computers, pulling smaller parts from an inside parts warehouse an [sic] taking payments. These store employees may appear to have clerical duties but are properly classified to Code 8046. Refer to Code 3821 for all other employees of automobile recyclers. NCCI classification code 8046 applies to auto salvage employees who only work in the retail area of the store and have no yard exposure. For auto salvage employees, like John Austerman, who engage in other salvage related operations and who have exposure to the yard, code 3821 is the proper classification for such employees. Respondent asserts that all employees assigned the classification code of 8046 on the 3rd Amended Order of Penalty Assessment should be classified as code 8810 because these employees have clerical duties. The credible evidence does not support such a finding.2/ As previously noted, NCCI classification code 8046 provides: “These store employees may appear to have clerical duties but are properly classified to Code 8046.” Petitioner correctly assigned Respondent’s employees appearing on the 3rd Amended Order of Penalty Assessment to classification code 8046. Petitioner assigned the proper classification codes to each of Respondent’s employees. Respondent, in its Proposed Recommended Order, makes no argument with respect to the approved manual rates and only argues that the 3rd Amended Order of Penalty Assessment be amended “to reflect that all employees on the penalty calculation worksheet not classified as ‘3821’ [be] properly classified as ‘8810.’” Given that there is no dispute regarding whether Petitioner applied the appropriate approved manual rates, it is determined that Petitioner assigned the appropriate approved manual rates to assess the workers' compensation insurance coverage premium amounts that Respondent would have paid during the penalty period had Respondent obtained workers' compensation insurance coverage.
Recommendation Based on the Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation, enter a final order assessing a penalty in the amount of $99,571.67 against Respondent, Austerman, Inc., for its failure to secure and maintain required workers’ compensation insurance for its employees. DONE AND ENTERED this 28th day of October, 2014, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN 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 October, 2014.
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 Whether Respondent, Gulf Coast Site Prep, Inc., failed to comply with the coverage requirements of the Workers’ Compensation Law, chapter 440, Florida Statutes, by not obtaining workers’ compensation insurance for its employees, and, if so, what penalty should be assessed against Respondent pursuant to section 440.107, Florida Statutes (2014).1/
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 and corporate officers. § 440.107, Fla. Stat. Respondent, Gulf Coast Site Prep., Inc., is a Florida for-profit corporation organized on March 3, 2008. Respondent’s registered business address is 952 TR Miller Road, Defuniak Springs, Florida. Ashley Adams is Respondent’s President and Registered Agent. On March 27, 2015, the Department’s investigator-in- training, Jill Scogland, and lead investigator, Sharon Kelson, conducted a random workers’ compensation compliance check at Lot 34 in the Driftwood Estates residential subdivision in Santa Rosa Beach, Florida. Ms. Scogland observed two men on site. David Wayne Gibson was operating a front-end loader spreading dirt on site. Colby Smith was shoveling dirt on site. While Ms. Scogland was inspecting the site, a third man, Ashley Adams, arrived driving a dump truck with a load of dirt. Mr. Adams identified himself as the owner of Gulf Coast, and stated that he had an exemption from the requirement for workers’ compensation insurance and that he thought Mr. Gibson did as well. Mr. Adams advised Ms. Scogland that he hired both Mr. Gibson and Mr. Smith to work at the site.2/ At hearing, Respondent challenged the evidence supporting a finding that Respondent hired Mr. Gibson.3/ Specifically, Respondent argues that Ms. Scogland’s testimony that Mr. Adams told her he hired Mr. Gibson is unreliable because Ms. Scogland did not include that information in her field notes. Respondent claims that Ms. Scogland’s status as investigator-in-training on the date of the inspection is indicative of her unreliability. To the contrary, Ms. Scogland’s testimony regarding both the persons and events on the date of the inspection was clear and unequivocal. While Ms. Scogland admitted her field notes were not as detailed on the date in question as they are for more recent inspections, she was confident that her investigation of the facts was thorough. The fact that Ms. Scogland did not write down what Mr. Adams said does not render her testimony unreliable. The undersigned finds Ms. Scogland’s testimony to be clear and convincing. Ms. Scogland reviewed the Department of State, Division of Corporations’ online information and identified Mr. Gibson as President and Registered Agent of David Wayne Gibson Tractor Service, Inc. According to Ms. Scogland, the online records indicated the corporation had been administratively dissolved in September 2013. Ms. Scogland next accessed the Department’s Coverage and Compliance Automated System (CCAS) and determined that Mr. Gibson had obtained a workers’ compensation coverage exemption for himself, but the exemption had expired on February 15, 2015. The information contained in CCAS is information on new policies, cancellations, etc., reported to the Department by insurance agencies as required by administrative rule. Next, Ms. Scogland accessed the Division of Corporations’ website, verified Gulf Coast as an active corporation, and identified Mr. Adams