The Issue The issue in this case is whether Respondent, a package delivery company, unlawfully discriminated against an employee on the basis of his disability in violation of the Florida Civil Rights Act, after Petitioner, a package-car driver for Respondent, became an insulin-dependent diabetic and could not be medically certified as physically qualified to drive a federally-regulated commercial vehicle.
Findings Of Fact At all times relevant to this case, Petitioner Craig Jackson ("Jackson") worked for UPS, which was his employer, still, as of the final hearing. During his 24 years of service to the company, Jackson has held several different positions at UPS, including——from 1994 to 2009——full-time package-car driver. From 2011 through the date of the final hearing, Jackson worked part time as a car washer at UPS's West Palm Beach facility. Jackson, who is an insulin-dependent diabetic, alleges that UPS unlawfully discriminated against him based upon his disability (diabetes), either by refusing to return him to his former position of package-car driver in August 2012 when he claims to have been medically cleared for such work, or by failing to make a reasonable accommodation for his disability, which in Jackson's view requires that UPS offer him what is known in company parlance as an "inside-inside" (or "22.3") position——that is, a position comprising two part-time jobs in a combination affording the employee full-time hours. In 2006, as mentioned, Jackson was employed as a full- time package-car driver for UPS. That year, Jackson learned that he had diabetes mellitus. This is an especially worrisome diagnosis for a commercial driver of a vehicle in interstate commerce, for such vehicles are under the regulatory jurisdiction of the federal Department of Transportation ("USDOT"), and federal regulations disqualify insulin-dependent diabetics from driving commercial motor vehicles. Fortunately for Jackson, when he was initially diagnosed, he did not require insulin to control the disease. The parties agree that to drive a UPS package car, an employee must be medically certified as physically qualified pursuant to federal law. To satisfy this requirement, the employee must undergo a physical examination and obtain a medical examiner's certificate attesting that he is physically qualified to drive commercial vehicles in interstate commerce. The parties refer to this instrument as a "DOT card." To repeat for emphasis, a person is physically qualified to be a commercial driver only if, among other things, he has "no established medical history or clinical diagnosis of diabetes mellitus currently requiring insulin for control." 49 C.F.R. § 391.41(b)(3). Thus, an insulin-dependent diabetic cannot obtain a DOT card (unless he applies for and receives an exemption from the diabetes standard, as explained below). UPS has a written job description for the package-car driver position that unambiguously requires a driver to comply with all USDOT-imposed conditions for operating a commercial motor vehicle in interstate commerce, which include the possession of a valid interstate DOT card. There is, to be clear, no dispute that a person is not qualified to hold the position of package-car driver for UPS if the person lacks a current DOT card. In 2009, Jackson was prescribed insulin to control his diabetes. Jackson informed UPS of this change in his physical condition, which rendered him medically unable to work as a package-car driver and cost him his DOT card in August 2009. Under the Collective Bargaining Agreement ("CBA") between UPS and the International Brotherhood of Teamsters Union, Jackson was entitled, because he remained physically able to work inside the company's facility, to be assigned temporarily to an "inside" job, which would guarantee him eight hours of work per day——the same number of hours a driver is guaranteed. Therefore, when Jackson notified UPS that he was now an insulin- dependent diabetic, UPS moved Jackson inside the building, where he worked from 12:45 a.m. to 8:45 a.m. each day as both a part- time car washer and part-time sorter in the "pre-load." Upon learning of his illness, UPS informed Jackson that he could apply to the USDOT Federal Motor Carrier Safety Administration ("FMCSA") for an exemption from the diabetes standard pursuant to the Federal Diabetes Exemption Program. If approved, such an exemption (or "DOT waiver") permits an insulin-dependent diabetic to receive a valid DOT card.1/ The application process for obtaining a DOT waiver takes up to six months and requires the applicant to undergo several medical examinations, including one by an endocrinologist and another by an ophthalmologist or optometrist. If the applicant is deemed eligible for the exemption, then the FMCSA must twice publish the applicant's name and information regarding his insulin use in the Federal Register, first allowing a 30-day period for public comment and then giving notice of the final agency decision. Upon granting an exemption, the FMCSA issues the applicant an exemption