WRAPS UP WORKERS’ COMPENSATION COMPLIANCE SWEEP
June 18, 2004 State of Florida Press Release
Financial Officer Tom Gallagher announced the completion of a sweep of
construction sites across Florida to verify that employers are
complying with state workers’ compensation insurance laws. As part of
the statewide effort, investigators with the Department of Financial
Service’s Division of Workers’ Compensation made random site visits,
ordering dozens of employers to stop work because employees were not
properly covered by workers’ compensation insurance.
“Employers who avoid paying workers’ compensation premiums contribute
to the rise in workers’ compensation rates and gain an unfair advantage
over competitors,” said Gallagher. “A healthy workers’ compensation
system is crucial to Florida’s economy, and we will continue to
aggressively investigate instances of fraud and abuse.”
During the sweep, investigators issued several dozen Stop Work Orders
(SWOs) to construction businesses, including general contractors and
sub-contractors, who are in violation of Florida’s workers’
compensation requirements. Under state law, businesses engaged in the
construction industry with one or more employees must provide workers’
compensation coverage, which protects workers who are injured or killed
on the job.
Under an SWO, a business must immediately cease all business
operations. The SWO is lifted once the employer obtains the proper
coverage and pays a civil penalty equal to the amount of 1.5 times the
workers’ compensation premiums avoided. Employers who violate a Stop
Work Order face a penalty of $1,000 per day of violation and may also
face criminal charges.
During the 2003 legislative session, lawmakers made several important
reforms to the workers’ compensation system in an effort to stem the
tide of rising premiums. As part of the reforms, the Division of
Workers’ Compensation was granted greater enforcement authority to
ensure businesses provide coverage for their employees. Many of the
violations uncovered during this week’s sweep fall under the new
To increase competition among businesses operating in Florida, the
Legislature in 2003 required that:
businesses operating in Florida must pay Florida-approved workers’
compensation rates for coverage. This prevents non-Florida businesses
from gaining an unfair advantage over locally-owned businesses.
- Employers who misrepresent the number or
classification of their employees be subject to an immediate Stop Work
Order. Previously, a criminal investigation was required to take action
against the employer.
- Employers wishing to exempt themselves
from coverage requirements obtain a new exemption, providing greater
tracking ability to state regulators. This measure was aimed at
preventing contractors from claiming that employees were subcontractors
who were exempt from coverage, thereby avoiding payment of premiums and
gaining an unfair advantage over competition.
workers deserve to be protected in case they are injured on the job,”
Gallagher said. “An employee without coverage who is seriously injured
or disabled stands to lose not only his livelihood but also the
benefits he needs for medical bills and recovery.”
Below are examples of Stop Work Orders issued this week. Statewide,
investigators made contact with over 900 businesses, including
subcontractors, and issued more than 75 SWOs. Final information,
including penalty amounts, will be available after investigators review
submitted business records.
In Naples, investigators visited a residential construction site where
a concrete subcontractor was using 11 employees. A
check of the employer’s
policy revealed that only four employees were covered by workers’
compensation insurance. Had one of the non-covered employees suffered
an injury, he could have faced no benefits.
On a visit to a beachfront condominium construction site in Panama
City, investigators shut down two subcontractors for failing to secure
the proper coverage. One of the subcontractors had purchased coverage
but with employees classified as janitorial workers. Investigators
observed the employees performing construction-related tasks on the
third floor of the unfinished condominium.
At a Pasco County residential construction site, investigators
discovered a carpentry subcontractor with five employees who had no
coverage. Investigators also cited the general contractor for failing
to ensure that all subcontractors appropriately insured their employees.
Talk to an experienced staff member
or have them contact you
a quote or discussion about getting immediate
compliance for your company!