Findings Of Fact 11. The factual allegations contained in the Stop-Work Order and Order of Penalty Assessment issued on March 12, 2009, and the Amended Order of Penalty Assessment issued March 30, 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 Amended Order of Penalty Assessment served in Division of Workers’ Compensation Case No. 09-075-1A, and being otherwise fully advised in the premises, hereby finds that: 1. On March 12, 2009, 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. 09-075-1A to REGIONAL CONCRETE, INC. The Stop-Work Order and Order of Penalty Assessment included a Notice of Rights wherein REGIONAL CONCRETE, INC. 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 March 12, 2009, the Stop-Work Order and Order of Penalty Assessment was served by personal service on REGIONAL CONCRETE, INC. 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 March 30, 2009, the Department issued an Amended Order of Penalty Assessment to REGIONAL CONCRETE, IN C. in Case No. 09-075-1A. The Amended Order of Penalty Assessment assessed a total penalty of $122,034.51 against REGIONAL CONCRETE, INC. The Amended Order of Penalty Assessment included a Notice of Rights wherein REGIONAL CONCRETE, INC. 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 April 1, 2009, the Amended Order of Penalty Assessment was served by certified mail on REGIONAL CONCRETE, INC. A copy of the Amended Order of Penalty Assessment is attached hereto as “Exhibit B” and incorporated herein by reference. 5. On April 20, 2009, REGIONAL CONCRETE, INC. filed a petition requesting a formal administrative hearing with the Department. The Department forwarded the petition to the Division of Administrative Hearings on June 8, 2009, and the matter was assigned DOAH Case No. 09-3046. 6. On July 24, 2009, the Department served its discovery requests on REGIONAL CONCRETE, INC., which included interrogatories, requests for admissions, and requests for production. Responses or objections to the discovery were required to be served on the Department within thirty days. REGIONAL CONCRETE, INC. failed to respond to the discovery requests within thirty days. 7. On August 28, 2009, the Department filed a Motion to Compel Discovery. The Honorable P. Michael Ruff, the Administrative Law Judge, entered an Order on Motion to Compel on September 15, 2009, which required REGIONAL CONCRETE, INC. to serve responses to the requests for admission, interrogatories, and requests for production no later than September 18, 2009. 8. On September 25, 2009, the parties filed a Joint Response to Order Granting Continuance wherein the parties agreed REGIONAL CONCRETE, INC. would submit to the Department responses to the discovery requests by October 23, 2009. Since conferring on the Joint Response to Order Granting Continuance, the Department has made several unsuccessful attempts to reach REGIONAL CONCRETE, INC. 9. On November 3, 2009, the Department filed a Motion to Deem Matters Admitted and to Relinquish Jurisdiction Pursuant to Section 120.57(1)(i), Florida Statutes, with the Division of Administrative Hearings after REGIONAL CONCRETE, INC. failed to respond to the discovery request by. October 23, 2009. A hearing on the motion was held on November 20, 2009, during which several’ unsuccessful attempts were made to contact REGIONAL CONCRETE, INC. The Department also attempted to contact REGIONAL CONCRETE, INC. by telephone after the hearing on the motion, but was unsuccessful. After the hearing on the motion, the Honorable James H. Peterson, III, the Administrative Law Judge, entered an Order to Show Cause which ordered REGIONAL CONCRETE, INC. to show good cause within seven days as to why the Motion to Deem Matters Admitted and to Relinquish Jurisdiction Pursuant to Section 120.57(1)(@, Florida Statutes, should not be granted. A copy of the Order to Show Cause is attached hereto as “Exhibit C” and incorporated herein by reference. 10. On December 3, 2009, the Honorable James H. Peterson, II, entered an Order Closing File deeming the admissions contained in the discovery requests admitted. The Order Closing File further concluded that there were no disputed issues of material fact and relinquished jurisdiction of the matter to the Department for final disposition. A copy of the Order Closing File is attached hereto as “Exhibit D” and incorporated herein by reference.
The Issue The issue is whether the Stop-Work Order and 2nd Amended Order of Penalty Assessment issued by Petitioner, Department of Financial Services, Division of Workers' Compensation (Department), on July 1, 2015, and February 29, 2016, respectively, should be upheld.