certificate, which remains valid for a maximum of two years and is conditioned on quarterly and annual medical monitoring.2/ A person who qualifies for a DOT card by virtue of having obtained a DOT waiver must have on his person a copy of the exemption certificate when on duty. 49 C.F.R. § 391.41(a)(1)(ii). At no time relevant to this case did Jackson apply to the FMCSA for an exemption from the diabetes standard, and he had not done so as of the final hearing. UPS has in place a process by which an employee may seek an accommodation for a disability. Jackson availed himself of this process in April 2010. After evaluating the medical information that Jackson submitted, UPS approved his request for an accommodation, in or around November 2010. On January 14, 2011, UPS managers met with Jackson to offer him an accommodation, which was to place him in one or the other of the two part-time positions he was then occupying. Jackson wanted a full-time position, but UPS did not have one available for him at that time. He was, therefore, given a choice between the part-time car washer position and the part- time position in pre-load. After consulting with his union steward, Jackson chose the part-time car washer position and started working in that capacity on January 25, 2011. As a part-time employee, Jackson was guaranteed three and one-half hours of work each day. Jackson conceded at hearing, however, that in practice he usually worked closer to eight hours daily, depending on the volume of work available at the facility. On occasion his hours fell to as low as five hours per day, but this was the exception, for his manager sought consistently to maximize Jackson's hours. Following his decision to accept the part-time car washer job as his accommodation, Jackson filed several grievances through the union requesting that he be allowed to work as a 22.3 employee. Jackson believed he had been treated unfairly because another employee at the West Palm Beach facility who is an insulin-dependent diabetic had a 22.3 job like the one Jackson wanted. That employee, however, had held his 22.3 position since 2005 or 2006, and the last time an inside-inside combination position had become available at the West Palm Beach facility was in 2009 or earlier. If such a position were to open up, Jackson could "bid" on it, but employees at the West Palm Beach facility already holding 22.3 positions, and full-time employees at the site, would have, in that order, the right to bid for the job ahead of Jackson who, as a part-time employee, would have a relatively low priority in the bidding process. The upshot is that, during the period relevant to this case, UPS never had a 22.3 position to offer Jackson. His grievances were denied. At some point in or around August 2012, after having worked as a part-time car washer for about one-and-a-half years, Jackson visited the medical clinic that conducts physical examinations for UPS drivers. Somehow, Jackson was able to obtain a DOT card from the clinic, even though, as the card indicates on its face, Jackson did not, as required, present to the medical examiner proof of an exemption from the diabetes standard, which he did not have. UPS questioned the validity of the DOT card and, because Jackson did not possess an exemption certificate as required by federal law, refused to let him drive a package car. On May 17, 2013, Jackson filed a charge of discrimination, alleging that UPS had discriminated against him because of his disability. Ultimate Factual Determinations Taken as a whole, the evidence in this case is either insufficient to establish that UPS discriminated unlawfully against Jackson on the basis of his medical condition; or it proves, affirmatively, that UPS did not, in all likelihood, unlawfully discriminate against him. Assuming that Jackson has a disability covered by the Florida Civil Rights Act, he is clearly unable to perform the essential functions of a package- car driver with or without a reasonable accommodation because, as an insulin-dependent diabetic, he does not meet the federal diabetes standard, and he has not obtained an exemption from that requirement; thus, Jackson failed to establish that he is a "qualified individual." Moreover, UPS provided Jackson with a reasonable accommodation when it placed him in the part-time car washer position which he has held since January 25, 2011. In sum, it is determined, as a matter of ultimate fact, that UPS did not violate the civil rights laws in its treatment of Jackson.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order finding UPS not liable to Jackson for disability discrimination. DONE AND ENTERED this 8th day of September, 2014, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM 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 September, 2014.
The Issue Whether Respondents violated the provisions of chapter 440, Florida Statutes, by failing to secure the payment of workers' compensation coverage, as alleged in the Stop-Work Orders, and, if so, what penalty is appropriate.
