18-001632 Department Of Financial Services, Division Of Workers&Apos; Compensation vs. Pfr Services Corp. Status: Closed Recommended Order on Monday, January 14, 2019.

Summary: Petitioner proved that Respondent failed to secure workers' compensation coverage for its employees during the audit period. Recommend credit toward penalty be given for premium payment and down payment to release Stop-Work Order.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL

SERVICES, DIVISION OF WORKERS '

COMPENSATION,

Petitioner,

vs. Case No. 18 - 1632

PFR SERVICES CORP. ,

Respondent.

_______________________________/

RECOMMENDED ORDER

A hearing was conducted in this case pursuant to

s ections 120.569 and 120.57(1), Florida Statutes (2018) , 1/ before

Cathy M. Sellers, an Administrative Law Judge ( " ALJ " ) of the

Division of Administrative Hearings ( " DOAH " ), on August 8 and

October 17, 2018 , by video teleconference at sites in Miami and

Tallahassee, Florida.

APPEARANCES

For Petitioner: Leon Melnicoff, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 4229

For Respondent: Rosana Gutierrez

PFR Services Corp.

No. 101 - 102

8040 Northwest 95th Street

Hialeah, Florida 33 0 16

STATEMENT OF THE ISSUES

The issues in this case are : (1) w hether Respondent , PFR

Services Corp. , failed to secure the payment of workers '

compensation coverage for its employees in violation of

chapter 440, Florida Statutes ( 2017 ) 2 / ; and (2) if so, the

penalty that should be imposed.

PRELIMINARY STATEMENT

On October 16, 2017 , Petitioner, Department of Financial

Services, Division of Workers ' Compensation, issued a S top - W ork

O rder, alleging that Respondent failed to secure the payment of

workers ' compensati on in violation of chapter 440 and the

Insurance Code, and assessing a penalty. On N ovember 16, 2017,

Petitioner issued an Amended Order of Penalty Assessment,

seeking to impose a penalty of $35,262.32 . Respondent timely

requested an administrative hearing, and t he matter was referred

to DOAH to conduct an administrative hearing under

se ctions 120.569 and 120.57(1).

The final hearing initially was scheduled for June 4, 2018,

but pursuant to the parties ' request, was continued until

August 8, 2018. The final hearing was convened on August 8,

2018; however, Respondent did not appear due to R espondent ' s

representative ' s illness . Petitioner ' s ore tenus motion for

continuance was granted , and the hearing was rescheduled for

October 17, 2018.

The final hearing was held on October 17, 2018. A duly

sworn Spanish language interpreter served as translator at th e

final hearing. Petitioner presented the testimony of Cesar

Tolentino, Yeanli Velez, and Lawrence Pickle . Petitioner ' s

Exhibits 1 through 7 and 9 through 15 were admitted into

evidence without objection, and Petitioner ' s Exhibit 8 was

admitted into evidence over objection . Rosanna Gutierrez

testified on behalf of Respondent. Respondent did not tender

any exhibit s for admission into evidence.

A one - volume T ranscript was filed on October 25, 2018 ,

and Petitioner timely filed a proposed recommended order on

November 5, 2018. H owever, due to numerous material errors and

inaccuracies in the transcript, Petitioner was granted leave to

file a corrected transcript .

The Corrected Transcript was filed on November 15, 2018 ,

and the parties were given until November 26, 2018, to file

proposed recommended orders based on the Corrected Transcript .

Petitioner ' s Amended P roposed R ecommended O rder was timely filed

on November 16, 2018, and was duly considered in preparing this

Recomm ended Order. Respondent did not file a proposed

recommended order.

FINDINGS OF FACT

The Parties

1. Petitioner is the state agency responsible for

enforcing the requirement that employers in the State of Florida

secure the payment of workers ' compensation insurance covering

their employees, pursuant to chapter 440.

2. Respondent is a Florida corporation . At all

times relevant to this proceeding, its business address was

8040 Northwest 95th Street, Hialeah, Florida.

3. The evidence estab lishes that Respondent was actively

engaged in business during the two - year audit period , from

October 17, 2015, through October 16, 2017, pertinent to this

proceeding . 3 /

The Compliance Investigation

4 . On October 16, 2017 , Petitioner ' s compliance

investigator, Cesar Tolentino , conducted a workers ' compensation

compliance investigation at a business located at 8040 Northwest

95th Street, Hialeah, Florida.