Findings Of Fact The Department is the state agency responsible for enforcing the various requirements of chapter 440. Respondent is a Florida corporation with offices located at 1904 28th Avenue North, St. Petersburg, Florida. The company is engaged in the construction business, and its activities fall within the statutory definition of "construction industry." See § 440.02(8), Fla. Stat. Respondent also does business under the name of M & M Construction of South Florida, but both are the same corporate entity with the same Federal Employer Identification Number and use the same bank accounts. Respondent's assertion that the two are separate and work done under the "d/b/a" name cannot be used to establish liability under chapter 440 is rejected. On July 1, 2015, Munal Abedrabbo, a Department compliance inspector, made a random inspection of a job site at 4115 East Busch Boulevard, Tampa, where remodeling work on a commercial building was being performed. When he entered the premises, Mr. Abedrabbo observed Bernard Reed on a ladder painting an interior ceiling. After identifying himself, he informed Mr. Reed that he needed to verify his insurance coverage. Mr. Abedrabbo was directed to Mr. Cook, Respondent's vice-president and part owner, who acknowledged that he was the general contractor on the job and had three employees/painters working that day, Reed, James Dabnes, and John Russell. Mr. Cook informed the inspector that the three employees were leased from Paychek, Inc., an employee leasing company, and that firm provided workers' compensation coverage for the leased employees. Mr. Abedrabbo returned to his vehicle and accessed on his computer the Department of State, Division of Corporations, Sunbiz website to verify Respondent's status as a corporation. After verifying that it was an active corporation, he then checked the Department's Coverage and Compliance Automated System to verify whether Respondent had a workers' compensation policy or any exemptions. He was unable to find any active policy for Respondent, as the most recent policy had lapsed in January 2013. Mr. Cook has an exemption, covering the period October 20, 2014, through October 19, 2016, but the exemption is with a different company, Thomas Cook Carpenter, LLC. Mr. Abedrabbo spoke again with Mr. Cook and informed him that Department records showed no insurance coverage for his employees. Mr. Cook telephoned Paychek, Inc., and then confirmed that the three painters had no workers' compensation insurance. Mr. Cook explained that before he allowed Mr. Reed to begin work, Mr. Reed had shown him an insurance certificate that turned out to be "falsified," and then "conveniently lost it" when the inspector appeared. He also explained his firm "was caught with our pants down once before" and he did not want it to happen again. For that reason, he contended he was especially careful in hiring leased employees. Even so, he does not deny that Respondent has had no insurance in place since January 2013 and Paychek, Inc., failed to provide coverage. The Department issued a Stop Work Order and Penalty Assessment the same day. To determine the amount of Respondent's unsecured payroll for purposes of assessing a penalty in accordance with section 440.107(7)(d)(1), Florida Statutes, the Department requested Respondent to provide business records for the preceding two years. This period of non-compliance is appropriate, as Respondent was actively working in the construction industry during that time period without securing insurance. The request informed Mr. Cook that if complete records were not provided, the Department would use the imputation formula found in section 440.107(7)(e) to calculate the penalty. After reviewing the information provided by Respondent, on August 18, 2015, the Department issued an Amended Order of Penalty Assessment in the amount of $114,144.52 for the period July 7, 2014, through June 30, 2015. Based on two depositions of Mr. Cook, a 2nd Amended Order of Penalty Assessment in the amount of $105,663.48 was issued on February 29, 2016. The Department penalty auditor calculated the final penalty assessment using the "imputed" method because insufficient business records were provided to determine Respondent's payroll for all relevant time periods, except the month of October 2014. In addition to missing bank statements and check images, Respondent failed to provide its entire second bank account. Although Mr. Cook contends some records were in the possession of M & M Construction of South Florida, and he could not access them in a timely manner, this does not excuse Respondent's failure to timely produce all relevant records. Under the imputed method, the penalty auditor used the average weekly wage ($841.57) times two to determine Respondent's payroll for the imputed portions. See Fla. Admin. Code R. 69L-6.028(2); § 440.107(7)(e), Fla. Stat. The gross payroll was then divided by 100 in order to be multiplied by the applicable approved manual rates. The Department applied the proper methodology in computing the penalty assessment. A class code is a numerical code, usually four digits, assigned to differentiate between the various job duties or scope of work performed by the employees. The codes were derived from the Scopes Manual Classifications (Manual), a publication that lists all of the various jobs that may be performed in the context of workers' compensation. The Manual is produced by the National Council on Compensation Insurance, Inc., an authoritative data collecting and disseminating organization for workers' compensation. The Manual provides that class code 5474 applies to painters who perform painting activities. Reed, Dabnes, and Russell were assigned this code. Mr. Cook agrees this code is correct. Mr. Cook was assigned class code 5606 (construction executive) and placed on the penalty assessment because he is an owner of the corporation and was managing the work. Although Mr. Cook argues he had an exemption and should not be placed on the assessment, Department records reflect that Mr. Cook had an exemption with a different company during the audit period. Therefore, his inclusion in the employee census was correct. Because Respondent's business records included checks written to Kerry Francum for tile work, he was assigned class code 5348 (tile work) and placed on the penalty assessment as an employee. At his deposition, Mr. Cook acknowledged that Francum performed tile work for his firm and was an employee. At hearing, Mr. Cook changed his testimony and contended Francum was only a material supplier, not a subcontractor, and should not be on the penalty assessment. This assertion has not been accepted. Mr. Francum's inclusion on the assessment is appropriate. Respondent's business records also indicated a check was written to Kerry Randall, a tile subcontractor. At hearing, however, Mr. Cook established, without contradiction, that because of Mr. Randall's violent temper, he was paid a one-time fee of $1,000.00 and let go before he performed any work. Mr. Randall should be removed from the assessment. The Department has demonstrated by clear and convincing evidence that the 2nd Amended Order of Penalty Assessment is correct, less any amount owed for Mr. Randall.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order assessing Respondent the penalty in the 2nd Amended Order of Penalty Assessment, less any amount owed for Mr. Randall. DONE AND ENTERED this 21st day of November, 2016, in Tallahassee, Leon County, Florida. S D. R. ALEXANDER 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 21st day of November, 2016.
The Issue The issue in this case is whether Respondent violated the provisions of chapter 440, Florida Statutes, by failing to secure the payment of workers' compensation, as alleged in the Stop-Work Order and 3rd Amended Order of Penalty Assessment, and, if so, what penalty is appropriate.
