16-001986 Department Of Financial Services, Division Of Workers&Apos; Compensation vs. Donald Kehr, D/B/A Jnk Framing, Inc., A Dissolved Florida Corporation Status: Closed Recommended Order on Wednesday, August 10, 2016.

Summary: The Division failed to prove that two of the employees at issue worked for Respondent for more than one day.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL

SERVICES, DIVISION OF WORKERS'

COMPENSATION,

Petitioner,

vs. Case No. 16 - 1986

DONALD KEHR, d/b/a JNK FRAMING,

INC., A DISSOLVED FLORIDA

CORPORATION,

Respondent.

__________________ _____________/

RECOMMENDED ORDER

Pursuant to notice, a final hearing was conducted in this

case on June 27, 2016, via video teleconference in Daytona Beach

and Tallahassee, Florida, before Garnett W. Chisenhall, a duly -

designate d Administrative Law Judge of the Division of

Administrative Hearings (ÐDOAHÑ) .

APPEARANCES

For Petitioner: Joaquin Alvarez, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 4229

For Respondent: Donald Kehr , pro se

Donald Kehr, d/b/a JNK Framing, Inc.

Apartment 1

5160 South Ridgewood Avenue

Port Orange, Florida 32127

STATEMENT OF THE ISSUE

The issue in this case is whether Respondent had a

sufficient amount of workersÓ compensation coverage during the

time period in question ; and, if not, what penalty should be

imposed.

PRELIMINARY STATEMENT

On December 10, 2015, the Department of Financia l Services,

Division of WorkersÓ Compensation (Ðthe D ivision Ñ) , served a

Stop - Work Order and Order of Penalty Assessment on Donald Kehr,

d/b/a JNK Framing Inc., a d issolved Florida c orporation.

(ÐJNKÑ).

The D ivision served an Amended Order of Penalty As sessment

on January 19, 2016, requiring JNK to pay a $61,424.04 penalty.

Donald Kehr (acting on JNKÓs behalf) requested an

administrative hearing, and the D ivision referred this matter to

DOAH on April 12, 2016.

The f inal hearing was commenced as sched uled on June 27,

2016. The D ivision presented the testimony of Investigator Kent

Howe and Penalty Auditor Phillip Sley. In addition, the

D ivision offered Exhibits 1 through 9 that were admitted into

evidence without objection . Mr. Kehr testified on JNKÓ s behalf

and offered no exhibits.

A one - volume T ranscript was filed with DOAH on July 6 ,

2016.

The D ivision submitted a timely Proposed Recommended Order

on July 18, 2016 , that was considered in the preparation of this

Recommended Order .

JNK submitted an untimely Pro posed Recommended Order on

July 20, 2016. Because the D ivision would not be prejudiced,

the undersigned considered JNKÓs Proposed Recommended Order in

the preparat ion of this Recommended Order.

FINDING S OF FACT

1. The D ivision is the state agency responsible for

enforcing the requirement in chapter 440 , Florida Statutes

(2015) , 1/ that employers in Florida secure workersÓ compensation

coverage for their employees.

2 . While an exemption can be obtained for up to three

corporate officers, a ny employer in the construction industry

with at least one employee must have workersÓ compensation

coverage. § 440.02(15), Fla. Stat.

3. Kent Howe works for the D ivision as a compliance

investigator based in Orlando, Florida. As part of his job

resp onsibilities, Mr. Howe visits construction sites in order to

verify that employers in the construction industry have obtained

workers Ó compensation coverage for their employees.

4. Mr. Kehr was the owner and sole corporate officer of

JNK .

5. Mr. Howe visited a construction site in Port Orange ,

Florida , on the morning of December 10, 2015 , and saw Mr. Kehr

and two other men building the interior walls /frames of a ho use .

6 . Mr. Howe talked to the two men (James Hicks and James

Garthwait) working with M r. K ehr, and they reported that

Mr. Kehr was paying them approximately $8.00 an hour.