5. The business was being operated as a restaurant , to

which National Council o n Compensation Insurance ( " NCCI " ) class

code 9082 applies.

6 . Tolentino observed Maria Morales, Gabriela Nava, and

Geraldine Rodriquez performing waitressing job duties and Rafael

Briceno performing chef job duties. The evidence established

that these four persons were employed by Respondent.

7 . Additionally, the evidence established that corporate

officers Rosanna Gutierrez and Mary Pineda were employed by

Respondent. 4 / The evidence established that neither had elected

to be exempt from the workers ' compensation coverage

requirement.

8 . In sum, the evidence establishe d that Respondent

employed six employees , none of whom were independent

contractors , and none of whom were exempt from the workers '

compensation coverage requirement .

9 . Tolentino conducted a search of Petitioner ' s Coverage

and Compensation Compliance Automated System, which consists of

a database of workers ' compensation insurance coverage policies

issued for businesses in Florida, and all elections of

exemptions filed by corporate offi cers of businesses in Florida.

Tolentino ' s search revealed that Respondent had never purchased

workers ' compensation coverage for its employees ; that its

corporate of ficers had not elected to be exempt from the

workers ' compensation coverage requirement ; and that Respondent

did not lease employees from an employee leasing company.

10 . G utierrez acknowledged that Respondent had not

purchased workers ' compensat ion coverage for its employees, and

told Tolentino that she did not know it was required.

1 1 . Based on Tolentino ' s investigation, on October 16,

2017, Petitioner served Stop - Work Order No. 17 - 384 ( " Stop - Work

Order " ) o n Respondent.

1 2 . At the time Tolentino served the Stop - Work Order, he

informed Gutierrez that if Respondent obtained a workers '

compensation policy and provided Petitioner a receipt of the

amount paid to activate the policy within 28 days of issuance of

the Stop - Work Order, Respondent ' s penalty would be reduced by

the amount paid to activate the policy.

1 3 . On October 16, 2017, Petitioner, through Tolentino,

also served on Respondent a Request for Production of Business

Records for Penalty Assessment Calculation ( " Business Records

Request " ) , requesting Respondent provide several categories of

business records covering the two - year audit period from

October 16, 2015, to October 16, 2017. Specifically, Petitioner

requested that Respondent provide its pa yroll documents

consisting of time sheets, time cards, attendance records,

earnings records, check stubs, check images, and payroll

summaries , as applicable . Petitioner also requested that

Respondent provide , as applicable, its federal income tax

documents; account documents, including business check journals

and statements and cleared checks for all open or closed

business accounts; cash and check disbursements records;

workers ' compensation coverage records; and independent

contractor records.

1 4 . At the time Tolentino served the Business Records

Request, he informed Gutierrez that if Respondent obtained a

workers ' compensation policy and provided Petitioner the

complete business records requested within ten business days,

Respondent ' s penalty would be reduced by 25 percent.

1 5 . The evidence establishes that Respondent did not

provide any business records within that time period , so is not

entitled to receive that penalty reduction.

1 6 . On November 16, 2017, Petitioner issued an Amended

Order of Penalty Assessment, assessing a total penalty of

$35,262.32 against Respondent for having failed to secure

workers ' compensation coverage for its employees during the

audit period .

1 7 . On December 14, 2017, Gutierrez met with Tolentino

and , at that time, provided d ocumentation to Petitioner showing

that Respondent had acquired workers ' compensation coverage for

its employees , effective October 28, 2017 , and had paid

$ 3,966 .00 for the policy. At the December 14 , 2017, meeting,

Gutierrez presented an envelope postmarked October 30, 2017,

showing that Respondent had mailed Petitioner proof of having

obtained the workers ' compensation coverage within 28 days of

the date the Stop - Work Order was issued ; however, this mail was

returned, so Petitioner did not receive such proof within 28

days. The evidence established that this mail was returned to

Respondent on December 4, 2017 ÏÏ several days after the 28 - day

period had expired, and too late for Respondent to t ake

additional steps to deliver to Petitioner the proof of its

having purchased the workers ' compensation policy. 5 /

1 8 . Because Petitioner did not receive Respondent ' s proof

of having purchased a workers ' compensation policy within

28 days of issuance of the Stop - Work Order , it did not reduce

the penalty imposed on Respondent by the amount that Respondent

had paid for the premium .

