The Issue Whether the Petitioner was required to carry workers' compensation insurance coverage for its employees, and if so, the penalty that should be assessed. Whether the Petitioner violated the Stop Work Order entered May 18, 2005, and, if so, the penalty that should be assessed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department is the state agency charged with the responsibility of enforcing the requirement of Section 440.107, Florida Statutes, that employers in Florida secure workers' compensation insurance coverage for their employees. § 440.107(3), Fla. Stat. Tak-A-Way is a Florida corporation which engages in the business of performing small jobs such as removing trash and debris, digging up small driveways, and excavation. Tak-A-Way owns several dump trucks, and it maintains a permanent storage yard for materials and equipment. Tak-A-Way's payroll records for the period January 2003 through May 2005 establish that several persons were listed as "Help" and received regular checks from Tak-A-Way during this period. Donald Oppenheim is the owner and president of Tak-A-Way. He is exempted from workers' compensation coverage. On May 18, 2005, during a routine investigation, an investigator employed by the Department observed two men ripping up an asphalt driveway and loading the asphalt into a truck at a private residence in Pompano Beach, Florida. One man was operating a backhoe, and the other was operating a bobcat. The equipment and trucks being used at the site displayed the name “Tak-A-Way”, and the two men confirmed that they were employed by Tak-A-Way. The men were identified as Andy Oppenheim and Kevin McManus. The Department did not find any record of workers’ compensation insurance in its database for employees of Tak-A- Way, and Mr. Oppenheim confirmed during a conversation with the Department’s investigator that Tak-A-Way had no workers' compensation coverage for any of its employees. The Department's investigator issued a Stop Work Order against Tak-A-Way on May 18, 2005, because it did not have workers’ compensation coverage for its employees; the Stop Work Order was hand-delivered to Mr. Oppenheim on the date of issue. The Stop Work Order required that Tak-A-Way "cease all business operations in this state" and advised that a penalty of $1,000.00 per day would be imposed if Tak-A-Way were to conduct any business in violation of the Stop Work Order. Finally, the Stop Work Order included the following: "This Stop Work Order shall remain in effect until the Division issues an order releasing the Stop Work Order, or until the Division issues an order of conditional release from Stop Work Order pursuant to the employer entering into a payment agreement schedule for periodic payment of penalty." Penalty Assessment for Failure to Have Workers' Compensation Insurance Coverage At the same time that she delivered the Stop Work Order to Mr. Oppenheim, the Department's investigator delivered a Request for Production of Business Records for Penalty Assessment Calculation, in which Mr. Oppenheim was directed to produce business records for the period extending from November 3, 2003, through May 18, 2005.2 Mr. Oppenheim produced Tak-A-Way's business records as requested, and the Department's investigator used the payroll information in the records for calculating the penalty to be assessed for Tak-A-Way's failure to have workers' compensation insurance coverage for its employees. The Department uses the National Council of Compensation Insurance, Inc. ("NCCI") Scopes Manual, which includes risk classifications and definitions used to determine rates for workers' compensation insurance coverage. The payroll records provided by Mr. Oppenheim did not indicate the workers' compensation classification codes assigned to Tak-A-Way's employees, so, in accordance with the NCCI Basic Manual for Workers Compensation and Employers Liability Insurance ("Basic Manual"), the Department's investigator assigned all of Tak-A-Way's operations to what she determined to be the highest- rated classifications of its business operations. As shown in the worksheets attached to both the Amended Order of Penalty Assessment and the Second Amended Order of Penalty Assessment, the Department's investigator classified all of Tak-A-Way's employees under the classification "Excavation," Code 6217, for the period extending from November 3, 2003, through December 31, 2004, which had an approved manual rate of $13.79 per $100.00 in payroll for that period; she classified all of Tak-A-Way's employees under the classification "Concrete," Code 5213, for the period extending from January 1, 2005, through May 18, 2005, with an approved manual rate of $24.66 per $100.00 in payroll for that period; and she classified all of Tak-A-Way's employees under the classification "Erection Permanent Yard," Code 8227, for the period extending from January 1, 2005, through May 18, 2005, with an approved manual rate of $9.38 per $100.00 in payroll for that period. The worksheets showed the premium calculation for each classification to be $19,248.91, $10,130.08, and $365.82, respectively, for a total premium of $29,744.81. The penalty, calculated as 1.5 times the premium for each classification, was shown on the worksheets as $28,873.37, $15,195.12, and $548.73, respectively, for a total penalty for the failure to have workers' compensation insurance coverage of $44,617.22. The operations included in the NCCI Scopes Manual classification "Excavation & Drivers," Code 6217, describe most closely the business operations of Tak-A-Way during the period of time covered by the penalty assessment for the failure to have workers' compensation insurance coverage. There is nothing in the record to indicate that the nature of Tak-A-Way's operations changed on or about January 1, 2005, nor did the Department's investigator provide any explanation for the change in classification from "Excavation" to "Concrete" effective January 1, 2005.3 In the absence of any evidence to support the change in classification, the Department has failed to sustain the $44,617.22 penalty assessment for the failure of Tak-A-Way to carry workers' compensation insurance coverage from November 3, 2003, through May 18, 2005. Rather, the premium calculation for the period from January 1, 2005, through May 18, 2005, should be based on the classification of "Excavation," Code 6217, which carried the approved manual rate of $12.77 for that period, and not on the classification of "Concrete," Code 5213.4 Tak-A-Way maintained a permanent storage yard in which its material and equipment was stored during the times material to this proceeding. The Department's investigator correctly included a premium calculation for "Erection Permanent Yard," Code 8227, as part of the calculation of the penalty against Tak-A-Way for failure to carry workers' compensation insurance coverage for its employees. Tak-A-Way obtained workers' compensation insurance coverage from Florida Citrus, Business & Industry, effective June 1, 2005. Penalty Assessment for Violating Stop Work Order On May 24, 2005, the Department’s investigator observed a Tak-A-Way truck traveling in front of her on the street and concluded that Tak-A-Way was conducting business in violation of the Stop Work Order issued May 18, 2005. The Amended Order of Penalty Assessment against Tak-A- Way issued on June 1, 2005, included a penalty of $1,000.00 for Tak-A-Way's violation of the Stop Work Order from May 24, 2005, to May 25, 2005, for a total penalty of $45.617.22. Tak-A-Way conducted business operations after the Stop Work Order was issued. Mr. Oppenheim rented dump trucks owned by Tak-A-Way to Preston Contractors. Mr. Oppenheim, who was the only Tak-A-Way employee involved in the business operations at the time, would drive a truck to one of Preston Contractors' construction sites, towing his pickup truck. He would park the truck and leave the site, and employees of Preston Contractors would fill the truck with construction debris. Mr. Oppenheim would return to the construction site and drive the truck to the landfill and dump the load of debris. At times, there were several Tak-A-Way dump trucks at the Preston Contractors' construction site. According to invoices maintained by Preston Contractors, it paid Tak-A-Way for truck rental and dump fees from February 2005 to September 2005. On November 22, 2005, the Department issued a Second Amended Order of Penalty Assessment, increasing the penalty for Tak-A-Way's violation of the Stop Work Order to $73,000.00, covering the period extending from May 19, 2005, through September 21, 2005, for a total penalty of $117,617.22. Based on the evidence presented, Tak-A-Way was conducting business operations in violation of the Stop Work Order during the period for which the penalty was assessed and had not obtained either an order releasing the Stop Work Order or an Order of Conditional Release from Stop Work Order.