Findings Of Fact Petitioner, Department of Financial Services, Division of Workers' Compensation, is the state agency responsible for enforcing the requirement that employers in the State of Florida secure the payment of workers' compensation for their employees and corporate officers. Respondent, Shriji Krupa, Inc., is a Florida corporation engaged in business operations as a gas station (self-service and convenience-retail) in the State of Florida. Mr. Hemant Parikh, one of Respondent's corporate officers, testified that, on November 20, 2012, Respondent was inspected by Petitioner's Compliance Investigator, Mike Fuller. Mr. Fuller advised Mr. Parikh that Respondent needed to close the store. According to Mr. Hemant Parikh, at the time of inspection, Respondent had two corporate officers and four additional employees. Mr. Parikh explained that, at the time of inspection, Respondent had two store locations with three employees working at each locale. Mr. Shrikant Parikh, another corporate officer, testified that, at the time of inspection, Respondent was operating under the mistaken belief that its corporate officers were exempt from workers' compensation coverage. Pursuant to the record evidence, on November 28, 2012, Mr. Fuller served a Stop-Work Order and Order of Penalty Assessment on Respondent. Pursuant to the Stop-Work Order, Respondent was ordered to cease all business operations for all worksites in the state based on the following: Failure to secure the payment of workers' compensation in violation of sections 440.10(1), 440.38(1), and 440.107(2) F.S., by: failing to obtain coverage that meets the requirements of Chapter 440, F.S., and the Insurance Code. After receiving the Stop-Work Order, on that same date, Respondent obtained workers' compensation coverage with an effective date of November 29, 2012. Respondent has maintained appropriate coverage to date. Following the Stop-Work Order, Respondent submitted various records for Petitioner's review.2/ Petitioner's sole witness was Ms. Lynne Murcia. Ms. Murcia works in Petitioner's Bureau of Compliance wherein she calculates penalties for those employers found in violation of the workers' compensation laws. Ms. Murcia performs approximately 200 penalty calculations per year. Ms. Murcia first became involved with Respondent in January 2013, when she received an assignment to perform a penalty calculation. Ms. Murcia reviewed all records previously submitted by Respondent. From the records received, Ms. Murcia was able to determine that Respondent employed four or more employees on a regular basis. Ms. Murcia explained that "employees" include corporate officers that have not elected to be exempt from workers' compensation. After conducting a search within the Florida Division of Corporations, Ms. Murcia was able to determine that no exemptions existed for Respondent's corporate officers. Ms. Murcia further conducted a proof of coverage search via Petitioner's Coverage and Compliance Automated System ("CCAS"), which is a database that contains all insurance coverage and exemptions for each employer throughout the State of Florida. The search revealed that Respondent possessed appropriate coverage from November 29, 2012, to the present; however, no prior coverage was indicated. Ms. Murcia conducted a penalty assessment for the non- compliance period of November 29, 2009, through November 28, 2012. From the records submitted by Respondent, Ms. Murcia correctly identified Respondent's employees and gross wages paid during the penalty period. All of the individuals listed on the Penalty Worksheet of the 3rd Amended Order of Penalty Assessment, dated August 27, 2014, were "employees" (as that term is defined in section 440.02(15)(a), Florida Statutes) of Respondent during the period of noncompliance listed on the penalty worksheet. From a description of the Respondent's business operations, Ms. Murcia determined Respondent's classification code. She explained that classification codes are established by the National Council of Compensation Insurance ("NCCI"). A classification code is a four-digit code number that is assigned to a specific group of tasks, duties, and responsibilities for a specific grouping of business. Ms. Murcia further testified that the classification codes are associated with a manual rate which is the actual dollar amount of risk associated with a particular code.3/ The manual rates are also established by NCCI. Class Code 8061, used on the penalty worksheet attached to the 3rd Amended Order of Penalty Assessment, and as defined by the NCCI Scopes Manual, is the correct occupational classification for Respondent. From the assigned classification code number, 8061, Ms. Murcia calculated the appropriate manual rate for the penalty period. The manual rates used on the penalty worksheet attached to the 3rd Amended Order of Penalty Assessment are the correct manual rates. The total penalty of $21,205.19 is the correct penalty for the employees listed on the penalty worksheet attached to the 3rd Amended Order of Penalty Assessment.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers' Compensation, enter a final order determining that Respondent Shriji Krupa, Inc., violated the requirement in chapter 440, Florida Statutes, to secure workers' compensation coverage, and imposing a total penalty assessment of $21,205.19. DONE AND ENTERED this 30th day of October, 2014, in Tallahassee, Leon County, Florida. S TODD P. RESAVAGE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of October, 2014.