Findings Of Fact The Department is the state agency charged with enforcing the requirement of chapter 440, Florida Statutes, that employers in Florida secure workers' compensation coverage for their employees. § 440.107(3), Fla. Stat. Respondents are gas station/convenience stores located in South Florida. Northlake was created by Nazma Akter on May 6, 2014. MB was created by Ms. Akter on March 23, 2010. Congress Valero was created by Muhammad Saadat on July 21, 2011. Hena was created by Ms. Akter and Abu Ahsan on December 14, 2011. Hayma was created by Ms. Akter on December 14, 2011. Blue Heron was created by Ms. Akter on August 4, 2009. At all times relevant hereto, Respondents were duly-licensed to conduct business in the state of Florida. On February 2, 2015, the Department's Compliance Investigator Robert Feehrer, began a workers' compensation compliance investigation of Gardenia, LLC. Investigator Feehrer called the number listed for Gardenia, LLC, and was provided with a corporate office address. On February 10, 2015, upon arrival at Gardenia, LLC's, corporate office located at 165 US Highway 1, North Palm Beach, Florida, 33408, Investigator Feehrer spoke with Operations Manager Mohammad Hossain. Mr. Hossain stated that Gardenia, LLC, was a paper corporation and existed only for the purpose of paying unemployment taxes on the "six stores." Mr. Hossain went on to provide Investigator Feehrer with a list of Respondents and names of the employees that worked at each store. As an employee of Gardenia, LLC, and Respondents, Mr. Hossain's statements are party opponent admissions and bind Respondents. Lee v. Dep't of Health & Rehab. Servs., 698 So. 2d 1194, 1200 (Fla. 1997). With Mr. Hossain's statements and the list of Respondents' employees, Investigator Feehrer then consulted the Division of Corporations website, www.sunbiz.org, and confirmed that Respondents were current, active Florida companies. Investigator Feehrer then consulted the Department's Coverage and Compliance Automated System ("CCAS") for proof of workers' compensation coverage and exemptions associated with Respondents. Investigator Feehrer's CCAS search revealed that Respondents had no workers' compensation policies and no exemptions. On February 24, 2015, Investigator Feehrer conducted site visits at each of the six stores. Ms. Akter and Mr. Hossain accompanied Investigator Feehrer during these site visits. At all times material hereto, Ms. Akter was a corporate officer or managing member of each of the six Respondents. Muhammed Saadat and Abu Ahsan were corporate officers or managing members of Congress Valero, Hena, and Blue Heron. Kazi Ahamed was a corporate officer or managing member of Congress Valero and Hayma. Kazi Haider and Mohammed Haque were managing members of Hayma. All received compensation from the companies with which they were involved. Although Investigator Feehrer only personally observed one employee working at each location during his site visits, the payroll records revealed that at least four employees (including corporate officers or managing members without exemptions) received compensation for work at each location during the relevant period. Investigator Feehrer required additional information to determine compliance, and with Respondents' permission, contacted Respondents' accountant. Investigator Feehrer met with the accountant at least two times to obtain relevant information prior to March 30, 2015. Upon Ms. Akter's authorization, the accountant provided tax returns and payroll information for Respondents' employees. Information from Ms. Akter and Mr. Hossain also confirmed the specific employees at each of the six stores during the period of March 30, 2013, through March 30, 2015. On March 30, 2015, based on his findings, Investigator Feehrer served six Stop-Work Orders and Orders of Penalty Assessment. The Stop-Work Orders were personally served on Ms. Akter. Mr. Hossain was present as well and confirmed the lists of employees for each of the six stores were accurate. In April 2015, the Department assigned Penalty Auditor Christopher Richardson to calculate the six penalties assessed against Respondents. Respondent provided tax returns for the audit period and payroll transaction details were provided, as well as general ledgers/breakdowns, noting the employees for each Respondent company. Based on Investigator Feehrer's observations of the six stores on February 24, 2015, Auditor Richardson used the classification code 8061 listed in the Scopes® Manual, which has been adopted by the Department through Florida Administrative Code Rule 69L-6.021(1). Classification code 8061 applies to employees of gasoline stations with convenience stores. Classification codes are four-digit codes assigned to various occupations by the National Council on Compensation Insurance to assist in the calculation of workers' compensation insurance premiums. In the penalty assessment, Auditor Richardson applied the corresponding approved manual rate for classification code 8061 for the related periods of non-compliance. The corresponding approved manual rate was correctly utilized using the methodology specified in section 440.107(7)(d)1. and rule 69L-6.027 to determine the final penalties. The Department correctly determined Respondents' gross payroll pursuant to the procedures required by section 440.107(7)(d) and rule 69L-6.027. On January 14, 2016, the Department served the six Amended Orders of Penalty Assessment on Respondents, assessing penalties of $1,367.06 for Northlake, $9,687.00 for MB, $12,651.42 for Congress Valero, $18,508.88 for Hena, $7,257.48 for Hayma, and $4,031.60 for Blue Heron. The Department has demonstrated by clear and convincing evidence that Respondents were engaged in the gasoline station, self-service/convenience store industry in Florida during the periods of noncompliance; that Respondents failed to secure the payment of workers' compensation for their employees, as required by Florida's Workers' Compensation Law; and that the Department correctly utilized the methodology specified in section 440.107(7)(d)1. to determine the appropriate penalties.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a consolidated final order upholding the Stop-Work Orders and the Amended Orders of Penalty Assessment in the amounts of $1,367.06 for Northlake Mobile Enterprises, Inc.; $9,687.00 for MB Food and Beverage, Inc.; $12,651.42 for Congress Valero, Inc.; $18,508.88 for Hena Enterprises, Inc.; $7,257.48 for Hayma Enterprises, Inc.; and $4,031.60 for Blue Heron BP, Inc. DONE AND ENTERED this 16th day of June, 2016, in Tallahassee, Leon County, Florida. S MARY LI CREASY 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 16th day of June, 2016.