7 . M r. Kehr told Mr. Howe that Messrs. Hicks and Garthwait

had been working for him for approximately two hours that

morning . Mr. Kehr also stated that he had not obtai ned workersÓ

compensation coverage fo r Messrs. Hicks and Garthwait.

8 . Following those conversations, Mr. Howe returned to his

ca r and accessed the D ivision Ós Coverage and Compliance

Automated System ( Ð CCAS Ñ ) and learned that JNK had no workersÓ

compens ation coverage.

9 . Mr. Howe also determined from CCAS that Mr. Kehr had

obtained an exemption from workersÓ compensation coverage that

had been in effect from November 18, 2014 , through November of

2016. 2/

10. After relaying that inf ormation to his s upervisor,

Mr. Howe received authorization to serve Mr. Kehr with a Stop -

Work Order, and he did so on December 10, 2015.

11 . That Stop - Work Order required JNK to Ðcease all

business operations for all worksites in the StateÑ based on the

D ivision Ós dete rmination that JNK had failed to obtain workersÓ

compensation coverage.

1 2 . In addition, the Stop - Work Order stated that JNK would

be penalized an amount Ð[e]qual to 2 times the amount [JNK]

would have paid in premium when applying approved manual rates

to the employerÓs payroll during periods for which it [had]

failed to secure the payment of compensation within the

preceding 2 - year period.Ñ

1 3 . Along with the Stop - Work Order, Mr. Howe also served a

ÐRequest for Production of Business Records for Pen alty

Assessment CalculationÑ ( Ð the BRR Ñ ) on Mr. Kehr . In order to

ascertain JNKÓs payroll disbursements during the relevant time

period and the resulting penalty for JNKÓs failure to obtain

workersÓ compensation coverage, the BRR requested that JNK remit

several different types of business records covering the period

from November 1 0 , 2014 , through December 10, 2015.

14. Mr. Howe explained during the final hearing that the

Division usually reviews business records pertaining to the two

year s preceding t he Stop Work Order. 3/ B ecause JNK came into

existence on N ovember 10, 2014, the Division Ós review was limited

to examin ing the period between November 10, 2014, and

December 10, 2015.

15. The business records sought by the D ivision included

items such as time sheets, payroll summaries, check journals,

certificates of exemption, and evidence that any JNK

subcontractors had obtained workersÓ compensation coverage.

1 6 . Section 440.107(7)(e) provides that if an employer

fail s to provide business records s ufficient to enable the

Department to ascertain the employerÓs actual payroll for the

time period in question, then the D ivision w ill estimate the

employerÓs actual payroll for that time period by imput ing the

employerÓs payroll based on the statewide aver age weekly wage .

The Division then multiplie s that amount by two.

1 7 . JNK did not provide business records typically sought

by the Division . Instead, JNK responded to the BRR by produc ing

a written statement from Mr. Kehr indicating that he founded JNK

i n November of 2014 , but did no work until July of 2015. That

initial job involved fixing a set of stairs for $200.

Afterwards, Mr. Kehr performed three separate small jobs between

July and November of 2015, earn ing approximately $ 5 50 .

18. Because the Division could not ascertain JNKÓs actual

payroll from the documentation provided by JNK, the Division

imputed JNKÓs payroll for the time period in question and issued

an Amended Order of Penalty Assessment on January 19, 2016,

seeking to impose a penalty of $61,424.04.

1 9 . Phillip Sley calculated the aforementioned penalty

amount by filling out a worksheet that has been adopted by the

D ivisi o n through Florida Administrative Code Rule 69L - 6.027.

20. The first step in completing the worksheet required

Mr. Sley to assign a classification co de to the type of work that

Mr. Howe witnessed Messrs. Kehr, Hicks and Garthwait perform ing

at the Port Orange worksite on December 10, 2015.

21. Classification codes come from the Scopes® Manual,

which has been ado pted by the Department through r ule 69L - 6.021.