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers' Compensation, enter a final order: Finding that Tak-A-Way, Inc., failed to have workers' compensation insurance coverage for its employees, in violation of Sections 440.10(1)(a) and 440.38(1), Florida Statutes; Finding that Tak-A-Way, Inc., engaged in business operations during the pendency of a Stop Work Order, in violation of Section 440.107(7)(a), Florida Statutes; Assessing a penalty against Tak-A-Way, Inc., equal to 1.5 times premium based on the approved manual rate for the classification "Excavation," Code 6217, for the period extending from November 3, 2003, through May 18, 2005, and on the approved manual rate for the classification "Construction & Erection - Permanent Yard," Code 8227, for the period extending from January 1, 2005, through May 18, 2005 as provided in Section 440.107(7)(a) and (d), Florida Statutes; and Assessing a penalty of $73,000.00, against Tak-A-Way, Inc., for engaging in business operations in violation of the May 18, 2005, Stop Work Order, as provided in Section 440.107(7)(a) and (c), Florida Statutes. DONE AND ENTERED this 8th day of March, 2006, in Tallahassee, Leon County, Florida. S PATRICIA M. HART Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 8th day of March, 2006.
The Issue The issues are whether Petitioner violated Chapter 440, Florida Statutes, and the Insurance Code by not securing workers’ compensation insurance or workers’ compensation exemptions, and if so, what penalty should be assessed.
Findings Of Fact Respondent is the state agency responsible for enforcing the requirement of workers’ compensation law that requires employers to secure payment of compensation for their employees. On June 26, 2006, Petitioner was operating in the construction industry installing drywall. At approximately 10:30 a.m., Respondent’s investigator, Vicki Chamelin, conducted a workers’ compensation compliance check at 5574 Hampton Hill Circle, Tallahassee, Florida. While at the site, Ms. Chamelin recorded the names of the workers who claimed to be or were claimed to be employed by Petitioner. The names of these individuals were Brandon Roberts, Kelvin Williams, Charles Carter, Willie Oliver, and Jerry Pompey. Next, Ms. Chamelin consulted Respondent’s Coverage and Compliance Automated System (CCAS). She then spoke with Christine Conley, branch manager of U.S. Labor, Inc./USA Staffing, the company that Petitioner contracted with to provide workers’ compensation coverage. Ms Chamelin concluded that Petitioner had not secured the payment of workers’ compensation for Brandon Roberts, Kelvin Williams, and Jerry Pompey. After consulting with her supervisor, Ms. Chamelin issued a Stop Work Order and Order of Penalty Assessment (hereinafter “Stop Work Order”). The Stop Work Order commanded Petitioner to cease business operations and assessed a $1000 penalty against Petitioner. In addition to the Stop Work Order, Ms. Chamelin served Petitioner with a Request for Business Records for Penalty Assessment Calculation (hereinafter “Request”). After serving Petitioner with the Stop Work Order and Request, Ms. Chamelin again verified with Christine Conley which employees were and were not covered by U.S. Labor, Inc./USA Staffing’s workers’ compensation insurance. U.S. Labor, Inc./USA Staffing is a staffing company whose employees must apply and be approved by USA Staffing prior to placement with client companies. Pursuant to the contract between USA Staffing and Petitioner, an employee is not covered by workers’ compensation insurance unless the employee applies to and is approved by USA Staffing prior to starting work. If an approved employee of USA Staffing does not work for USA Staffing for between two and four weeks, USA Staffing deactivates the employee from their payroll and notifies the client company. Inactivated employees are not covered by USA Staffing’s workers’ compensation insurance policy. Ms. Conley advised Ms. Chamelin that Kelvin Williams, Brandon Roberts, and Jerry Pompey were not being leased by Petitioner from USA Staffing on June 26, 2006. USA Staffing’s payment records reflected that no payroll was being run by USA Staffing for Brandon Roberts between the dates of April 6, 2006, and June 26, 2006. U.S. Staffing’s payment records reflected that no payroll was being run by USA Staffing for Kelvin Williams between the dates of March 2, 2006, and June 26, 2006. Jerry Pompey was never an employee of USA Staffing. In order to reactivate an employee, a client company must call USA Staffing and reactivate the employee prior to that employee commencing work with the client company. Ms. Chamelin called USA Staffing to investigate the coverage status of Jerry Pompey, Brandon Roberts, and Kelvin Williams before Petitioner called USA Staffing to reactivate the individuals. Petitioner did not provide Respondent with any of the documents identified in the Request. Because Petitioner failed to provide Respondent with the requested business records, Ms. Chamelin properly imputed Petitioner’s penalty. First, Ms. Chamelin imputed Petitioner’s payroll. Next, Ms. Chamelin divided the imputed payroll amount by 100, multiplied the quotient by the approved manual rate to arrive at the premium the Petitioner would have paid, then multiplied the product by 1.5. Petitioner entered into a Payment Agreement Schedule for Periodic Payment of Penalty by paying 10 percent of the total penalty with the balance due in equal monthly installments over 60 months. Petitioner was issued an Order of Conditional Release From Stop-Work Order after entering into the Payment Agreement Schedule for Periodic Payment of Penalty and demonstrating compliance with the coverage requirements of Chapter 440, Florida Statutes (2005). Respondent issued a Second Amended Order of Penalty Assessment to Petitioner. The Second Amended Order of Penalty Assessment adjusted Petitioner’s assessed penalty to $10,270.76.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Respondent enter a final order, affirming the Stop Work Order and Second Amended Order of Penalty Assessment that assessed a penalty of $10,270.76. DONE AND ENTERED this 8th day of March, 2007, in Tallahassee, Leon County, Florida. S SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 8th day of March, 2007. COPIES FURNISHED: Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Daniel Sumner, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307 Stanley Roberts Forever Ready Drywall 272 Robert Willis Road Cairo, Georgia 39827 Douglas D. Dolan, Esquire Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399
The Issue The issue in this case is whether the Stop-Work Order and Order of Penalty Assessment previously imposed against Yzaguirre Enterprises, Inc., was properly applied to Respondent as a successor-in-interest to Yzaguirre Enterprises, Inc.