The Issue Whether Respondent is in violation of Subsection 479.11(2), Florida Statutes, as alleged in the Administrative Complaint.
Findings Of Fact James Hackett, Outdoor Advertising Inspector, was called and testified that he had inspected the subject sign which was located on the site of Glen's Car Wash, which is located at 1819 Federal Highway (U.S. 1) in Broward County within a municipality. The witness testified that he had not measured the distance from the sign to the edge of the right of way and did not know for certain the location of the boundaries of said right of way. He testified that the subject sign as within two to three feet of the sidewalk which he assumed to he the boundary of the right of way. Dorlen LaBounty, a Department of Transportation employee, was called and identified a photograph which he had taken of the subject sign, which photograph was marked as Exhibit 1 and received into evidence. Exhibit 1 was taken by LaBounty from the west side of Federal Highway south of the site of Glen's Car wash looking north. Having examined Exhibit 1, the Hearing Officer cannot determine the location of the street (U.S. L or Federal Highway) relative to the sign because the picture does not show the street, sidewalk, and base of the sign. The witness Hackett 20 response to she Hearing Officer's direction did prepare a rough diagram which indicated the location of the sign relative to the Glen's Car Wash site and the intersection. This diagram was rough and was not to scale, and was received solely to clarify the location of the sign with regard to Glen's Car Wash.
Recommendation The Hearing Officer, based upon the foregoing findings of fact and conclusions of law, recommends that the charges be dropped. DONE and ORDERED this 16th day of February, 1976. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Theodore P. Mavrick, Esquire Suite 205 2601 East Oakland Park Boulevard Fort Lauderdale, Florida 33306 Philip S. Bennett, Esquire Office of Legal Operations Department of Transportation Haydon Burns Building Tallahassee, Florida 32304
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 Petitioner, Brian’s Painting and Wall Papering, Inc., conducted operations in the State of Florida without obtaining workers’ compensation coverage, meeting the requirements of Chapter 440, Florida Statutes (2007),1 in violation of Subsection 440.107(2), Florida Statutes. If so, what penalty should be assessed by Respondent, Department of Financial Services, Division of Workers’ Compensation, pursuant to Section 440.107, Florida Statutes, and Florida Administrative Code Chapter 69L.
Findings Of Fact Respondent is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers’ compensation for the benefit of their employees. § 440.107, Fla. Stat. Petitioner is a corporation domiciled in Florida and engaged in the construction industry, providing painting and wallpapering services to private residences in Florida. On December 4, 2007, Investigator Ira Bender conducted a random workers’ compensation compliance check of a new home construction site located at 4009 Twenty-second Street, Southwest, in Lehigh Acres, Florida. Investigator Bender observed two men painting. He later identified the two men as Larry Zoelner and Brian Zack, who were later determined to be Petitioner’s employees. Investigator Bender continued the investigation of Petitioner, utilizing the Respondent’s Compliance and Coverage Automated System (“CCAS”) database that contained all workers’ compensation insurance policy information from the carrier to an insured and lists all the workers’ compensation exemptions in the State of Florida. Based on his search of CCAS, Investigator Bender determined that for the period, December 3, 2004, through December 4, 2007 (“assessed penalty period”), Petitioner did not have a State of Florida workers’ compensation insurance policy or a valid, current exemption for any of Petitioner’s employees, including Zoelner and Zack. Based on his search of CCAS, he also determined that Petitioner did not have a State of Florida workers’ compensation insurance policy or a valid, current exemption for Brian Galvin, Petitioner’s owner and operator, for the assessed penalty period. Galvin admitted that he did not have an exemption prior to December 4, 2007. Section 440.05, Florida Statutes, allows a corporate officer to apply for a construction certificate exemption from workers’ compensation benefits or compensation. Only the named individual on the application is exempt from carrying workers’ compensation insurance coverage. Petitioner was not in possession of a current, valid construction industry exemption for its corporate officer, Galvin, during the three-year search period. To be eligible for the exemption in the construction industry, an employer must pay a $50 processing fee and file a “notice of election to be exempt” application with