Findings Of Fact 12. The factual allegations in the Stop-Work Order and Order of Penalty Assessment issued on February 17 2009, and the Third Amended Order of Penalty Assessment issued on September 4, 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. 09-042-D7, and being otherwise fully advised in the premises, hereby finds that: 1. On February 17, 2009, 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. 09-042-D7 to ROYMO, INC. The Stop-Work Order and Order of Penalty Assessment included a Notice of rights wherein ROYMO, INC. 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 February 17, 2009, the Stop-Work Order and Order of Penalty Assessment was served via personal service on ROYMO, INC. 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 February 25, 2009, the Department issued an Amended Order of Penalty Assessment to ROYMO, INC. in Case No. 09-042-D7. The Amended Order of Penalty Assessment assessed a total penalty of $61,692.98 against ROYMO, INC. The Amended Order of Penalty Assessment included a Notice of Rights wherein ROYMO, INC. 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. The Amended Order of Penalty Assessment was served on ROYMO, INC. by personal service on February 25, 2009. A copy of the Amended Order of Penalty Assessment is attached hereto as “Exhibit B” and incorporated herein by reference. 5. On March 10, 2009, ROYMO, INC. filed a timely Petition for a formal administrative hearing in accordance with Sections 120.569 and 120.57, Florida Statutes. The Petition was forwarded to the Division of Administrative Hearings and assigned Case No. 09- 1388. 6. On September 4, 2009, the Department issued a Third Amended Order of Penalty Assessment to ROYMO, INC. in Case No. 09-042-D7. The Third Amended Order of Penalty Assessment assessed a total penalty of $29,911.26 against ROYMO, INC. The Third Amended Order of Penalty Assessment was served on ROYMO, INC. through the Division of Administrative Hearings. A copy of the Third Amended Order of Penalty Assessment is attached hereto as “Exhibit C” and is incorporated herein by reference. 7. On November 6, 2009, ROYMO, INC. filed a Notice of Voluntary Dismissal in DOAH Case No. 09-1388. A copy of the Notice of Voluntary Dismissal filed by ROYMO, INC. is attached hereto as “Exhibit D.” 8. On November 9, 2009 Administrative Law Judge Daniel M. Kilbride entered an Order Closing File, relinquishing jurisdiction to the Department. A copy of the November 9, 2009 Order Closing File is attached hereto as “Exhibit E.”
Findings Of Fact The factual allegations contained in the Stop-Work Order and Order of Penalty Assessment issued on April 1, 2011, and the Amended Order of Penalty Assessment issued on April 19, 2011, 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 Jeff Atwater, Chief Financial Officer of the State of Florida, or his designee, having considered the record in this case, including the Stop-Work Order and Order of Penalty Assessment, and the Amended Order of Penalty Assessment, and being otherwise fully advised in the premises, hereby finds that: 1. On April 1, 2011, 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. 11-110-1A to LYNDA AGUAYO, DBA, LA FRAMING CONTRACTOR, INC., A DISSOLVED FLORIDA CORPORATION AND LA FRAMING CONTRACTOR, INC. The Stop-Work Order and Order of Penalty Assessment included a Notice of Rights wherein LYNDA AGUAYO, DBA, LA FRAMING CONTRACTOR, INC., A DISSOLVED FLORIDA CORPORATION AND LA FRAMING CONTRACTOR, INC 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 Section 120.569 and 120.57, Florida Statutes. 2. On April 1, 2011, the Stop-Work Order and Order of Penalty Assessment was personally served on LYNDA AGUAYO, DBA, LA FRAMING CONTRACTOR, INC., A DISSOLVED FLORIDA CORPORATION AND LA FRAMING CONTRACTOR, INC. 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 April 19, 2011, the Department issued an Amended Order of Penalty Assessment in Division of Workers’ Compensation Case No. 11-110-1A to LYNDA AGUAYO, DBA, LA FRAMING CONTRACTOR, INC., A DISSOLVED FLORIDA CORPORATION AND LA FRAMING CONTRACTOR, INC. The Amended Order of Penalty Assessment assessed a total penalty of $12,985.36 against LYNDA AGUAYO, DBA, LA FRAMING CONTRACTOR, INC., A DISSOLVED FLORIDA CORPORATION AND LA FRAMING CONTRACTOR, INC. 4. On April 29, 2011, the Amended Order of Penalty Assessment was. personally served on LYNDA AGUAYO, DBA, LA FRAMING CONTRACTOR, INC., A DISSOLVED FLORIDA CORPORATION AND LA FRAMING CONTRACTOR, INC. A copy of the Amended Order of Penalty Assessment is attached hereto as “Exhibit B” and incorporated herein by reference. 5. LYNDA AGUAYO, DBA, LA FRAMING CONTRACTOR, INC., A DISSOLVED FLORIDA CORPORATION AND LA FRAMING CONTRACTOR, INC failed to answer the Stop-Work Order and Order of Penalty Assessment and the Amended Order of Penalty Assessment or request a proceeding in accordance with Sections 120.569 and 120.57, Florida Statutes.
The Issue Has Respondent failed to secure payment of workers' compensation for his employees, Section 440.107(2), Florida Statutes (2005), justifying the entry of a stop-work order, Subsection 440.107(7)(a), Florida Statutes (2005), and the entry of a financial penalty against Respondent, Subsection 440.107(7)(d), Florida Statutes (2005), as imputed, Subsection 440.107(7)(e), Florida Statutes (2005)?