Findings Of Fact Petitioner (also referred to herein as the "Department") 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 Department's headquarters are located in Tallahassee, Florida, but its investigators are spread throughout the state in order to more effectively monitor businesses. The Department is authorized to impose penalties against any businesses failing to maintain the proper insurance coverage for its employees. 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. Respondent is a sole proprietorship and is a duly- certified general contractor (License No. CGC1505393) in the State of Florida. Respondent was engaged in the work of carpentry on August 4, 2009. Carpentry has a construction industry classification code of 5654. Respondent's sole proprietorship is a successor-in- interest to a corporation known as Yzaguirre Enterprises, Inc. (YEI). Tammy Yzaguirre was the vice-president and a director of YEI. That corporation was administratively dissolved on September 25, 2009, for failure to file its annual report. YEI was primarily engaged in the business of carpentry. On October 13, 2008, the Department conducted an investigation of a job site in Immokalee, Florida, where YEI was engaged in work. During its investigation, the Department ascertained that several employees of YEI were not covered by a valid workers' compensation insurance policy, nor were those workers exempt from coverage. A Stop-Work Order was issued by the Department against YEI and posted on the work site. The Stop-Work Order, along with an Order of Penalty Assessment, was also given to Esequiel Yzaguirre (by hand- delivery) on November 12, 2008. Meanwhile, an Amended Order of Penalty Assessment was issued by the Department and sent to Respondent via certified mail. The Amended Order imposed a penalty in the amount of one hundred fifty-one thousand, seven hundred fifty-eight dollars and forty-six cents ($151,758.46). Neither the Stop-Work Order, nor the Amended Order of Penalty Assessment, was timely challenged by YEI. While Respondent did engage in some discussions and exchange of documents with the Department concerning the Amended Order of Penalty Assessment, she did not avail herself of the appeal rights stated in the Order. Respondent did not enter into a settlement agreement or payment plan with the Department, because she did not have any money to make payments. As of the date of the final hearing in this matter, the Stop-Work Order and Amended Order of Penalty Assessment had not been released. Instead of paying the amount set forth in the Amended Order of Penalty Assessment, Respondent formed a sole proprietorship in her name, obtained the necessary licenses and certifications to operate, and began to engage in the work of general construction again. Prior to commencing this work, Respondent obtained a workers' compensation insurance policy in an effort to satisfy all state requirements. Respondent did not intentionally attempt to break or circumvent any laws by the commencement of her new business. Respondent did not know that starting a new business in her name would be deemed improper by the Department. On August 4, 2009, the Department was engaged in a "sweep" in Immokalee, Florida. A sweep entails a large number of investigators working together in one place at one time for the purpose of determining whether employers in the area were complying with workers' compensation insurance requirements. During its sweep, a Department investigator noticed a YEI truck parked at a job site. The investigator took action to determine who was working out of the truck and obtained information about Respondent, i.e., that Respondent's new sole proprietorship may be engaged in on-going work at that site. Respondent argues that the truck was not being used by the new sole proprietorship. Rather, the truck had been loaned to some individuals who were working on their own or with other employers. Thus, claims Respondent, the Department should not be allowed to take any action against the sole proprietorship. There is no valid basis for Respondent's position. Upon further investigation, the Department ascertained that Respondent was operating under an entity that was deemed a successor-in-interest to YEI. That being the case, the Department issued its Order, which was served via hand-delivery to Respondent on August 5, 2009. At final hearing, Respondent attempted to object to the Department's findings relating to the initial Stop-Work Order from 2008. However, inasmuch as that Stop-Work Order was never formally challenged and became final by operation of law, the time for objections to it has passed. Thus, Respondent's testimony concerning whether or not all the workers listed in the Amended Order of Penalty Assessment were actually YEI's employees was not accepted.
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, affirming the Order Applying Stop-Work Order and Amended Order of Penalty Assessment to Successor Corporation or Business Entity. DONE AND ENTERED this 4th day of February, 2010, 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 4th day of February, 2010.