Respondent for each corporate officer and have that application processed and approved by it. 7. Subsections 440.107(3) and 440.107(7)(a), Florida Statutes, authorized Respondent to issue SWOs to employers unable to provide proof of workers’ compensation coverage, including proof of a current, valid workers’ compensation exemption. Failure to provide such proof is deemed “an immediate serious danger to public health, safety, or welfare . . .” § 440.107(7)(a), Fla. Stat. Based on the lack of worker’s compensation coverage and a current, valid workers’ compensation exemption for its employees, including Galvin, Respondent issued a SWO on Petitioner on December 4, 2007. The SWO ordered Petitioner to cease all business operations for all worksites in the State of Florida. On the day the SWO was issued, Investigator Bender also served Petitioner with a “Request for Production of Business Records for Penalty Assessment Calculation,” for the purpose of enabling Respondent to determine a penalty under Subsection 440.107(7), Florida Statutes. Pursuant to Florida Administrative Code Rule 69L-6.015, Investigator Bender requested business records from Petitioner for the assessed penalty period. The requested records included payroll documents, copies of certificates of exemptions, employee leasing records, and other business records. Investigator Bender was satisfied that the records produced by Petitioner were an adequate response to the business records request. Based on Investigator Bender’s review of the business records, he determined that Galvin was dually-employed during the assessed period. Dual employment occurs when an employee is paid remuneration by two different employers. Galvin was simultaneously employed by SouthEast Personnel Leasing, Inc., as a painter and by Petitioner as its chief operating officer. In calculating the assessed penalty, Investigator Bender only took into account Petitioner’s payroll. It was determined that the payroll from the leasing company demonstrated secured payment of workers’ compensation coverage for the two painters and for Galvin, when he was operating as a painter. Pursuant to Florida Administrative Code Rule 69L- 6.035, Investigator Bender included “dividends” paid by Petitioner to Galvin during the assessed penalty period, in calculating Petitioner’s total payroll amount used in the calculation of the assessed penalty. Galvin argued that dividends paid to him by Petitioner should be excluded from the calculation. However, the dividends that Petitioner paid to Galvin constituted unsecured payment for workers’ compensation coverage, in violation of Chapter 440, Florida Statutes, and the Florida Insurance Code. Through the use of the produced records, Respondent calculated a penalty for the assessed period. The Amended Order, which assessed a penalty of $45,363.76, was issued and served to Petitioner on December 13, 2007. Based on business records Investigator Bender received from SouthEast Personnel Leasing, Inc., on December 17, 2007, Investigator Bender determined that the classification code assigned for Galvin should be changed from 5474 to 5606. Classification code 5474 represented the designation for a painter while classification code 5606 represented the designation for a manager. In the course of his investigation, Investigator Bender also deleted Charlie Galvin after he determined Charlie Galvin was not Petitioner’s employee. Investigator Bender assigned the new class code to the type of work performed by Galvin while working as a manger for Petitioner, utilizing the SCOPES Manual. He multiplied the class code’s assigned approved manual rate with the payroll per $100, and then multiplied all by 1.5. Consequently, the 2nd Amended Order, which was issued and served to Petitioner on December 18, 2007, assessed a penalty in the amount of $19,943.08. The recalculated penalty, as calculated, was consistent with the method in which the investigator had calculated the previous penalties.
Recommendation Based on the Findings of Fact and Conclusions of Law, it RECOMMENDED that Petitioner enter a final order, as follows: Petitioner failed to secure workers’ compensation coverage for its employees, including its corporate officer, as required by statute; and Petitioner be assessed a penalty of $19,943.08. DONE AND ENTERED this 22nd day of May, 2008 in Tallahassee, Leon County, Florida. S DANIEL M. KILBRIDE 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 22nd day of May, 2008
The Issue The issues are whether the individuals included in the Amended Order of Penalty Assessment were employees of Respondent during the penalty period designated therein and, if so, whether Respondent failed to secure workers' compensation coverage in violation of Section 440.107, Florida Statutes (2003); and whether Petitioner should impose a penalty against Respondent in the amount of $156,880.87.