1 9 . The evidence also establishes that at the December 14 ,

2017, meeting, Respondent tendered to Petitioner a cashier ' s

check in the amount of $1,000.00 .

20 . As a result of having received proof of workers '

compensation coverage for Respondent ' s employees , Petitioner

issued an Agreed Order of Conditional Release from Stop - Work

Order ( " Order of Conditional Release " ) on December 14, 2017 ,

releasing Respondent from the Stop - Work Order .

2 1 . The Order of Conditional Release expressly recognized

that Respondent " paid $1,000.00 as a down payment for a penalty

calculated pur suant to F.S. 440.107(7)(d)1. " Additionally,

p age 1 of 3 of t he Penalty Calculation Worksheet attached to the

Amended Order of Penalty Assessment admitted into evidence at

the final hearing reflects that Respondent paid $ 1,000.00 toward

the assessed penalty of $ 35,262.32. This document shows

$34, 262.32 as the " Balance Due. "

Calculation of Penalty to be Assess ed

2 2 . Petitioner penalizes employers based on the amount of

workers ' compensation insurance premiums the employer has

avoided paying. The amount of the evaded premium is determined

by reviewing the employer ' s business records .

2 3 . I n the Business Records Request served on October 16,

2017 , Petitioner specifically requested that Respondent provide

its pa yroll documents, federal income tax documents ,

d isbursements records , workers ' compensation coverage records,

and other specified documents.

2 4 . When Gutierrez met with Tolentino on December 14,

2017, she provided some , but not all, of the business records

that Petitioner had requested . Respondent subsequently provided

additional business records to Petitioner , on the eve of the

final hearing.

2 5 . Petitioner revie wed all of the business records

that Respondent provided . However, the se business records

were incomplete because they did not include check images , as

specifically required to be maintained and provided to

Petitioner pursuant to Florida Administrative Code

Rule 69L - 6.015(6) . Check images are required under Florida

Administrative Code Rule 69L - 6.015(6) because such images reveal

the payees, which can help Petitioner identify the employees on

the employer ' s payroll at any given time. This information is

vital to determining whether the employer complied with the

requirement to have workers ' compensation coverage for all of

its employees.

2 6 . Because Respondent did not provide the required check

images, the records were in sufficient to enable Petitioner to

calculate Respondent ' s payroll for the audit period.

2 7 . Under section 440.107(7)(e), business records provided

by the employer are insufficient to enable Petitioner to

calculate the employer ' s payroll for the period for which the

records are requested, Petitioner is authorized to impute the

weekly payroll for each employee as constituting the statewide

average weekly wage multiplied by 1.5.

2 8 . To calculate the amount of the penalty due using the

imputed method , Petitioner imputes the gross payroll for e ach

employee for each period during which that employee was not

covered by required workers ' compensation insurance. To

facilitate calculation, Petitioner divides the gross payroll

amount for each employee for the specific non - compliance period

by 10 0 . 6 / Petitioner then multiplies this amount by the approved

NCCI Scopes Manual rate ÏÏ here, 2.34, which applies to

r estaurants ÏÏ to determine the amount of the avoided premium for

each employee for each non - compliance period. This premium

amount is then multiplied by two to determine the penalty amount

to be assessed for each employee not covered by required

workers ' compensation insurance for each specific period of non -

compliance.

2 9 . Performing these calculations, Petitioner determined

that a penalty in the amount of $35,262.32 should be assessed

against Respondent for failing to provide workers ' compensation

insurance for its employees, as required by chapter 440 , for the

period from October 17, 2015, through October 16, 2017.