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 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 (Department), 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, Po’ Boys, Inc. (Po’ Boys), is a Florida corporation engaged in business operations as a restaurant in the State of Florida from January 31, 2010, through January 30, 2013. Respondent employed more than four non-exempt employees during the periods January 31 through February 24, 2010; June 8 through September 3, 2010; and July 11, 2012, through January 30, 2013. Respondent was an "employer" as defined in chapter 440, Florida Statutes, throughout the penalty period. All of the individuals listed on the Penalty Worksheet of the 2nd Amended Order of Penalty Assessment were "employees" (as that term is defined in section 440.02(l5)(a), Florida Statutes) of Respondent during the periods of noncompliance listed on the penalty worksheets. None of the employees listed on the Penalty Worksheet can be classified as independent contractors, as defined in section 440.02, Florida Statutes. Mr. Jonas Hall is a workers’ compensation compliance officer who has worked for Petitioner for about four years. He has been involved with between 200 and 300 cases. On the morning of January 30, 2013, Mr. Hall received a “referral” report that Po’ Boys was not securing the payment of workers’ compensation for its employees. Po’ Boys operates three “traditional” restaurants in Tallahassee, which provide wait-service to their customers. Mr. Hall checked the Florida Department of State’s “Sunbiz” website, which gave him information on Po’ Boys’ legal structure, corporate officers, and principal location. He also checked workers’ compensation information for Po’ Boys, Inc., by accessing the Coverage and Compliance Automated System (CCAS) maintained by the Department. It indicated that Po’ Boys’ last coverage, which had become effective on February 6, 2012, had ended on July 11, 2012. He determined that active workers’ compensation exemptions were on file for four individuals, including Mr. Carmen Calabrese and Mr. Jon Sweede, co-owners of Po’ Boys. Information in the CCAS is submitted by insurance companies and the National Council on Compensation Insurance (NCCI). Mr. Hall drove to the College Avenue location of Po’ Boys to conduct a site visit, but it did not appear open because there were no vehicles present and the lights were off. Mr. Hall proceeded to the West Pensacola Street location. There were vehicles present and he saw an individual who appeared to be arranging chairs on the patio. Mr. Hall introduced himself and explained what he was doing there, and was then referred to Mr. Carmen Calabrese, the manager. It was about 10:00 a.m. Payroll records indicate that employees reported for work between 10:00 and 11:00 and that the restaurant was open to serve lunch and dinner. Mr. Calabrese took Mr. Hall to a “Broken Arm” poster which had a workers’ compensation sticker on the bottom. The sticker contained a workers’ compensation policy number and periods of coverage, as well as contact information for Zenith Insurance Company. Mr. Hall contacted Zenith Insurance Company, and they confirmed that coverage had not been in effect since July 11, 2012. In response to Mr. Hall’s questions, Mr. Calabrese indicated that Po’ Boys had between 50 and 60 employees working at its three locations. Mr. Calabrese told Mr. Hall that he had no knowledge that coverage was not in effect and that Mr. Hall would have to talk to Mr. Sweede, who handled the workers’ compensation for the business. Mr. Calabrese was a credible witness. Mr. Hall called Mr. Sweede, who in turn told Mr. Hall to contact Mr. Wade Shapiro, his insurance agent for providing workers’ compensation coverage. Mr. Sweede then called Mr. Shapiro as soon as he completed his telephone call with Mr. Hall. When Mr. Hall later telephoned Mr. Shapiro, Mr. Shapiro confirmed that Po’ Boys had no policy in effect, but said that he was in the process of obtaining coverage for them. Mr. Hall contacted his supervisor, Ms. Michelle Newcomer, who provided him with a Stop-Work Order Number. Mr. Hall served the Stop-Work Order and Order of Penalty Assessment on Mr. Calabrese, along with a Request for Production of Business Records for Penalty Assessment Calculation, at about 11:15 a.m. Although some records indicated that the Stop-Work Order was served at 10:30, other records and the testimony of the witnesses that it was served at 11:15 were more credible. Mr. Sweede testified that he was unaware until January 30, 2013, that his workers’ compensation coverage was not in effect. He testified that the Electronic Funds Transfer payment “came back” in July, but that he had been unaware of this. He testified, “I must not have found the paperwork, must not have looked at the envelopes, take all the heat for that in this business.” Mr. Sweede testified that he later learned Mr. Shapiro was not only aware that Po’ Boys’ coverage was not in effect, but that he had already been working to get Po’ Boys new coverage before Mr. Sweede telephoned him on January 30, 2013, all without the knowledge or authorization of Mr. Sweede. Mr. Sweede entered into an agreement to obtain workers’ compensation coverage for Po’ Boys sometime on January 30, 2013. Several documents were required, at least one with a notary’s signature. Mr. Sweede signed a letter stating that there had been no workers’ compensation claims since his previous coverage had been canceled on July 11, 2012, joined the Florida United Businesses Association (FUBA), filled out an application for coverage, and made a down payment from the Po’ Boys bank account to the (FUBA sponsored) Florida Citrus, Business, and Industries Fund. Under the terms of the agreement, coverage was made effective retroactively to 12:01 a.m. on January 30, 2013. Mr. Sweede testified that Mr. Shapiro notified him, although he could not remember exactly how, that workers’ compensation coverage was obtained for Po’ Boys at around 11:00 a.m. on January 30, 2013, about 15 minutes before the Stop-Work Order was served. Mr. Sweede’s testimony as to how he came to be satisfied that his coverage at Zenith was actually not in effect, determined how and why it had been canceled, decided to obtain insurance elsewhere, and arranged for people in at least three different locations to prepare and execute all of the required documents in approximately 45 minutes, from about 10:15 a.m. until 11:00 a.m., was unclear. The transcript reflects the following exchange: Q: Okay. So this is another –- this is something else. Obviously when Wade Shapiro came by you brought this check, right, and then he also had you sign these documents? A: I really couldn’t tell you. I couldn’t tell you which way, you know, I mean, obviously, you know, like I said, I was stressed. I got him the check. Whether he ran the check up, brought this stuff back, I probably couldn’t –- I can’t remember which chronology it was. It was, you know, a pretty stressful morning. But I know it was all fast, fortunately. Although it does not contain a jurat or notarial certificate,1/ the application for insurance does contain the signature and stamp of a notary public beneath the signatures of Mr. Sweede and Mr. Shapiro. All signatures on the document are followed by a handwritten notation of “1-30-13” in the space provided for a date. The signature and seal provide credible evidence that the document was signed sometime on January 30, 2013. Regardless of the time when coverage became effective, there is clear and convincing evidence in this case that Petitioner had no information reasonably available to it indicating that Respondent had obtained workers’ compensation coverage in the last minutes before the Stop-Work Order was issued. Respondent concedes it did not have coverage at the time of Mr. Hall’s site inspection, and does not claim that when coverage was obtained, it notified Petitioner, or even attempted to do so. Mr. Hall wrote a “Narrative” in a Department database on the afternoon of January 30, 2013, describing the events of the morning. Although Respondent demonstrated that the description was “modified” several days later on on February 5, 2013, the Department put on no evidence to explain what was modified, or why. The testimony of witnesses that Mr. Hall served the Stop-Work Order at 11:15 a.m. was deemed more credible under all of the circumstances than the notation in the Narrative that it was served at 10:30 a.m. Respondent executed a Payment Agreement Schedule for Periodic Payment of Penalty and was issued an Order of Conditional Release from the Stop-Work Order on February 6, 2013. Po’ Boys failed to secure the payment of workers’ compensation for its employees from January 31 through February 24, 2010; June 8 through September 3, 2010; and July 11, 2012, through January 29, 2013. It obtained coverage sometime on January 30, 2013. Respondent would have paid an amount less than $11,565.68 in premiums for those periods during which it failed to secure the payment of workers’ compensation, because that figure should be reduced by the premium paid for coverage on January 30, 2013. Payroll records submitted by Po’ Boys indicate several employees were paid for varying hours after 11:15 a.m. on January 30, 2013. The parties stipulated that the Department has assigned the appropriate class code and manual rates to Respondent's employees from the NCCI SCOPES Manual.