Findings Of Fact Petitioner is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers' compensation for the benefit of their employees. § 440.107, Fla. Stat. (2002). Respondent is an "S" corporation domiciled in Florida and engaged in the construction industry. The company was incorporated in late October 2003 and began operating at or near that time. At all times relevant to this proceeding, David Roquet was the president and sole shareholder of the company. On April 7, 2004, Petitioner conducted an investigative sweep of areas in Pasco County, including the Lexington Oaks Subdivision. While in the Lexington Oaks Subdivision, one of Petitioner's investigators observed five individuals working on a residence under construction. These individuals were framing the house and performing other carpentry work. At the time of the investigation, John Sullivan, an investigator for Petitioner, spoke to Maurilio Carrizales, one of the five individuals working at the site. Later, Mr. Sullivan also spoke with Mr. Roquet after he arrived at the construction site. On April 7, 2004, Mr. Sullivan issued a Stop Work Order against Respondent after he determined that Maurilio Carrizales and other individuals working on the construction project did not have workers' compensation insurance. That same day, Petitioner issued to Mr. Roquet, as Respondent's president, a Request for Production of Business Records for Penalty Assessment Calculation. On April 12, 2004, pursuant to the Division's request, Mr. Roquet provided the Division with copies of Respondent's business records, which included check stubs, payroll records, tax records, and workers' compensation documents. Respondent's business records revealed that Respondent made direct payments to Maurilio Carrizales, Raudel Carrizales, Victor Carrizales, and George Betz for the construction work they performed for the company. According to the check stubs and tax records, Respondent treated these individuals as subcontractors and did not withhold any taxes from the direct payments that were made to them. Respondent did not have workers' compensation coverage on the individuals named in paragraph 7 during the penalty periods covered in the Amended Order of Penalty Assessment. There was no documentation in Respondent's business records which indicated that Maurilio Carrizales, Raudel Carrizales, Victor Carrizales, and George Betz had workers' compensation coverage or exemptions from such coverage during the penalty period. Moreover, Petitioner, which maintains a database of all workers' compensation exemptions in the State of Florida, determined that there were no exemptions from workers' compensation coverage for Mr. Roquet,1/ Raudel Carrizales, Maurilio Carrizales, Victor Carrizales, and George Betz for the time periods which are at issue in this proceeding. Based on Petitioner's review of its records and on the business records provided by Respondent, Petitioner issued an Amended Order of Penalty Assessment which assessed a penalty of $156,880.87 against Respondent for failing to secure workers' compensation as required by Subsection 440.107(2), Florida Statutes (2003). The penalty amount of $156,880.87 was determined by multiplying the payroll amount by the workers' compensation approved manual rate for carpentry of $37.91. That amount was then multiplied by 1.5. See Subsection 440.107(7)(d), Florida Statutes (2003), for the method of calculating penalties. The penalty assessed in the Amended Order is based on Petitioner's determination that Mr. Roquet, Maurilio Carrizales, Raudel Carrizales, Victor Carrizales, and George Betz were Respondent's employees during designated time periods and on the gross payments Respondent made to those employees. The Penalty Assessment Worksheet, upon which the total penalty amount is based, listed Respondent's employees and its gross payments to the employees and the periods which Petitioner determined the employees had no workers' compensation coverage or exemptions, as follows: (1) from October 30, 2003, until December 17, 2003, Mr. Roquet was paid $22,994; (2) from October 31, 2003, until December 31, 2003, Maurilio Carrizales was paid $33,536; (3) from October 31, 2003, through December 31, 2003, Raudel Carrizales' was paid $33,536; (4) from January 1, 2004, until April 7, 2004, Maurilio Carrizales was paid $57,023; (5) from February 1, 2004, through April 7, 2004, Raudel Carrizales was paid $24,666; (6) from January 4, 2004, until April 7, 2004, Victor Carrizales was paid $99,938; and (7) from January 16, 2004, until January 23, 2004, George Betz was paid $4,190. During this proceeding, Respondent stipulated that during the time period at issue in this proceeding George Betz did not have either workers' compensation coverage or a valid exemption from such coverage.2/ Respondent's net or ordinary income for 2003, as reported on its Internal Revenue Service Form 1120S (IRS Form 1120S) for the tax year 2003, was $22,994. Based on its review of this document, Petitioner determined that in 2003, Mr. Roquet received compensation of $22,994 from the company. Contrary to Petitioner's conclusion, the $22,994 was not compensation to Mr. Roquet and should not have been attributed to him as such. The ordinary income of Respondent, a corporation, reported on IRS Form 1120S prepared