Findings Of Fact Michael Robinson is an investigator for Petitioner's Bureau of Compliance. His duties include job site visits to determine whether individuals on the site are employees, by whom those persons are employed and whether the employer has secured the payment of workers' compensation by obtaining necessary insurance coverage. Some site visits are made on a random basis. That was the case here. On August 11, 2005, Mr. Robinson went to an address in Lake City, Florida, referred to as 223 NW Sylvi Drive. There he observed three individuals laying sod in the yard of the private residence located at the address. Respondent, a fourth individual, was transporting sod from a trailer to the yard using equipment described as a Bobcat. The sod had been cut in squares and the squares were being matched and placed on the ground in the yard, where it was stepped on to secure it in the ground in a checker board pattern. Approximately three-quarters of the yard had sod placed. Mr. Robinson considered the activities on the site as involving a construction industry, with a classification, according to the National Council on Compensation, Inc. (NCCI), as class code 0042, landscape gardening and drivers, as reflected in Florida Administrative Code Rule 69L-6.021(1)(a). The NCCI classification codes for job descriptions were adopted by the rule. Mr. Robinson observed a permit board erected in the front yard of the property. There was no evidence that he saw which would indicate anyone was living in the home. The garage door was open. There was nothing in the garage. No blinds were on the windows. No evidence of any kind was observed that would indicate the house had been occupied. Altogether four persons were working at the site. Mr. Robinson interviewed each individual. After introducing himself, Mr. Robinson explained to Respondent the reason for the site visit and determined that Respondent was the employer for the other individuals, in addition to working on the job. Respondent told Mr. Robinson that he was a sub-contractor working for Earth Scapes, and had been hired to lay new sod in the yard. Respondent described his position as that of a sole proprietor. Respondent identified two of the other individuals as being his step-sons and the remaining individual was a family friend. Respondent explained that the basis for compensating the other employees was that Respondent "gave them running around money on Friday's." The other individuals indicated that they worked for Respondent part-time when he needed their help. To verify Respondent's statement that he was a sub- contractor assigned to the job, Mr. Robinson contacted the owner of Earth Scapes, who agreed with Respondent's recount of his assignment at the job location. Mr. Robinson was told Earth Scapes is a nursery that lays new sod and plants trees. Mr. Robinson inquired of Mr. Curry concerning workers' compensation coverage for the three employees. The answer was that Respondent did not have workers' compensation coverage through an insurance policy or through a leasing company or temporary labor service. Research into coverage and compliance through a Coverage and Compliance Automated System (CCAS) data base available to Petitioner did not reveal any information concerning Respondent and his business at 1259 SW County Road, 252-B, Lake City, Florida, that would relate to workers' compensation coverage. A similar search of a data base maintained by Petitioner in association with exemptions from the requirement to obtain workers' compensation coverage did not reveal any exemption for Respondent from the need for workers' compensation coverage. Having discovered the activity on the construction site in which work was done without workers' compensation coverage, Mr. Robinson discussed his findings with Robert Lambert, Petitioner's district supervisor in the Bureau of Compliance. Following that conversation Mr. Lambert authorized Mr. Robinson to issue a stop-work order to Respondent. A stop- work order was prepared on August 11, 2005. The stop-work order was served on Respondent on that date. The basis for its entry was the failure to secure payment of workers' compensation in violation of Section 440.107(2), Florida Statutes (2005), by failing to obtain coverage that would meet the requirements set forth in Chapter 440, Florida Statutes, and provisions of the Florida Insurance Code (the Insurance Code). On that same date, an Order of Penalty Assessment was served on Respondent under authority set for in Section 440.107(7)(d), Florida Statutes (2005). The Order of Penalty Assessment also reminded Respondent that the penalty might be amended based upon other information obtained, including the production of business records held by Respondent. These orders advised Respondent that he had the right to contest material facts in the stop-work order by filing a written petition for hearing under Sections 120.569 and 120.57, Florida Statutes (2005). On August 11, 2005, by a written document, Mr. Robinson requested production of business records maintained by Respondent that would assist in the calculation of a penalty assessment for the period August 11, 2002, through August 11, 2005, as contemplated by Section 440.107(7), Florida Statutes. The written request for production reminded Respondent that he must produce those records within five business days after receipt, to allow examination and copying, and that the failure to do so by quality of information sufficient to allow the determination of the payroll for the period in question, would allow the Petitioner to impute weekly payroll for the three employees and Respondent pursuant to the information derived using Section 440.12(2), Florida Statutes (2005), multiplied by 1.5. The document served on Respondent set out the various categories of information requested for production. These categories comport with Florida Administrative Code Rule 69L- 6.015. Respondent did not honor this request at any time.2/ Mr. Robinson not only provided the list of categories of information sought for production, he explained the categories found on the list to Respondent. Examples of information sought and explained included timesheets, time cards, payroll check stubs, check ledgers, income tax returns that would reflect the amount of remuneration paid or payable to each employee. On September 1, 2005, Mr. Robinson served Respondent with an Amended Order of Penalty Assessment that set forth an assessed penalty of $121,039.00, by imputation under Subsection 440.107(7)(d) and (e), Florida Statutes (2005), and by resort to Florida Administrative Code Rule 69L-6.028. That rule allows the imputation of payroll calculations after 15 business days following receipt by the employer of a written request to produce business records and the method will not be set aside after 45 days from receipt. The Amended Order of Penalty Assessment reminded Respondent that the stop-work order would remain in effect unless that order was released by Petitioner's further order. The necessary steps to set aside the stop-work order depended on obtaining coverage under the workers' compensation law and the payment of the penalty assessment. The approach for serving the Amended Order of Penalty Assessment was by certified mail return receipt requested. The receipt was returned following service. The Amended Order of Penalty Assessment provided the Respondent with the opportunity to dispute the material facts associated with the Amended Order of Penalty Assessment under procedures found in Sections 120.569 and 120.57, Florida Statutes (2005). As indicated, Respondent took advantage of the right to contest matters leading to the final hearing. The Amended Order of Penalty Assessment as set forth in Petitioner's Exhibit number six also reflects a worksheet that applies to the overall period in question. It demonstrates the calculations imputed related to Respondent, Tony Joe Brown, Collin Grimes, and Josh Grimes, persons on the job site when the random inspection took place on August 11, 2005. The calculations in the matrix for all parts, were in relation to the four workers under class code 0042, without the benefit of actual information provided by Respondent. The job class codes are derived from the Scopes Manual, an insurance industry publication.