22. Each code within the Scopes® Manual pertain s to an

occupation or type of work, and each code has an approved manual

rate used by insurance companies to assist in the calculation of

workersÓ compensation insurance premiums. The imputed weekly

payroll for each employee and corporate officer Ðshall be

assigned to the highest rated workersÓ compensation

classification code for an employee based upon records or the

investigatorÓs physical observation of that employeeÓs

activities.Ñ See Fla. Admin. Code. R. 69L - 6.028(3)(d).

2 3 . In the instant case, Mr. Sley determined Ð5645Ñ was the

appropriate classification code. According to the Scopes Manual,

[w]hen al l of the carpentry work in

connection with the co nstruction of

residential dwellings not exceeding three

stories in height is performed by employees

of the same carpentry contractor or general

contractor responsible for the entire

dwelling construction project, the work is

assigned to Code 5645. This in cludes the

construction of the sill, rough framework,

rough floor, wood or light - gauge steel studs,

wood or lighted - gauge steel joists, rafters,

roof deck, all types of roofing materials,

sidewall sheathing, siding, doors, wallboard

installation, lathing, windows, stairs,

finished flooring, cabinet installation,

fencing, detached structure s, and all

interior wood trim.

2 4 . Mr. Sle y Ós next step in calculating the penalty amount

was to determine the period of non - compliance. With regard to

Mr. Kehr, the Department asserted that JNK failed to have

workersÓ compensation coverage between the date of JNKÓs

inception (November 10, 2014) and the date that Mr. Kehr

received an exemption from the workersÓ compensation coverage

requirement ( November 1 8 , 2014 ) .

2 5 . Despite having no evidence that Messrs. Hicks and

Garthwait worked for JNK on any day other than December 10,

2015 , the DivisionÓs penalty calculation was based on an

assumption that Messrs. Hicks and Garthwait worked for JNK from

November 10, 2014, th rough December 10, 2015.

2 6 . Mr. Sle y Ós next step was to calculate JNKÓs gross

payroll for the time period in question. Because JNK did not

provide the Division with business records that would have

enabled the Division to calculate JNKÓs actual payroll , Mr. Sle y

based JNKÓs payroll on the statewide average weekly wage

determined by the Department of Economic Opportunity for the

time period in question. 4 / Mr. Sle y then multiplied that amount

by two . 5 /

2 7 . After converting the payroll numbers into a

p ercentage, Mr. Sle y multiplied the payroll amounts by the

approved manual rate .

2 8 . As noted above, every classification code is associated

with a particular manual rate determined by the Office of

Insurance Regulation , and a manual rate corresponds to the risk

associated with a particular occupation or type of work. Manual

rates associated with potentially dangerous activities will have

higher manual rates than activities with little or no potential

danger.

29. Mr. Sle y Ós next step was to calculate a premium for

obtaining workers compensation coverage for Messrs. Kehr, Hicks,

and Garthwait. Mr. Sle y then multiplied that p remium by two in

order to calculate the individual penalties resulting from JNK

not having workersÓ compensation coverage for Messr s. Kehr,

Hicks, and Garthwait. The sum of those amounts was $61,424.04.

30. The evidence produced at the final hearing established

that Mr. Sley utilized the correct class code, average weekly

wage, and manual rates in his calculation of the penalty se t

forth in the Amended Order of Penalty Assessment.

31. The Division has demonstrated by clear and convincing

evidence that JNK was in violation of the workersÓ compensation

coverage requirements of chapter 440. In particular, the

Division proved by clea r and convincing evidence that Mr. Kehr

had no workersÓ compensation coverage for himself and no

exemption from November 1 0 , 2014, through November 17, 2014.

32. However, the Division did not demonstrate by clear and

convincing evidence that Messrs. Hic ks and Garthwait were

employees of JNK on any day other than December 10, 2015.

33. Mr. Kehr testified during the final hearing that

Messrs. Hicks and Garthwait were working for him on December 10,

2015. He also testified that he was paying them at a r ate of

$8.00 an hour.

3 4 . However, Mr. Kehr persuasively testified that

Messrs. Hicks and Garthwait had not worked for him at any other

time between November 10, 2014, and December 10, 2015.