for the tax year 2003, does not represent compensation that was paid to Mr. Roquet, the sole shareholder and officer in the company. Because the corporation had initiated operations in late October 2003 and operated only the last two months of 2003, Mr. Roquet had not begun compensating himself in 2003 and had performed no services for the company for which he expected or received remuneration. In mid-October 2003, when Mr. Roquet filed for the corporation's federal identification number, he indicated on the form that he would begin receiving compensation in January 2004. That form was received and approved by IRS on or about October 21, 2003, and consistent with the intent stated therein, Mr. Roquet began receiving compensation from Respondent in January 2004. In 2003, Respondent made a distribution of $6,700 to Mr. Roquet. However, this distribution was not compensation to Mr. Roquet, but was reimbursement to him for expenses he had paid out of his personal funds for some of the company's day-to- day operating costs and was also a withdrawal of dividend distributions from the company. For the reasons stated in paragraphs 13, 14, and 15 above, Respondent's ordinary income of $22,994, and no part thereof, is compensation to Mr. Roquet for purposes of determining any penalty assessment against Respondent. Mr. Roquet, as Respondent's president, entered into an oral agreement with three brothers: Maurilio Carrizales, Raudel Carrizales, and Victor Carrizales. Pursuant to the oral agreement, each brother was a subcontractor of the company and would be paid $1.67 per square foot for the framing work that he completed. With the funds that the company paid, each of the brothers had to buy whatever supplies and materials were needed to complete the job. However, there was no written agreement to describe or define the business relationship between Respondent and each of the brothers. Prior to Respondent's hiring the Carrizales brothers, Mr. Roquet requested information regarding their workers' compensation coverage. Based on information provided, Mr. Roquet mistakenly believed that both Raudel Carrizales and Maurilio Carrizales had workers' compensation coverage through an employee leasing company and that Victor Carrizales had an exemption from such coverage. However, at the time periods relevant to this proceeding, these individuals had neither workers' compensation coverage nor exemptions from coverage. Victor Carrizales, as a sole proprietor of a construction business, had a valid exemption from workers' compensation coverage from October 25, 2000, to October 25, 2002, and from February 15, 2003, until December 31, 2003. The letter of exemption for Victor Carrizales was initially valid from February 15, 2003, until February 14, 2005, but became invalid after December 31, 2003, and individuals previously exempt had to re-apply for exemption. That change in the law became effective January 1, 2004. See Fla. Admin. Code R. 69L-6.012. The portion of the penalty assessment attributable to Victor Carrizales was January 1, 2004, to April 7, 2004, a time period in which he had no workers' compensation coverage or exemption. During this proceeding, Respondent contended that Raudel Carrizales, Maurilio Carrizales, and Victor Carrizales had workers' compensation coverage through a personnel leasing company, Southeast Personnel Services, Inc. (Southeast Personnel). Pursuant to Subsection 468.520(5), Florida Statutes (2003), an employee leasing company is a business entity engaged in employee leasing. "Employee leasing" is an arrangement whereby a leasing company assigns its employees to a client and allocates the direction of and control over the leased employees between the leasing company and the client. § 468.520(4), Fla. Stat. (2003). When the employee leasing company accepts a client, the client becomes an employee of the employer's leasing company. An employee leasing company is the employer of the leased employees and is responsible for providing workers' compensation pursuant to Chapter 440, Florida Statutes (2003). § 468.529(1), Fla. Stat. (2003). Additionally, an employee leasing company assumes responsibility for the payment of wages to the leased employees without regard to payments by the client and for the payment of payroll taxes and collection of taxes from the payroll of leased employees. § 468.525(4)(b) and (c), Fla. Stat. (2003). Records from Southeast Personnel provided to Petitioner reflect that at one time, Raudel Carrizales, through his company, Carrizales Brothers Framing, was associated with that personnel leasing company pursuant to a written agreement (Agreement) entered into on or about October 27, 2003.3/ At the time the Agreement was executed, both Raudel Carrizales and Maurilio Carrizales were listed by Southeast Personnel as employees of Carrizales Brothers Framing. Pursuant to the Agreement, as the leasing company, Southeast Personnel was responsible for providing workers' compensation coverage for its leased employees, who were paid through the leasing company. The Agreement, which refers to leased employees as "assigned employees," provides in relevant part the following: Client "represents and warrants that all wages (including bonuses) paid to any assigned employee are to be paid through SPLI [Southeast Personnel] and that