Do You Know the Rule? Fla. Failure to Secure Workers’ Compensation

Clearwater, FL (WorkersCompensation.com) -- In Florida, employers that fail to secure the payment of compensation, as provided in s. 440.10, by failing to meet the requirements of 440.38 may not, in any suit brought against them by an employee to recover damages for injury or death, defend such a suit on the grounds that the injury was caused by the negligence of a fellow servant, that the employee assumed the risk of his or her employment, or that the injury was due to the comparative negligence of the employee.

The Florida Division of Workers' Compensation is responsible for enforcing employer compliance with the coverage requirements of the workers' compensation law. Compliance investigators have the authority to enter and inspect any place of business for purposes of ensuring employer compliance with workers' compensation law. Investigators can also request an employer's business records. An employer must produce the required business records within five business days of receiving the Division's written request for records.

Stop Work Orders (FS 440.107(7)(a))

Whenever the department determines that an employer failed to secure the workers' compensation coverage required, the failure is considered an immediate serious danger to public health, safety, or welfare sufficient to justify service by the department of a stop-work order on the employer, requiring the cessation of all business operations. If the department makes this determination, the department will issue a stop-work order within 72 hours.

A Stop-Work Order can be issued when an employer who is required to secure Florida workers' compensation coverage fails to do so; when the employer fails to provide records requested by the Division of Workers' Compensation within 10 business days when an employer understates or conceals payroll, misrepresents or conceals employee duties or fails to utilize Florida's class codes and workers' compensation rates.

Workers' Comp 101: In Riopelle v. Department of Financial Services, 907 So. 2d 1220 (Fla. Dist. Ct. App. 2005), an appellate court rejected an employer's claim that Stop Work Orders violate the due-process clause of the 14th Amendment of the United States Constitution. According to the court, the right to due process does not require a hearing before possession of property is disturbed, but that a “full and immediate” hearing must be made available “before one is finally deprived of his property.” Additionally, the administrative law judge advised the employer that she had the right to request an expedited, summary hearing.

If an employer conducts business operations in violation of a stop-work order, the employer may be assessed an additional penalty of $1,000 per day for each day of violation.

A Stop-Work Order may be released when an employer provides proof of compliance and pays the assessed monetary penalty, or pays the required down payment and enters into a payment agreement with the Division. The down payment is a penalty of $1000.

Penalties (FS 440.107(7)(d)(1))

The penalty is based on the insurance premiums that should have been paid, but were not (evaded premium), multiplied by 2 for the prior 2 years or $1,000, whichever is greater.

Share This Article: