Amendment to 69L-6.027, 028, and 035 effective April 12, 2015

On April 12, 2015, the Division of Workers' Compensation adopted changes to Rule 69L-6.027, 69L-6.028 and 69L-6.035. The Rules now read:

69L-6.027 Penalty Calculation Worksheet.

(1) For purposes of calculating penalties to be assessed against employers pursuant to Section 440.107, F.S., the Division shall use Form DFS-F4-1595 http://www.flrules.org/Gateway/reference.asp?No=Ref-05165, Penalty Calculation Worksheet, revised 7/14, which is incorporated herein by reference.

(2) Copies of Form DFS-F4-1595, Penalty Calculation Worksheet, revised 7/14, are available from the Division of Workers’ Compensation, Department of Financial Services, Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-4226.

Rulemaking Authority 440.107(9), 440.591 FS. Law Implemented 440.107(7) FS. History–New 12-29-04, Amended 10-18-07, 4-12-15.

69L-6.028 Procedures for Imputing Payroll and Penalty Calculations.

(1) In the event an employer fails to provide business records sufficient for the department to determine the employer’s payroll for the time period requested in the business records request for the calculation of the penalty pursuant to Section 440.107(7)(e), F.S., the department shall impute the employer’s payroll at any time after ten, but before the expiration of twenty-eightbusiness days after receipt by the employer of a written request to produce such business records.

(2) The employer’s period of non-compliance shall be either the same as the time period requested in the business records request for the calculation of penalty or an alternative period of non-compliance as determined by the department, whichever is less. The department shall determine an alternative period of non-compliance by obtaining records from other sources, including, but not limited to, the Department of State, Division of Corporations, the Department of Business and Professional Regulation, licensing offices, building permitting offices and contracts, that evidence a period of non-compliance different than the time period requested in the business records request for the calculation of penalty. For purposes of this rule, “non-compliance” means the employer’s failure to secure the payment of workers’ compensation pursuant to Chapter 440, F.S.

(3) When an employer fails to provide business records sufficient to enable the department to determine the employer’s payroll for the time period requested in the business records request for purposes of calculating the penalty provided for in Section 440.107(7)(d), F.S., the imputed weekly payroll for each employee, corporate officer, sole proprietor or partner shall be calculated as follows:

(a) For each employee, other than corporate officers, identified by the department as an employee of such employer at any time during the period of the employer’s non-compliance, the imputed weekly payroll for each week of the employer’s non-compliance for each such employee shall be the statewide average weekly wage as defined in Section 440.12(2), F.S., that is in effect at the time the stop-work order was issued to the employer, multiplied by 2. Employees include sole proprietors and partners in a partnership.

(b) If the employer is a corporation, for each corporate officer of such employer identified as such on the records of the Division of Corporations at the time of issuance of the stop-work order, the imputed weekly payroll for each week of the employer’s non-compliance for each such corporate officer shall be the statewide average weekly wage as defined in Section 440.12(2), F.S., that is in effect at the time the stop-work order was issued to the employer, multiplied by 2.

(c) If a portion of the period of non-compliance includes a partial week of non-compliance, the imputed weekly payroll for such partial week of non-compliance shall be prorated from the imputed weekly payroll for a full week.

(d) The imputed weekly payroll for each employee, corporate officer, sole proprietor, or partner shall be assigned to the highest rated workers’ compensation classification code for an employee based upon records or the investigator’s physical observation of that employee’s activities.

(4) If the department imputes the employer’s payroll, the employer shall have twenty business days after service of the first amended order of penalty assessment to provide business records sufficient for the department to determine the employer’s payroll for the period requested in the business records request for the calculation of the penalty or for the alternative period of non-compliance. The employer’s penalty will be recalculated pursuant to Section 440.107(7)(d), F.S., only if the employer provides all such business records within the twenty days after the service of the first amended order of penalty assessment. Otherwise, the first amended order of penalty assessment will remain in effect.

Rulemaking Authority 440.107(9), 440.591 FS. Law Implemented 440.107(7)(e) FS. History–New 7-12-05, Amended 8-31-06, 8-30-09, 4-12-15.

69L-6.035 Definition of Payroll for Calculating Penalty.

(1) For purposes of determining payroll for calculating a penalty pursuant to Section 440.107(7)(d)1., F.S., the Department shall when applicable include any one or more of the following as remuneration to employees based upon evidence received in its investigation:

(a) Wages or salaries paid to employees by or on behalf of the employer;

(b) Payments, including cash payments, made to employees by or on behalf of the employer;

(c) Payments, including cash payments, made to a third person or party by or on behalf of the employer for services provided to the employer by the employees;

(d) Bonuses paid to employees by or on behalf of the employer;

(e) Payments made to employees by or on behalf of the employer on any basis other than time worked, such as piecework, profit sharing, dividends, income distributions, or incentive plans;

(f) Expense reimbursements made to employees by or on behalf of the employer, to the extent that the employer’s business records do not confirm that the expense was incurred as a valid business expense;

(g) Loans made to employees by or on behalf of the employer to the extent that such loans have not been repaid to the employer;

(h) Payments or allowances made by or on behalf of the employer to employees for tools or equipment used by employees in their work or operations for the employer, even in cases where the tools are supplied directly by the employee or to the employee through a third party;

(i) Total contract price of a service provided by the employer, excluding the cost for materials as evidenced in the employer’s business records or contract. In the event the costs for materials is included in the total contract price and cannot be separately identified in the total contract price, eighty percent of the total contract price shall be the employer’s payroll; and

(j) Income listed in “Form 1099 Miscellaneous Income” issued to a person, excluding the cost of materials as evidenced by business records from the person to whom the Form 1099 Miscellaneous Income was issued. In the event such records are not provided to the Department to determine the cost of such materials, the entire amount of the income listed on the “Form 1099 Miscellaneous Income” shall be included in the employer’s payroll.

(2) For the purposes of calculating a penalty pursuant to Section 440.107(7)(d)1., F.S., payroll for an officer of a corporation as defined in Section 440.02(9), F.S., shall be based on remuneration factors listed in paragraphs (1)(a) through (j) of this rule where applicable, or the state average weekly wage as defined in Section 440.12(2), F.S., that is in effect at the time the stop-work order was issued to the employer, multiplied by 2, whichever is less.

(3) For purposes of calculating a penalty pursuant to Section 440.107(7)(d)1., F.S., payroll for a sole proprietor or partner shall be based on remuneration factors listed in paragraphs (1)(a) through (j) of this rule where applicable, or the state average weekly wage as defined in Section 440.12(2), F.S., that is in effect at the time the stop-work order was issued to the employer, multiplied by 2, whichever is less.

Rulemaking Authority 440.107(9), 440.591 FS. Law Implemented 440.107(7)(d)1. FS. History–New 10-10-07, Amended 4-12-15.