3 5 . The undersigned finds Mr. KehrÓs testimony on this

point to be credible.

36. Messrs. Hicks and Garthwait did not testify during the

final hearing in this matter.

3 7 . There is no evidence that Messrs. Hicks and Garthwait

worked for JNK at any time other than December 10, 2015.

3 8 . Because there is no evidenc e indicating that

Messrs. Hicks and Garthwait were employees of JNK at any time

other than December 10, 2015, during the time period in

question, the undersigned finds that the Department failed to

carry its burden of proving that $61,424. 04 is the appropr iate

penalty.

3 9 . Based on the above findings, the undersigned finds

that the correct penalty resulting from Mr. KehrÓs lack of

coverage is $627.48. The worksheet completed by Mr. Sle y

indicates that is the amount of the $61,424.04 penalty

associated w ith Mr. KehrÓs lack of coverage.

40 . As for the penalt ies associated with the lack of

coverage for Messrs. Hicks and Garthwait on December 10, 2015,

the undersigned multiplied the average weekly wage utilized by

the Division ($841.57) by two . That resu lts in a weekly gross

payroll amount of $1,683.14. Dividing $1,683.14 by five results

in a daily gross payroll amount of $336.63. Dividing $336.63 by

100 and then multiplying the result by 15.91 (the approved

manual rate utilized by the Divis ion for the period from

January 1, 2015 , through December 10, 2015) yields a daily

premium of $53.62. Multiplying $53.62 by two results in a

penalt y of $107.23. M ultiplying $107.23 by two yields $214.46,

JNKÓs penalty for not having workersÓ compensation coverage fo r

Messrs. Hicks and Garthwait on December 10, 2015.

4 1 . JNKÓs total penalty is $841.94. Because section

440.107(7)(d)1. mandates a minimum penalty of $1,000, the

undersigned finds that $1,000 is the correct penalty for the

instant case.

CONCLUSIONS O F LAW

4 2 . The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding pursuant to s ection s 120.569 and 120.57(1), Florida

Statutes.

4 3 . B ecause the Division seeks to impose an administrative

pena lty or fine against JNK , the Division has the burden of

proving the material allegations by clear and convincing

evidence. Dep't of Banking & Fin. v. Osborne Stern & Co. ,

670 So. 2d 932, 935 (Fla. 1996). Clear and convincing evidence

must make the facts "highly probable" and produce in the mind of

the trier of fact "a firm belief or conviction as to the truth

of the facts sought to be established," leaving "no substantial

doubt." Slomowitz v. Walker , 429 So. 2d 797, 799 (Fla. 4th DCA

1983).

4 4 . Pursuant to s ections 440.10 and 440.38, every employer

is required to secure the payment of workers' compensation for

the benefit of its employees, unless the employee is exempted or

excluded under c hapter 440. S ee C & L Trucking v. Corbitt ,

546 So. 2d 1185, 1187 (Fla. 5th DCA 1989).

4 5 . S ection 440.107(7)(a) states, in relevant part:

Whenever the department determines that an

employer who is required to secure the

payment to his or her employees of the

compensation provided for by this chapter

has failed to sec ure the payment of workers'

compensation required by this chapter . . .

such failure shall be deemed 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, requ iring the cessation of all

business operations. If the department

makes such a determination, the department

shall issue a stop - wo rk order within

72 hours.

4 6 . "Employee" is defined in section 440.02(15) as:

[A]ny person who receives remuneration fr om

an employer for the performance of any work

or service while engaged in any employment

under any appointment or contract for hire

or apprenticeship, express or implied, oral

or written, whether lawfully or unlawfully

employed, and includes, but is not l imited

to, aliens and minors.

4 7 . The Division enforces the requirement that an employer

secure the payment of workers' compensation. § 440.107(3) , Fla.

Stat . The Division is authorized to order the production of

business records, section 440.107(3)(f) and (5), and to issue

penalty assessment orders. § 440.107(3)(g) , Fla. Stat . The

Division is authorized to issue a S top - W ork O rder when it

determines that an employer has failed to secure the payment of

workers' compensation or has failed to produce bus iness records

within ten bu siness days after receipt of a r equest.