Recommendation Upon consideration of the above 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, Po’ Boys, Inc., violated the requirement in chapter 440, Florida Statutes, that it secure workers' compensation coverage for its employees, and imposing upon it a total penalty assessment of $17,349.70, reduced by the amount attributable to lack of coverage on January 30, 2013. DONE AND ENTERED this 23rd day of May, 2013, in Tallahassee, Leon County, Florida. S F. SCOTT BOYD 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 23rd day of May, 2013.
The Issue Whether the Respondent, Steve Mundine Construction, Inc., timely challenged the Second Amended Order of Penalty Assessment and, if not, whether pursuant to the doctrine of equitable tolling Respondent’s untimely filed challenge should be accepted.
Findings Of Fact The Petitioner is the state agency charged with the responsibility of enforcing and assuring employers meet the requirements of chapter 440, Florida Statutes. The law in Florida requires employers to maintain appropriate workers’ compensation coverage for their employees. At all times material to this case, the Respondent was doing business in Florida and was subject to the requirements of the law. On May 6, 2015, Stephanie Scarton, an investigator employed by the Petitioner, stopped at one of the Respondent’s construction sites and initiated an investigation as to whether the Respondent maintained appropriate workers’ compensation for the two employees found at the job site. After determining that the requisite documentation for workers’ compensation coverage was not produced, Ms. Scarton issued a Stop-Work Order (Petitioner’s Exhibit A). The Stop- Work Order advised the Respondent that he, Steven Mundine, d/b/a, Steve Mundine Construction, Inc., was in violation of Florida law by “failing to obtain coverage that meets the requirements of chapter 440, F.S., and the Insurance Code.” Petitioner’s Exhibit A included a Notice of Rights that provided, in part: You have a right to administrative review of this action by the Department under sections 120.569 and 120.57, Florida Statutes. * * * FAILURE TO FILE A PETITION WITHIN THETWENTY-ONE (21) DAYS CONSTITUTES A WAIVER OF YOUR RIGHT TO ADMINISTRATIVE REVIEW OF THEAGENCY ACTION. [Emphasis in original] In response to the Stop-Work Order, the Respondent met with Cathy Nunez on May 7, 2016, and executed an Agreed Order of Conditional Release from Stop-Work Order (Petitioner’s Exhibit B). In addition to signing the agreed order, the Respondent submitted an affidavit that provided: I Steve Mundine have terminated Bill Busch and Karl G. Kerr. I am no longer conducting business as Steve Mundine Const. Inc. I have opened a new company Paradigm Building, LLC but will not work til we applied and received exemptions. Including Richard Hans. Under the terms of the Agreed Order of Conditional Release from Stop-Work Order the Respondent represented that he would remit periodic payments of the remaining penalty amount pursuant to a Payment Agreement Schedule for Periodic Payment of Penalty with the Department or pay the remaining penalty amount in full within 28 days after the service of the Stop-Work Order. As a condition of receiving the conditional release the Respondent remitted $1,000.00 toward the penalty amount. In order to assist the Petitioner with the accurate calculation of the penalty that would be due, the Respondent was advised that he needed to submit records. When the Respondent asked Cathy Nunez if he needed to retain a lawyer, she did not tell him that he did not need a lawyer. She advised him that a lawyer was not required to produce the records that were needed to make the penalty calculation. The Respondent did produce records to the Petitioner and in turn an Amended Order of Penalty Assessment (Petitioner’s Exhibit C) was completed that advised the Respondent that he owed a total penalty of $63,837.82. Cathy Nunez hand-delivered the Amended Order of Penalty Assessment to the Respondent on July 24, 2015. Included was a second Notice of Rights that advised the Respondent of his right to challenge the assessment. Additionally, the Respondent was advised that a petition to seek administrative review of the action had to be filed within twenty-one days. After considering additional records submitted by the Respondent, the Petitioner prepared a Second Amended Order of Penalty Assessment (Petitioner’s Exhibit D) to itemize the revised amount owed by the Respondent. The Second Amended Order of Penalty Assessment ordered the Respondent to pay a total penalty of $47,006.28. Stephanie Scarton delivered the Second Amended Order of Penalty Assessment to the Respondent on December 22, 2015. At the same time (December 22, 2015), Ms. Scarton presented the Respondent with a Payment Agreement Schedule for Periodic Payment of Penalty (Petitioner’s Exhibit E). The payment agreement acknowledged that the Respondent had previously remitted $1,000.00 toward his penalty and allowed for the remaining $46,006.28 to be repaid over the course of 60 monthly payments. The Respondent did not agree to sign the payment agreement. Accordingly, a blank agreement was left with the Respondent, not the one providing for the payments previously described. On December 22, 2015, the Respondent disagreed with the repayment amount and believed the penalty had been incorrectly calculated. On December 22, 2015, the Respondent knew he had a limited amount of time to challenge the Second Amended Order of Penalty Assessment. On December 22, 2015, Ms. Scarton hand-delivered to the Respondent the Second Amended Order of Penalty Assessment including a Notice of Rights. The only documents not left with the Respondent on December 22, 2015, were copies of the payment agreement signed by Ms. Scarton. On December 22, 2015, the Notice of Rights provided to the Respondent was identical to the Notice of Rights previously provided to him. Before leaving the Respondent on December 22, 2015, Ms. Scarton reminded the Respondent he had a limited amount of time to file a petition seeking administrative review of the agency action. The Petitioner did not misrepresent the procedural requirements to challenge the agency action, did not lull the Respondent into a false sense of security or inaction, and did not advise the Respondent as to whether he should retain a lawyer in connection with an administrative review of the penalty assessment. The weight of the credible evidence supports the finding that when the Respondent eventually filed a petition to challenge the agency action, it was beyond the 21 days allowed by law.