Recommendation Upon the consideration of the facts found and the conclusions of law reached, it is RECOMMENDED: That a Final Order be entered keeping the stop-work order in effect pending Respondent's proof that he has obtained necessary workers' compensation coverage and the payment of the Amended Penalty Assessment in the amount of $121,039.00. DONE AND ENTERED this 28th day of June, 2006, in Tallahassee, Leon County, Florida. S CHARLES C. ADAMS 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 June, 2006.
The Issue The issues are whether, under section 440.107, Florida Statutes, Petitioner may calculate a penalty assessment for a failure to secure the payment of workers' compensation for one day as though the failure persisted over two years and whether Petitioner may calculate a penalty assessment based on double the statewide average weekly wage (AWW) when the lone uncovered employee earned $10 per hour.
Findings Of Fact Respondent was incorporated in 2008 by Ineido Soler, Sr., and his son, Ineido Soler, Jr. Since the corporation began operations, the wife of Mr. Soler, Jr., Idalmis Pedrero, has served as the office manager of this family-owned company. At all material times, Respondent has contracted with a personnel leasing company to handle employee matters, such as securing the payment of workers' compensation. Ms. Pedrero's responsibilities include informing the employee leasing company of new hires, so the company can obtain workers' compensation coverage, which typically starts the day following notification. On the afternoon of November 22, 2015, Mr. Soler, Jr., telephoned his wife and told her that he and his father had hired, at the rate of $10 per hour, a new employee, Geony Borrego Lee, who would start work the following morning. Customarily, Ms. Pedrero would immediately inform the employee leasing company. However, Ms. Pedrero was working at home because, six days earlier, she had delivered a baby by caesarian section, and she was still recuperating and tending to her newborn. A fatigued Ms. Pedrero did not notify the employee leasing company that day of the new hire. Late the next morning, Ms. Pedrero was awakened by a call from her husband, who asked her if she had faxed the necessary information to the employee leasing company. Ms. Pedrero admitted that she had not done so, but would do so right away. She faxed the information immediately, so that the employee leasing company could add Mr. Lee to the workers' compensation policy, effective the next day, November 24. Uncovered for November 23, Mr. Lee joined three other employees of Respondent and performed roofing work at a worksite. Late in the afternoon of November 23, one of Petitioner's investigators conducted a random inspection of Respondent's worksite and determined that Respondent had secured the payment of workers' compensation for the three other employees, but not for Mr. Lee. The investigator issued an SWO on the day of the inspection, November 23. The SWO contains three parts. First, the SWO orders Respondent to cease work anywhere in the state of Florida. Second, the SWO includes an Order of Penalty Assessment, which does not contain a specific penalty, but instead sets forth the formula by which Petitioner determines the amount of the penalty to assess. Tracking the statute discussed below, the formula included in the SWO is two times the premium that the employer would have paid when applying approved manual rates to the employer's payroll "during periods for which it has failed to secure the payment of compensation within the preceding 2-year period." Third, the SWO includes a Notice of Rights, which advises Respondent that it may request a chapter 120 hearing. On November 24, Petitioner released the SWO after Respondent had secured the payment of workers' compensation for Mr. Lee. On November 25, the investigator hand delivered to Respondent a Request for Production of Business Records for Penalty Assessment Calculation (Request). The Request covers November 24, 2013, through November 23, 2015, and demands records in eight categories: identification of employer, occupational licenses, payroll documents, account documents, disbursements, contracts for work, identification of subcontractors, and documentation of subcontractors' workers' compensation coverage. The Request identifies "payroll documents" as: all documents that reflect the payroll of the employer . . . including . . . time sheets, time cards, attendance records, earning records, check stubs and payroll summaries for both individual employees and aggregate records; [and] federal income tax documents and other documents reflecting the . . . remuneration paid or payable to each employee . . . . The Request adds: The employer may present for consideration in lieu of the requested records, proof of compliance with F.S. 440 by a workers' compensation policy or coverage through employee leasing for all periods of this request where such coverage existed. If the proof of compliance is verified by the Department the requested records for that time period will not be required. The Request warns: If the employer fails to provide the required business records sufficient to enable the . . . Division of Workers' Compensation to determine the employer's payroll for the period requested for the calculation of the penalty provided in section 440.107(7)(d), F.S., the imputed weekly payroll for each employee shall be the statewide average weekly wage as defined in section 440.12(2), F.S., multiplied by 2. The Department shall impute the employer's payroll at any time after ten, but before the expiration of twenty eight business days after receipt by the employer of [the Request]. (FAC 69L-6.028) . . . . On December 11, 2015, Respondent provided the following documents to Petitioner: itemized invoices, including for workers' compensation premiums, from the employee leasing company to Respondent and checks confirming payment, but the invoices and checks are from December 2011; an employee leasing agreement signed by Respondent on August 1, 2014, and signed by the employee leasing company on August 5, 2014; an employee leasing application for Mr. Lee dated November 23, 2015, showing his date of birth as November 20, 1996, his hourly pay as $10, and his hire date as November 23, 2015; and an employee census dated December 1, 2015, showing, for each employee, a date of hire and, if applicable, date of termination. Partially compliant with the Request, this production omitted any documentation of workers' compensation coverage prior to August 1, 2014, and any documentation of payroll except for Mr. Lee's rate of pay. On December 14, 2015, Respondent filed with Petitioner its request for a chapter 120 hearing. On December 30, 2016, Petitioner issued an Amended Order of Penalty Assessment (Amended Assessment), which proposes to assess a penalty of $63,434.48. On the same date, Petitioner transmitted the file to DOAH. Petitioner issued a Second Amended Order of Penalty Assessment on February 16, 2016, which is mentioned in, but not attached to, the