§ 440.107(7)(a) , Fla . Stat . The Division is required to release

a Stop - Work O rder when an employer complies with the coverage

requirements, apparently even though an independent reason fo r

issuing a Stop - Work O rder -- the failure to produce business

records -- may persist or emerge after coverage is secured. Id.

However, the Division has the power to subpoena business

records, and a court may punish noncompliance with the

Division 's subpoena by civil or criminal contempt.

§ 440.107(6), Fla. Stat.

4 8 . The Division is required to assess against any

employer that has failed to secure the payment of workers'

compensation "a penalty equal to" the greater of $1 , 000 or

"2 times the amount the empl oyer would have paid in premium when

applying approved manual rates to the employer's payroll during

periods for which it failed to secure the payment of workers'

compensation . . . within the preceding 2 - year period ."

(emphasis add ed). § 440.107(7)(d)1 , Fla. Stat . This is a penal

statute that, if ambiguous, must be construed against

Petitioner. See , e.g. , Osborne Stern , supra ; and Lester v.

Dep't of Prof'l & Occ . Reg . , 348 So. 2d 923, 925 (Fla. 1st DCA

1977).

4 9 . The Division has adopted a rule that provides for a

shorter alternative period to a two - year period of

noncompliance . R ule 69L - 6.028(2) states:

The employerÓs period of non - compliance

shall be either the same as the time period

requested in the business records request

for the calculation o f 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

Dep artment of State, Division of

Corporations, the Department of Business and

Professional Regulation, licensing offices,

building permitting offices and contracts,

that evidence a period of noncompliance

different than the time period requested in

the busine ss records request for the

calculation of penalty.

50 . As noted above, the Division proved that M essrs. Hicks

and Garthwait were employees of JNK on no day other than

December 10, 2015 , and the penalty associated with the lack of

coverage for Messrs. Hic ks and Garthwait should be based only on

December 10, 2015, rather than November 10, 2014, through

December 10, 2015 . This conclusion is consistent with the

results reached in previous DOAH cases. See Rex Neil, Inc. v.

DepÓt of Fin. S er v ., Div. of Worker sÓ Comp. , Case No. 08 -

4129 (Fla. DOAH Nov. 21, 2008; Fla. DFS Dec. 29,

2008) ( determining that a penalty be reduced from $21,690.61 to

$223.80 after concluding that the Division only established that

the employee in question had been employed for one day) ; DepÓt

of Fin. Serv. v. George Washington Beatty, III , Case No. 15 - 3653

(Fla. DOAH July 6, 2016 ; final order pending)(finding that the

Division Ðdid not demonstrate by clear and convincing evidence

that Tommy Mahone, Dennis Deal, and Michae l Leneave were

em ployees of Mr. Beatty on September 8, 2014. Th ere is direct

evidence that Mr. Woodall saw the men working in the house, but

the only evidence as to whether or how they were being paid are

the hearsay statements of the three men as relayed by

Mr. Woodall. The men were not available for cross - examination;

their purported statements to Mr. Woodall could not be tested in

an adversarial fashion. Mr. BeattyÓs testimony that the men

were not working for him and that he was merely supervising

their work as a fav or to Mr. Daffin is the only sworn,

admissible evidence before th is tribunal on that point.

Mr. Beatty was adamant in maintaining that he did not hire the

men, and his testimony raises sufficient ambiguity in the mind

of the factfinder to preclude a findi ng that Messrs. Mahone,

Deal, and Leneave were his employees.Ñ).

5 1 . However, the Division argues in its Proposed

Recommended Order that it should be presumed that Messrs. Hicks

and Garthwait worked for JNK from November 10, 2014 , through

December 10, 2 015:

The [Division] properly identified

RespondentÓs period of non - compliance as the

period requested in the Business Records

Request, pursuant to Fla. Admin. Code. R.