Recommendation Based upon 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 the Respondent’s request for administrative review of the Second Amended Order of Penalty Assessment was not timely filed. DONE AND ENTERED this 27th day of May, 2016, in Tallahassee, Leon County, Florida. S J. D. PARRISH 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 27th day of May, 2016. COPIES FURNISHED: Christopher Ivey Miller, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399 (eServed) John Laurance Reid, Esquire Dickens Reid PLLC 517 East College Avenue Tallahassee, Florida 32301 (eServed) Young J. Kwon, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399 (eServed) Michael Joseph Gordon, Esquire Florida Department of Financial Services Workers Compensation Compliance 200 East Gaines Street Tallahassee, Florida 32399 (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 in this case is whether Respondent had a sufficient amount of workers’ compensation coverage during the time period in question; and, if not, what penalty should be imposed.
Findings Of Fact The Division is the state agency responsible for enforcing the requirement in chapter 440, Florida Statutes (2015),1/ that employers in Florida secure workers’ compensation coverage for their employees. While an exemption can be obtained for up to three corporate officers, any employer in the construction industry with at least one employee must have workers’ compensation coverage. § 440.02(15), Fla. Stat. Kent Howe works for the Division as a compliance investigator based in Orlando, Florida. As part of his job responsibilities, Mr. Howe visits construction sites in order to verify that employers in the construction industry have obtained workers’ compensation coverage for their employees. Mr. Kehr was the owner and sole corporate officer of JNK. Mr. Howe visited a construction site in Port Orange, Florida, on the morning of December 10, 2015, and saw Mr. Kehr and two other men building the interior walls/frames of a house. Mr. Howe talked to the two men (James Hicks and James Garthwait) working with Mr. Kehr, and they reported that Mr. Kehr was paying them approximately $8.00 an hour. Mr. Kehr told Mr. Howe that Messrs. Hicks and Garthwait had been working for him for approximately two hours that morning. Mr. Kehr also stated that he had not obtained workers’ compensation coverage for Messrs. Hicks and Garthwait. Following those conversations, Mr. Howe returned to his car and accessed the Division’s Coverage and Compliance Automated System (“CCAS”) and learned that JNK had no workers’ compensation coverage. Mr. Howe also determined from CCAS that Mr. Kehr had obtained an exemption from workers’ compensation coverage that had been in effect from November 18, 2014, through November of 2016.2/ After relaying that information to his supervisor, Mr. Howe received authorization to serve Mr. Kehr with a Stop- Work Order, and he did so on December 10, 2015. That Stop-Work Order required JNK to “cease all business operations for all worksites in the State” based on the Division’s determination that JNK had failed to obtain workers’ compensation coverage. In addition, the Stop-Work Order stated that JNK would be penalized an amount “[e]qual to 2 times the amount [JNK] would have paid in premium when applying approved manual rates to the employer’s payroll during periods for which it [had] failed to secure the payment of compensation within the preceding 2-year period.” Along with the Stop-Work Order, Mr. Howe also served a “Request for Production of Business Records for Penalty Assessment Calculation” (“the BRR”) on Mr. Kehr. In order to ascertain JNK’s payroll disbursements during the relevant time period and the resulting penalty for JNK’s failure to obtain workers’ compensation coverage, the BRR requested that JNK remit several different types of business records covering the period from November 10, 2014, through December 10, 2015. Mr. Howe explained during the final hearing that the Division usually reviews business records pertaining to the two years preceding the Stop Work Order.3/ Because JNK came into existence on November 10, 2014, the Division’s review was limited to examining the period between November 10, 2014, and December 10, 2015. The business records sought by the Division included items such as time sheets, payroll summaries, check journals, certificates of exemption, and evidence that any JNK subcontractors had obtained workers’ compensation coverage. Section 440.107(7)(e) provides that if an employer fails to provide business records sufficient to enable the Department to ascertain the employer’s actual payroll for the time period in question, then the Division will estimate the employer’s actual payroll for that time period by imputing the employer’s payroll based on the statewide average weekly wage. The Division then multiplies that amount by two. JNK did not provide business records typically sought by the Division. Instead, JNK responded to the BRR by producing a written statement from Mr. Kehr indicating that he founded JNK in November of 2014, but did no work until July of 2015. That initial job involved fixing a set of stairs for $200. Afterwards, Mr. Kehr performed three separate small jobs between July and November of 2015, earning approximately $550. Because the Division could not ascertain JNK’s actual payroll from the documentation provided by JNK, the Division imputed JNK’s payroll for the time period in question and issued an Amended Order of Penalty Assessment on January 19, 2016, seeking to impose a penalty of $61,424.04. Phillip Sley calculated the aforementioned penalty amount by filling out a worksheet that has been adopted by the Division through Florida Administrative Code Rule 69L-6.027. The first step in completing the worksheet required Mr. Sley to assign a classification code to the type of work that Mr. Howe witnessed Messrs. Kehr, Hicks and Garthwait performing at the Port Orange worksite on December 10, 2015. Classification codes come from the Scopes® Manual, which has been adopted by the Department through rule 69L-6.021. Each code within the Scopes® Manual pertains to an occupation or type of work, and each code has an approved manual rate used by insurance companies to assist in the calculation of workers’ compensation insurance premiums. The imputed weekly payroll for each employee and corporate officer “shall be assigned to the highest rated workers’ compensation classification code for an employee based upon records or the investigator’s