Prehearing Stipulation that was filed on April 26, 2016, but the second amended assessment reportedly leaves the assessed penalty unchanged from the Amended Assessment. In determining the penalty assessment, Petitioner assigned class code 5551 from the National Council on Compensation Insurance because Mr. Lee was performing roofing work; determined that the entire two-year period covered in the Request was applicable; identified the AWW as $841.57 based on information provided by the Florida Department of Economic Opportunity for all employers subject to the Florida Reemployment Assistance Program Law, sections 443.01 et seq., Florida Statutes, for the four calendar quarters ending June 30, 2014; applied the appropriate manual rates for class code 5551 to $841.57, doubled, and divided the result by 100--all of which yielded a result of $31,717.24, which, doubled, results in a total penalty assessment of $63,434.48. There is no dispute that the classification code for Mr. Lee is code 5551, the AWW is $841.57, and the manual rates are 18.03 as of July 1, 2013, 18.62 as of January 1, 2014, and 17.48 as of January 1, 2015. Because Petitioner determined that Respondent had failed to provide sufficient evidence of its payroll, Petitioner calculated the penalty assessment by using the AWW of $841.57, doubled, instead of Mr. Lee's actual rate of $10 per hour. Petitioner's calculations are mathematically correct. For the 5.27 weeks of 2013, the penalty assessment is $3198.58 based on multiplying the AWW, doubled, by the manual rate of 18.03 divided by 100 multiplied by 2 and multiplied by 5.27. For the 52 weeks of 2014, the penalty assessment is $32,593.67 based on multiplying the AWW, doubled, by the manual rate of 18.62 divided by 100 multiplied by 2 and multiplied by 52. For the 46.44 weeks of 2015, the penalty assessment is $27,326.48 based on multiplying the AWW, doubled, by the manual rate of 17.48 divided by 100 multiplied by 2 and multiplied by 46.44. Adding these sums yields a total penalty assessment of $63,118.73, which approximates Petitioner's penalty assessment calculation of $63,434.48. (Mistranscription of difficult-to- read manual rates or a different rule for handling partial weeks may account for the small difference.) Respondent challenges two factors in the imputation formula: the two-year period of noncompliance for Mr. Lee instead of one day's noncompliance and the AWW, doubled, instead of Mr. Lee's $10 per hour rate of pay. Underscoring the differences between the two-year period of noncompliance and double the AWW and the actual period of noncompliance and Mr. Lee's real pay rate, at the start of the two-year period, Mr. Lee was three days past his 16th birthday and residing in Cuba, and Mr. Lee continues to earn $10 per hour as of the date of the hearing. The impact of Petitioner's use of the two-year period of noncompliance and double the AWW is significant. If the calculation were based on a single day, rather than two years, the assessed penalty would be less than the statutory minimum of $1000, which is described below, even if double the AWW were used. One day is 0.14 weeks, so the penalty assessment would be $82.38 based on multiplying the AWW, doubled, by the manual rate of 17.48 divided by 100 multiplied by 2 and multiplied by 0.14. If the calculation were based on the entire two years, rather than a single day, the assessed penalty would be about one-quarter of the proposed assessed penalty, if Mr. Lee's actual weekly rate of pay were used instead of double the AWW. Substituting $400 for twice the AWW in the calculations set forth in paragraph 15 above, the penalty would be $760.14 for 2013, $7746.92 for 2014, and $6494.17 for 2015 for a total of $15,001.23. Explaining why Petitioner treated one day of noncompliance as two years of noncompliance, one of Petitioner's witnesses referred to Mr. Lee as a "placeholder" because the real focus of the imputation formula is the employer. The same witness characterized the imputation formula as a "legal fiction," implying that the formula obviously and, in this case, dramatically departs from the much-smaller penalty that would result from calculating exactly how much premium that Respondent avoided by not covering the modestly paid Mr. Lee on his first day of work. Regardless of how Petitioner characterizes the imputation formula, the statutory mandate, as discussed below, is to determine the "periods" during which Respondent failed to secure workers' compensation insurance within the two-year period covered by the Request. The focus is necessarily on the employee found by the investigator to be uncovered and any other uncovered employees. Petitioner must calculate a penalty based on how long the employee found by the investigator on his inspection has been uncovered, determining how many other employees, if any, in the preceding two years have been uncovered, and calculating a penalty based on how long they were uncovered. There is evidence of one or two gaps in coverage during the relevant two years, but Petitioner has failed to prove such gaps by clear and convincing evidence. One of Petitioner's witnesses testified to a gap of one month "probably" from late January to late February 2015. This witness relied on Petitioner Exhibit 2, but it is completely illegible. Ms. Pedrero testified that Respondent had workers' compensation coverage since 2011, except for a gap, which she thought had occurred prior to August 2014, which is the start date of the current policy. This conflicting evidence does not establish by clear and convincing evidence any gap, and, even if a gap had been proved, no evidence establishes the number of uncovered employees, if any, during such a gap, nor would such a gap justify enlarging the period of noncompliance for Mr. Lee. Ms. Pedrero testified that her mother-in-law, Teresa Marquez cleaned the office and warehouse on an occasional basis, last having worked sometime in 2015. Respondent never secured workers' compensation coverage for Ms. Marquez, but she did no roofing work and appears to have been a casual worker, so her periods of employment during the two-year period covered by the Request would not constitute additional periods for which Respondent failed to secure workers' compensation insurance. Based on the foregoing, Petitioner has proved by clear and convincing evidence only a single day of noncompliance, November 23, concerning one employee, Mr. Lee, within the relevant two-year period for the purpose of calculating the penalty assessment. Likewise, Petitioner has proved by clear and convincing evidence a rate of pay of only $10 per hour for the purpose of calculating the penalty assessment. At no time has Respondent provided payroll records of all its employees for November 23, 2015. Respondent Exhibit E covers payroll for Respondent's employees for a two-week period commencing shortly after November 23, 2015. But the evidence establishes that Mr. Lee's rate of pay was $80 for the day, which, as discussed below, rebuts the statutory presumption of double the AWW.