69L - 6.028(2) (ÐFor purposes of this rule,

Ònon - complianceÓ means the employer's

failure to secure the payment of workers'

compensation pursuant to Chapter 440, F.S.Ñ

(emphasis added)). It would lead to an

Ðabsurd resultÑ to limit the period of

noncompliance to one day, as it would mean

that Ða noncompliant employer could simply

provide . . . records demonstrating that the

employees observed by the Department were

only employed on the date of the

investigation, and the Department would be

precluded from imputing payroll for each of

those employees for the remaining periods of

noncompliance.Ñ DepÓt of Fin. Servs. v.

Aleluya Roofi ng Plus Constr., Inc., Case

No. 15 - 2801 (Fla. DOAH Nov. 13, 2015; Fla.

DFS Jan. 29, 2016). Thus, the period of

non - compliance cannot be limited to the non -

compliance for employees found on site, but

rather must be the period of noncompliance

based upon the employerÓs non - compliance.

5 2 . Administrative Law Judge Robert E. Meale recently

addressed th at argument in Department of Financial Services,

Division of WorkersÓ Compensation v. Soler and Son Roofing , Case

No. 15 - 7356 (Fla. DOAH July 19, 2016; final order pending) by

concluding as follows:

34. Petitioner's argument is unpersuasive.

Obviously, noncompliance is a failure of an

employer, not an employee, so the focus is

on the employer in this sense. But the

poi nt of the inquiry is to identify the

periods of noncompliance; this requires a

determination of when particular employees

were uncovered and for how long. Properly

interpreted, the rule says that the period

of noncompliance is the two years stated in

the Request or, if shorter, the period or

periods within these two years that the

employer was in noncompliance.

35. Quoting from its final order in

Department of Financial Services v. Aleluya

Roofing Plus Construction, Inc. , 2016 Fla.

Div. Admin. Hear. LEX IS 109 (Fla. DOAH

Jan. 29, 2016), Petitioner again worries

that "a non - compliant employer could simply

provide . . . records demonstrating that the

employees observed by the Department were

only employed on the date of the

investigation, and the Department would be

precluded from imputing payroll for each of

those employees for the remaining periods of

non - compliance." Along these lines, as

quoted in Petitioner's proposed recommended

order, one of its witnesses testified that

she could not use a shorter al ternative

period of non - compliance for Respondent

because "[n]o records were provided to show

payroll and payroll records [that] are

needed to show if any payments occurred

outside of leasing of employees." (Tr. 46).

36. These concerns and suspicions do not

warrant Petitioner's imputation of a two -

year period of noncompliance when an

employer fails to produce business records.

Understandably, Petitioner prefers the

expedience of the imputation of a two - year

period of noncompliance to the proof of an

a ctual period of noncompliance. If it

matters, these concerns and suspicions fail

to account for the remedies that are

available to Petitioner if an uncooperative

employer tries to shorten the penalty period

by doling out selected business records.

Althou gh the statutory requirement of

releasing [a stop work order] when an

employee secures the payment of workers'

compensation probably undermines the utility

of [a stop work order] in obtaining business

records, Petitioner still has the explicit

authority to obtain an adjudication of civil

or even criminal contempt, presumably of the

principals of a corporate employer. And the

de novo hearing provides the opportunity for

discovery and sanctions for the failure to

respond to discovery, including the sanction

of striking the employer's request for

hearing, thus leaving Petitioner's proposed

penalty assessment intact and the employer

subject to the more onerous penalty -

calculation provisions that apply prior to

the transmittal of the file to DOAH . . . .

5 3 . J udge Meale also concluded that the DivisionÓs

position amounts to an invalid evidentiary presumption:

More importantly, Petitioner's preference

for imputation over proof, as reflected in

its unsustainable interpretation of rule

69L - 6.028(2), effectively cr eates an

evidentiary presumption: if an employer

fails to provide its business records, its

failure to have secured the payment of

workers' compensation will be presumed to

have persisted for the entire two years.