physical observation of that employee’s activities.” See Fla. Admin. Code. R. 69L-6.028(3)(d). In the instant case, Mr. Sley determined “5645” was the appropriate classification code. According to the Scopes Manual, [w]hen all of the carpentry work in connection with the construction of residential dwellings not exceeding three stories in height is performed by employees of the same carpentry contractor or general contractor responsible for the entire dwelling construction project, the work is assigned to Code 5645. This includes the construction of the sill, rough framework, rough floor, wood or light-gauge steel studs, wood or lighted-gauge steel joists, rafters, roof deck, all types of roofing materials, sidewall sheathing, siding, doors, wallboard installation, lathing, windows, stairs, finished flooring, cabinet installation, fencing, detached structures, and all interior wood trim. Mr. Sley’s next step in calculating the penalty amount was to determine the period of non-compliance. With regard to Mr. Kehr, the Department asserted that JNK failed to have workers’ compensation coverage between the date of JNK’s inception (November 10, 2014) and the date that Mr. Kehr received an exemption from the workers’ compensation coverage requirement (November 18, 2014). Despite having no evidence that Messrs. Hicks and Garthwait worked for JNK on any day other than December 10, 2015, the Division’s penalty calculation was based on an assumption that Messrs. Hicks and Garthwait worked for JNK from November 10, 2014, through December 10, 2015. Mr. Sley’s next step was to calculate JNK’s gross payroll for the time period in question. Because JNK did not provide the Division with business records that would have enabled the Division to calculate JNK’s actual payroll, Mr. Sley based JNK’s payroll on the statewide average weekly wage determined by the Department of Economic Opportunity for the time period in question.4/ Mr. Sley then multiplied that amount by two.5/ After converting the payroll numbers into a percentage, Mr. Sley multiplied the payroll amounts by the approved manual rate. As noted above, every classification code is associated with a particular manual rate determined by the Office of Insurance Regulation, and a manual rate corresponds to the risk associated with a particular occupation or type of work. Manual rates associated with potentially dangerous activities will have higher manual rates than activities with little or no potential danger. Mr. Sley’s next step was to calculate a premium for obtaining workers compensation coverage for Messrs. Kehr, Hicks, and Garthwait. Mr. Sley then multiplied that premium by two in order to calculate the individual penalties resulting from JNK not having workers’ compensation coverage for Messrs. Kehr, Hicks, and Garthwait. The sum of those amounts was $61,424.04. The evidence produced at the final hearing established that Mr. Sley utilized the correct class code, average weekly wage, and manual rates in his calculation of the penalty set forth in the Amended Order of Penalty Assessment. The Division has demonstrated by clear and convincing evidence that JNK was in violation of the workers’ compensation coverage requirements of chapter 440. In particular, the Division proved by clear and convincing evidence that Mr. Kehr had no workers’ compensation coverage for himself and no exemption from November 10, 2014, through November 17, 2014. However, the Division did not demonstrate by clear and convincing evidence that Messrs. Hicks and Garthwait were employees of JNK on any day other than December 10, 2015. Mr. Kehr testified during the final hearing that Messrs. Hicks and Garthwait were working for him on December 10, 2015. He also testified that he was paying them at a rate of $8.00 an hour. However, Mr. Kehr persuasively testified that Messrs. Hicks and Garthwait had not worked for him at any other time between November 10, 2014, and December 10, 2015. The undersigned finds Mr. Kehr’s testimony on this point to be credible. Messrs. Hicks and Garthwait did not testify during the final hearing in this matter. There is no evidence that Messrs. Hicks and Garthwait worked for JNK at any time other than December 10, 2015. Because there is no evidence indicating that Messrs. Hicks and Garthwait were employees of JNK at any time other than December 10, 2015, during the time period in question, the undersigned finds that the Department failed to carry its burden of proving that $61,424.04 is the appropriate penalty. Based on the above findings, the undersigned finds that the correct penalty resulting from Mr. Kehr’s lack of coverage is $627.48. The worksheet completed by Mr. Sley indicates that is the amount of the $61,424.04 penalty associated with Mr. Kehr’s lack of coverage. As for the penalties associated with the lack of coverage for Messrs. Hicks and Garthwait on December 10, 2015, the undersigned multiplied the average weekly wage utilized by the Division ($841.57) by two. That results in a weekly gross payroll amount of $1,683.14. Dividing $1,683.14 by five results in a daily gross payroll amount of $336.63. Dividing $336.63 by 100 and then multiplying the result by 15.91 (the approved manual rate utilized by the Division for the period from January 1, 2015, through December 10, 2015) yields a daily premium of $53.62. Multiplying $53.62 by two results in a penalty of $107.23. Multiplying $107.23 by two yields $214.46, JNK’s penalty for not having workers’ compensation coverage for Messrs. Hicks and Garthwait on December 10, 2015. JNK’s total penalty is $841.94. Because section 440.107(7)(d)1. mandates a minimum penalty of $1,000, the undersigned finds that $1,000 is the correct penalty for the instant case.
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 imposing impose a $1,000 penalty on Donald Kehr, d/b/a JNK Framing Inc., a Dissolved Florida Corporation. DONE AND ENTERED this 10th day of August, 2016, in Tallahassee, Leon County, Florida. S G. W. CHISENHALL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of August, 2016.
Findings Of Fact 12. The factual allegations contained in the Stop-Work Order and Order of Penalty Assessment issued on October 31, 2008, the Amended Order of Penalty Assessment issued on November 26, 2008, the Second Amended Order of Penalty Assessment issued on May 4, 2009, and the Third Amended Order of Penalty Assessment issued on August 5, 2009, which are fully incorporated herein by reference, are hereby adopted as the Department’s Findings of Fact in this case.