Recommendation It is RECOMMENDED that the Department of Financial Services enter a final order determining that Respondent has failed to secure the payment of workers' compensation for one employee for one day within the two-year period covered by the Request and imposing an administrative penalty of $1000. DONE AND ENTERED this 19th day of July, 2016, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 19th day of July, 2016. COPIES FURNISHED: Jonathan Anthony Martin, Esquire Trevor S. Suter, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-4229 (eServed) Daniel R. Vega, Esquire Robert Paul Washington, Esquire Taylor Espino Vega & Touron, P.A. 2555 Ponce De Leon Boulevard, Suite 220 Coral Gables, Florida 33134 (eServed) Julie Jones, CP, FRP, Agency Clerk Division of Legal Services Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0390 (eServed)
The Issue The issues to be decided in this case are whether Respondents are liable for the violation charged in Petitioner's Notice of Violation, Orders for Corrective Action, and Administrative Penalty Assessment ("NOV"), whether Respondents should pay the penalties assessed in the NOV, and whether Respondents should be required to take the corrective actions demanded in the NOV.
Findings Of Fact 1. Petitioner is the state agency with the power and duty to protect Florida's air and water resources, including wetlands, pursuant to chapters 373 and 403. 2. Respondent Wanda Phillips owned the property located at 13285 Sweet Hill Road, Polk City, Polk County, Florida (“the site") during all times relevant to the charges brought by Petitioner. 3. The site includes wetlands, as defined in Florida Administrative Code Rule 62-340.200(19). 4. Sometime in 2010, Petitioner received a complaint about wetlands being filled on the site. Joseph Drumm, a biologist and Environmental Specialist employed by Petitioner, conducted an inspection of the site on July 20, 2010. 5. Based on aerial photographs, vegetative species in undisturbed areas, observations of soil in and around the disturbed area, hydrologic indicators, and ground elevations in the area, Mr. Drumm determined that approximately .35 acres of wetlands had been filled on the site. 6. On the same date, Mr. Drumm spoke with Respondent Patrick Phillips, who confirmed that fill was placed on the site and that he directed the filling with Wanda Phillip's knowledge and consent. 7. The filling was done sometime in 2007 and was for the purpose of meeting Polk County requirements related to the installation of a septic tank and drain field for a new single- family residence. 8. Respondents did not apply for or obtain a permit from Petitioner before filling the wetlands.
Conclusions Based on the foregoing Findings of Fact and Conclusions of Law, it is ORDERED that: 1. Within 30 days of this Final Order, Respondents shall pay $2,000 to Petitioner for the assessed penalties. The payment shall be made by cashier's check or money order payable to the “State of Florida Department of Bnvironmental Protection” and shall include thereon the OGC Case Number 11-0823 and the notation "Ecosystem Management and Restoration trust Fund." The payment shall be sent to the Department of Environmental Protection, Attn: David Brown, 13051 North Telecom Parkway, Temple Terrace, Florida 33637-0926. 2. Within 30 days of this Final Order, Respondents shall pay $1,000 to Petitioner for its investigative costs. The payment shall be made by cashier's check or money order payable to the “State of Florida Department of Environmental Protection” and shall include thereon the OGC Case Number 11-0823 and the notation “Ecosystem Management and Restoration Trust Fund." The payment shall be sent to the Department of Environmental Protection, Attn: David Brown, 13051 North Telecom Parkway, Temple Terrace, Florida 33637-0926. 3. Respondents shall comply with the Orders for Corrective Actions set forth in paragraphs 24 through 35 of the NOV, which are adopted by reference herein and made a part of this Final Order. All deadlines stated in the Orders for Corrective Action shall be calculated from the date of this Final Order. DONE AND ORDERED this 6th day of August, 2012, in Tallahassee, Leon County, Florida. Lawl sh BRAM D. E. CANTER 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 6th day of August, 2012. COPIES FURNISHED: Howard Evan Fox, Esquire Department of Environmental Protection Mail Station 35 . 3900 Commonwealth Boulevard Tallahassee, Florida 32399 howard. foxédep.state.fl.us Wanda Phillips Patrick Phillips Post Office Box 1313 Davenport, Florida 33836 Herschel T. Vinyard, Jr., Secretary Department of Environmental Protection Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Tom Beason, General Counsel Department of Environmental Protection Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Lea Crandall, Agency Clerk Department of Environmental Protection Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review pursuant to section 120.68, Florida ‘Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing the original notice of administrative appeal with the agency clerk of the Division of Administrative Hearings within 30 days of rendition of the order to be reviewed, and a copy of the notice, accompanied by any filing fees prescribed by law, with the clerk of the District Court of Appeal in the appellate district where the agency maintains its headquarters or where a party resides or as otherwise provided by law.