as the sole officer of Gulf Coast. Ms. Scogland then accessed CCAS and determined that, although Gulf Coast did not have workers’ compensation coverage, Mr. Adams had an active exemption effective from February 12, 2014 through February 12, 2016. Mr. Adams had a prior exemption that expired on April 14, 2013, but had no valid exemption in place between April 14, 2013 and February 12, 2014. After contacting her supervisor, Michelle Lloyd, Ms. Scogland served Mr. Adams, on behalf of Gulf Coast, with a site-specific Stop-Work Order for failure to ensure workers’ compensation coverage for its employees. Ms. Scogland also served Mr. Adams with a Request for Production of Business Records for Penalty Assessment Calculation. The request was for Gulf Coast’s payroll, account, and disbursement records, as well as records identifying its subcontractors, payments thereto, and workers’ compensation coverage thereof, from March 28, 2013 through March 27, 2015 (the penalty period).4/ Mr. Adams did not provide any records to the Department in response to the records request. The Department’s penalty auditor, Eunika Jackson, was assigned to calculate the penalty to be assessed against Gulf Coast for failure to secure workers’ compensation insurance during the penalty period. The penalty to be assessed against an employer for failure to secure workers’ compensation coverage is two times the amount the employer would have paid in workers’ compensation insurance premiums when applying approved manual rates to the employer’s payroll during the penalty period. § 440.107(7)(d), Fla. Stat. Ms. Jackson consulted the Scopes Manual, which is published by the National Council on Compensation Insurance (NCCI), and identified class code 6217--Excavation and Drivers-- as the appropriate construction class code for the work being performed at the worksite. Respondent contests the assignment of class code 6217 to Mr. Adams, who was driving a dump truck and delivering a load of dirt to the site. Respondent admits that Mr. Gibson’s operation of the front-end loader was properly classified as Excavation and Drivers. NCCI Scopes Manual provides the following with regard to classification code 6217: Includes burrowing, filling or backfilling. * * * Code 6217 is applied to specialist contractors engaged in general excavation including ditch digging, burrowing, filling or backfilling provided such operations are not otherwise classified in the manual. The operations involve the removal of earth, small boulders and rocks by power shovels, trench diggers or bulldozers and piling it at the jobsite for backfill. The material may also be removed by dump trucks for fill in some other area. Code 6217 includes excavation in connection with building foundations, swimming pools, landscape gardening and waterproofing operations. * * * This classification also is applied to specialist contractors engaged in grading land and landfilling, provided these operations are not otherwise classified in this manual. This classification includes ditch digging, burrowing, filling or backfilling, and operations such as scraping, cutting, piling or pushing the earth to rearrange the terrain. These operations utilize equipment such as bulldozers, motor graders and carryalls. [emphasis supplied]. Mr. Adams’ operation of the dump truck falls squarely within the definition of Excavation and Drivers. The material in the dump truck was fill for the site under excavation, a purpose which is directly addressed in the manual under code 6217. Under Respondent’s interpretation, fill removed from the site by a dump truck would be an excavation activity, but would no longer be excavation when the dump truck arrived at another site (or at another location on the same site) with the fill. That interpretation is illogical. No evidence was introduced to support a finding that typical operation of a dump truck in preconstruction was classified by a different code in the Scopes Manual. It is found that Ms. Jackson properly applied the Scopes Manual in assigning code 6217 to the work being performed by Mr. Adams on the site. Having no payroll records from Gulf Coast, Ms. Jackson had to impute the statewide average weekly wage as Respondent’s payroll for Mr. Adams and his subcontractor, Mr. Gibson. The average weekly wages were calculated based on the Workers’ Compensation and Employers Liability approved rate manual also published by NCCI and adopted by the Department by administrative rule. Ms. Jackson calculated a penalty of two times the workers’ compensation insurance premiums that would have applied to the purchase of insurance for Mr. Adams and Mr. Gibson during periods of non-compliance during the penalty. The period of non-compliance for Mr. Adams was April 15, 2013 to February 11, 2014, during which time his exemption had lapsed. The period of non-compliance for Mr. Gibson was February 16, 2015 to March 27, 2015, during which his exemption had expired. § 440.107(7)(e), Fla. Stat. Utilizing the penalty calculation worksheet adopted by Florida Administrative Code Rule 69L-6.027, Ms. Scogland calculated a penalty of $12,181.42. On May 20, 2015, the Department issued an Amended Order of Penalty Assessment against Gulf Coast in the amount of $12,181.42. The Department correctly calculated the penalty based on the statutory formulas and adopted rules governing workers’ compensation insurance.
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 upholding the Stop-Work Order and Amended Penalty Assessment against Respondent, Gulf Coast Site Prep., Inc., for its failure to secure and maintain required workers’ compensation insurance for its employees. DONE AND ENTERED this 14th day of January, 2016, 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 14th day of January, 2016.