However, the power to create evidentiary

presumptions is reserved to the legislature

and the courts and does not extend to the

executive branch. See , e.g., McDonald v.

Dep't of Prof'l Reg . , 582 So. 2d 660 (Fla.

1st DCA 1991).

5 4 . Finally, the Division is interpreting rule 69L -

6.028(2) in a wa y that contravenes section 440.107(7)(d)1 . , b y

arguing in its Proposed Recommended Order that it should be

presumed that Messrs. Hicks and Garthwait worked for JNK from

November 10, 2014 , through December 10, 2015, when the evidence

demonstrates that Messr s. Hicks and Garthwait only worked for

JNK on December 10, 2015 . Under the aforementioned statute,

an employer is only subject to being penalized Ðduring periods

for which it failed to secure the payment of workersÓ

compensation . . . wit hin the preceding 2 - year period .Ñ If

Messrs. Hicks and Garthwait only worked for JNK on December 10,

2015, then JNK did not fail to secure workersÓ compensation for

Messrs. Hicks and Garthwait prior to December 10, 2015, and JNK

cannot be penalized for any such failure oc curring prior to

December 10, 2015. Interpreting rule 69L - 6.028(2) as requiring

a presumption that JNK was noncompliant prior to December 10,

2015, under the facts of the instant case contravenes secti o n

440.107(7)(d)1 . The aforementioned statute clearly contemplates

a penalty assessment for all periods of noncompliance within the

relevant two - year period, b ut only for such periods .

55. The appropriate penal ty for the proven period of

non compliance is $841.94. Thus, the minimum statutory penalty

of $1,0 00.00 is warranted.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Financial

Services, Division of Worker sÓ Compensation enter a final order

imposing impose a $1,000 penalty on Dona ld Kehr, d/b/a JNK

Framing Inc., a Dissolved Florida Corporation.

DONE AND ENTERED this 10 th day of August , 2016 , in

Tallahassee, Leon County, Florida.

S

G. W. CHISENHALL

Administrative Law Judge

Division of Administrat ive 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 10 th day of August, 2016 .

ENDNOTE S

1/ Unless stated otherwise, all statutory citations are to the

2015 version of the Florida Statutes.

2/ Section 440.02(15)(b)2 . , Florida Statutes , provides that

Ð[a]s to officers of a corporation who are engaged in the

construction industry, no mor e than three officers of a

corporation or of any group of affiliated corporations may elect

to be exempt from this chapter by filing a notice of election

with the [Department of Financial Service s] as provided in s.

440.05.Ñ

3/ Section 440.107(7)(d)1 . r equires the Division to evaluate

whether the bus iness that is the subject of a Stop - Work O rder

had workersÓ compensation coverage in place during the two - year

period preceding the S top - Work O rder.

4/ Section 440.12(2) defines the Ðstatewide average we ekly wageÑ

to be Ðthe average weekly wage paid by employers subject to the

Florida Reemployment Assistance Program Law as reported by the

Department of Economic Opportunity for the four calendar

quarters ending each June 30, which average weekly wage shall be

determined by the Department of Economic Opportunity on or

before November 30 of each year and shall be used in determining

the maximum weekly compensation rate with respect to injuries

occurring in the calendar year immediately following.Ñ

5/ Sect ion 440.107(7)(e) provides that Ð[w]hen an employer fails

to provide business records sufficient to enable the department

to determine the employerÓs payroll for the period requested for

the calculation of the penalty provided in paragraph (d), for

penalty calculation purposes, the imputed weekly payroll for

each employee, corporate officer, sole proprietor, or partner

shall be the statewide average weekly wage as defined in s.

440.12(2) multiplied by 2.Ñ

COPIES FURNISHED:

Joaquin Alvarez, Esquire

Dep artment of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 4229

(eServed)

Donald Kehr

Donald Kehr, d/b/a JNK Framing, Inc.

Apartment 1

5160 South Ridgewood Avenue

Port Orange, Florida 32127

Julie Jones, CP, FRP, Agency Clerk

Divi sion of Legal Services

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0390

( eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this R ecommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.