Conclusions THIS PROCEEDING came on for final agency action and Alex Sink, Chief Financial Officer of the State of Florida, or her designee, having considered the record in this case, including the Stop- Work Order and Order of Penalty Assessment and the Third Amended Order of Penalty Assessment served in Division of Workers’ Compensation Case No. 08-327-D2, and being otherwise fully advised in the premises, hereby finds that: 1. On October 31, 2008, the Department of Financial Services, Division of Workers’ Compensation (hereinafter “Department”) issued a Stop-Work Order and Order of Penalty Assessment in Division of Workers’ Compensation Case No. 08-327-D2 to CONNIE ARGUELLO, D.D.S. P.A. The Stop-Work Order and Order of Penalty Assessment included a Notice of Rights wherein CONNIE ARGUELLO, D.D.S. P.A. was advised that any request for an administrative proceeding to challenge or contest the Stop-Work Order and Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Stop-Work Order and Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes. 2. On November 3, 2008, the Stop-Work Order and Order of Penalty Assessment was served by personal service on CONNIE ARGUELLO, D.D.S. P.A. A copy of the Stop-Work Order and Order of Penalty Assessment is attached hereto as “Exhibit A” and incorporated herein by reference. 3. On November 26, 2008, the Department issued an Amended Order of Penalty Assessment in Case No. 08-327-D2 to CONNIE ARGUELLO, D.D.S. P.A. The Amended Order of Penalty Assessment assessed a total penalty of $4,318.14 against CONNIE ARGUELLO, D.D.S. P.A. The Amended Order of Penalty Assessment included a Notice of Rights wherein CONNIE ARGUELLO, D.D.S. P.A. was advised that any request for an administrative proceeding to challenge or contest the Amended Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Amended Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes. 4. On December 2, 2008, the Amended Order of Penalty Assessment was served by personal service to CONNIE ARGUELLO, D.D.S. P.A. A copy of the Amended Order of Penalty Assessment is attached hereto as “Exhibit B” and incorporated herein by reference. 5. On December 24, 2008, the Department received a letter from CONNIE ARGUELLO, D.D.S. P.A. requesting an administrative-hearing. The Department subsequently issued a Final Order Denying Petition as Untimely on January 30, 2009. 6. After the Final Order Denying Petition as Untimely was entered, CONNIE ARGUELLO, D.D.S. P.A. demonstrated that a timely petition for administrative review had previously been filed with the Department, and an Order Withdrawing Final Order Denying Petition as Untimely was entered on March 26, 2009. The petition for administrative review was then forwarded to the Division of Administrative Hearings on April 23, 2009, and the matter was assigned DOAH Case No. 09-2189. 7. On May 4, 2009, the Department issued a Second Amended Order of Penalty Assessment in Case No. 08-327-D2 to CONNIE ARGUELLO, D.D.S. P.A. The Second Amended Order of Penalty Assessment assessed a total penalty of $4,116.63 against CONNIE ARGUELLO, D.D.S. P.A. The Second Amended Order of Penalty Assessment was served on CONNIE ARGUELLO, D.D.S. P.A. through the Division of Administrative Hearings. A copy of the Second Amended Order of Penalty Assessment is attached hereto as “Exhibit C” and is incorporated herein by reference. 8. On August 5, 2009, the Department issued a Third Amended Order of Penalty Assessment in Case No. 08-327-D2 to CONNIE ARGUELLO, D.D.S. P.A. The Third Amended Order of Penalty Assessment assessed a total penalty of $3,744.47 against CONNIE ARGUELLO, D.D.S. P.A. The Third Amended Order of Penalty Assessment was served on CONNIE ARGUELLO, D.D.S. P.A. through the Division of Administrative Hearings. A copy of the Third Amended Order of Penalty Assessment is attached hereto as “Exhibit D” and is incorporated herein by reference. 9. On August 14, 2009, CONNIE ARGUELLO, D.D.S. P.A. signed a Payment Agreement Schedule for Periodic Payment of Penalty in Case No. 08-327-D2. A copy of the Payment Agreement Schedule for Periodic Payment of Penalty is attached hereto as “Exhibit E” and incorporated herein by reference. 10. On August 14, 2009, the Department issued an Order of Conditional Release from Stop-Work Order in Case No. 08-327-D2 to CONNIE ARGUELLO, D.D.S. P.A. A copy of the Order of Conditional Release from Stop-Work Order is attached hereto as “Exhibit F.” 11. On November 4, 2009, a Joint Stipulation for Dismissal was filed in DOAH Case No. 09-2189. Subsequently, on November 9, 2009, the Administrative Law Judge issued an Order Closing File which relinquished jurisdiction to the Department for final agency action. A copy of the Order Closing File is attached hereto as “Exhibit G” and incorporated herein by reference.
The Issue Whether Petitioner, Department of Financial Services, Division of Workers’ Compensation (“Petitioner” or “Department”) properly issued a Stop-Work Order and Penalty Assessment against Respondent, Barber Custom Builders, Inc. (“Respondent” or “Barber”) for failing to obtain workers' compensation insurance that meets the requirements of chapter 440, Florida Statutes.
Findings Of Fact On January 31, 2014, the parties filed a Joint Pre- hearing Stipulation, by which the parties stipulated to the facts set forth in the following paragraphs 2 through 12. Those facts are accepted and adopted by the undersigned. 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 construction industry in the State of Florida from June 6, 2010 through June 5, 2013. Respondent received a Stop-Work Order and Order of Penalty Assessment from the Department on June 5, 2013. The Department had a legal basis to issue and serve Stop-Work Order 13-273-1A on Respondent. Respondent contests the validity of the Department’s Stop-Work Order as a charging document. Respondent received a Request for Production of Business Records for Penalty Assessment Calculation from the Department on June 5, 2013. Respondent received an Amended Order of Penalty Assessment from the Department on June 17, 2013. Respondent executed a Payment Agreement Schedule for Periodic Payment of Penalty and was issued an Order of Conditional Release from Stop-Work Order on August 6, 2013. Respondent received a 2nd Amended Order of Penalty Assessment from the Department on September 25, 2013. Respondent employed more than four non-exempt employees during the periods of June 10, 2010 through June 30, 2010; July 2, 2010 through December 31, 2010; January 14, 2011 through December 29, 2011; January 30, 2012 through December 16, 2012; and January 4, 201[3] through June 5, 2013. Respondent was an “employer” as defined in chapter 440. All of the individuals listed on the Penalty Worksheet of the [2nd Amended Order of Penalty Assessment], except Buffie Barber and Linda Barber, were “employees” in the State of Florida (as that term is defined in section 440.02(15)(a), Florida Statutes), of Respondent during the periods of non- compliance listed on the penalty worksheets. In addition to the foregoing, in their March 12, 2014, Joint Stipulations and Status Report, the parties stipulated to the facts set forth in the following paragraphs 14 and 15. Those facts are accepted and adopted by the undersigned. Based on business records received from Respondent, the Department has recalculated the assessed penalty. The penalty has been reduced from $36,387.03 to $2,272.31. The 3rd Amended Order of Penalty Assessment is calculated correctly, if the manual rates were properly adopted by rule. A review of the stipulated 3rd Amended Order of Penalty Assessment reveals assessed penalties for employees engaged in work described as class code 5403 (carpentry - NOC) and class code 8810 (clerical office employees - NOC). Given the stipulations of the parties, further findings are unnecessary.
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 of $2,272.31 against Respondent, Barber Custom Builders, Inc., for its failure to secure and maintain required workers’ compensation insurance for its employees. DONE AND ENTERED this 30th day of April, 2014, 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 30th day of April, 2014.