any such assigned employee will receive no additional wages in any form from Client. Client agrees that it will be solely responsible for damages of any nature arising out of Client's failure to report to SPLI [Southeast Personnel] the payment to an assigned employee of any remuneration for services rendered for Client. In addition, SPLI [Southeast Personnel] shall not be considered to be an employer of any individual for who required payroll information is not supplied during any pay period (except as may be required by law). Client assumes full responsibility for workers' compensation claims, . . . and any and all other obligations or claims pertaining in any way to any individual for whom payroll information is not supplied during any payroll period (except as may be required by law), or who is paid in whole or part by Client, as an employee, independent contractor, or in any other capacity. For workers' compensation coverage to apply through the leasing company, the "assigned employees" must be paid through the leasing company. In this case, none of the employees listed on the Penalty Worksheet were paid by Southeast Personnel for the construction work they did for Respondent. Instead, they were paid directly by Respondent. There is no evidence that these direct payments were ever reported to Southeast Personnel. Rodney Holderbau, a marketing specialist with Southeast Personnel, testified that Raudel Carrizales, Maurilio Carrizales, and Victor Carrizales had workers' compensation coverage through Southeast Personnel, even though they were paid directly by Respondent for the work they did for that company and received no payments for that job from Southeast Personnel. However, no documentary evidence was presented to support this position. Mr. Holderbau's testimony that Raudel Carrizales, Maurilio Carrizales, and Victor Carrizales had workers' compensation coverage during all the alleged periods noted on the Amended Order of Penalty Assessment is neither credible nor persuasive. As a marketing specialist responsible for recruiting companies to become clients of Southeast Personnel, Mr. Holderbau failed to establish that he possessed the qualifications or position within Southeast Personnel to speak on behalf of the company and to interpret the terms of the contract. The claim of Mr. Holderbau is inconsistent with and contradicts the meaning of employee leasing companies within the meaning of Chapter 468, Part XI, Florida Statutes (2003), and the terms of the Agreement between Raudel Carrizales' company, Carrizales Brothers Framing, and Southeast Personnel. Raudel Carrizales allowed the Agreement between Carrizales Brothers Framing and Southeast Personnel to expire on January 31, 2004. Raudel Carrizales, on behalf of his new company, signed another contract with Southeast Personnel on April 13, 2004, six days after the Stop Work Order was issued. Therefore, between January 31, 2004, and April 13, 2004, Raudel Carrizales had no workers' compensation coverage through the employee leasing company. Maurilio Carrizales, who was listed on Southeast Personnel documents as an employee of Carrizales Brothers Framing, had no workers' compensation coverage through Southeast Personnel on January 31, 2004, when the contract between Carrizales Brothers Framing and Southeast Personnel expired. Maurilio Carrizales again became eligible for workers' compensation coverage through Southeast Personnel, as a leased employee, effective April 13, 2004, almost a week after the Stop Work Order was issued. Between January 31, 2004, and April 12, 2004, Raudel Carrizales had no workers' compensation coverage through Southeast Personnel. During the time period alleged in the Amended Order of Penalty Assessment, Raudel Carrizales and Maurilio Carrizales received direct payments from Respondent, thus, circumventing Southeast Personnel and the coverage that they may have had through that employee leasing company. Respondent did not intend to violate the law. Rather, he mistakenly believed that Raudel Carrizales, Maurilio Carrizales, and George Betz had workers' compensation coverage; that Victor Carrizales had an exemption from workers' compensation coverage; and/or that the aforementioned individuals were subcontractors to whom he had no insurance- related responsibility. Nonetheless, these individuals did not have workers' compensation coverage or exemptions from coverage. Thus, they were employees of Respondent and, as such, Respondent was required to provide workers' compensation coverage for them. Petitioner correctly calculated the penalty assessment based on the money paid to Respondent's employees, Raudel Carrizales, Maurilio Carrizales, Victor Carrizales, and George Betz; the class code assigned to each employee utilizing the SCOPES Manual; and the statutory guidelines in Subsection 440.107(d), Florida Statutes (2003). Based on that calculation, the correct penalty assessment in this case is $143.805.33.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers' Compensation, enter a final order confirming the Stop Work Order and imposing a penalty in the amount of $143,805.33. DONE AND ENTERED this 28th day of December, 2004, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD 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 28th day of December, 2004.