30 . As discussed above, on December 14, 2017, Respondent

paid a down payment of $1 , 000.00 toward the penalty, and this

was expressly recognized in the Stop - Work Order that was issued

tha t same day. Thus , the amount of the penalty to be assessed

against Respondent should be reduced by $1,000.00 , to

$34,262.32 . As pr eviously noted, this amount is identified on

page 1 of 3 of the Amended Order of Penalty Assessment as the

" Balance Due . "

3 1 . As discussed in paragraph s 1 7 and 1 8 , above, the

evidence establishes that Respondent purchased a workers '

compensation policy to cover its employees within 11 days of

issuance of the Stop - Work Order, and mailed to Petitioner proof

of having purchased such policy on October 30, 2017 ÏÏ well within

the 28 - day period for providing such proof. However, as

discussed above, this mail was returned to Respondent on

December 4, 2017 ÏÏ too late for Respondent to take additional

steps to provide such proof to Petitioner within the 28 - day

period. The re is no evidence in the record showing that failure

of the mail ed proof to be received by Pe titioner was due to any

fault on Respondent ' s part .

Respondent ' s Defenses

3 2 . On behalf of Respondent, Gutierrez testified that

Respondent did everything that Tolentino had told them to do.

Respondent purchased workers ' compensation insurance and

provided proof to Petitioner that its employees were covered . 7/

3 3 . Gutierrez also testified that although Respondent ' s

business was created in May 2013, it did not begin operating

and, therefore, did not have any employees, u ntil January 2016. 8 /

However, as previously noted, the persuasive evidence does not

support this assertion.

CONCLUSIONS OF LAW

3 4 . DOAH has jurisdiction over the parties to, and subject

matter of, this proceeding. §§ 120.569, 120.57(1), Fla. Stat.

3 5 . This is a penal proceeding to enforce the workers '

compensation coverage requirements of chapter 440. Because

Petitioner ' s action at issue in this proceeding is penal,

Petitioner has the burden of proof to show, by clear and

convincing evidence, that Re spondent committed the violations

alleged in the S top - Work Order and Amended Order of Penalty

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

670 So. 2d 932, 935 (Fla. 1996); Ferris v. Turlington , 510 So.

2d 292 (Fla. 1987).

36 . The clear and convincing evidence standard of proof

has been described by the Florida Supreme Court as follows:

Clear and convincing evidence requires that

the evidence must be found to be credible;

the facts to which witnesses testify must be

distinctly remembered; the testimony must be

precise and explicit and the witnesses must

be lacking in confusion as to the facts in

issue. The evidence must be of such weight

that it produces in the mind of the trier of

fact a firm belief or conviction, without

hesitancy, as t o the truth of the

allegations sought to be established.

In re Davey , 645 So. 2d 398, 404 (Fla. 1994)(quoting Slomowitz

v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983)).

3 7 . Pursua nt to sections 440.10, 440.107(1 ) through (3) ,

and 440.38, every empl oyer is required to obtain workers '

compensation insurance coverage for the benefit of its employees

unless exempted or otherwise excluded under chapter 440. Strict

compliance with the workers ' compensation coverage provision

requirement by the employer is required. See C & L Trucking v.

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

3 8 . " Employer " is defined, in pertinent part, as " every

person carrying on any employment . . . . " § 440.02(16)(a),

Fla. Stat.

3 9 . " Employment " is defined to include " [a]ll private

employments in which four or more employees are employed by the

same employer. " § 440.02(17)(b)2., Fla. Stat.

40 . " Employee " is defined , in pertinent part, as " any

person who receives remuneration for an employer for the

performance of any work or service while engaged in any

employment . " § 440.02(15)(a), Fla. Stat. " Employee " is also

defined to include " any person who is an officer or a

corporation and who performs services for remuneration for such

corporation in this state. " § 440.02(15)(b), Fla. Stat.

4 1 . As discussed in detail above, the evidence clearly and

convincingly establishe s that between October 17, 2015 , and

October 16, 2017, Respondent employed employees for whom it did

not secure workers ' compensat ion insurance coverage, in

violation of section s 440.10 , 440.107 , and 440.38 .

4 2 . Section 440.107(7)(d) sets for th the method for

assessing penalties for employer failure to secure workers '

compensation coverage in violation of section 440.10. The

statute states , in pertinent part :

1. In addition to any penalty, stop - work

order, or injunction, the department shall

assess against any employer who has failed

to secure the payment of compensa tion as

required by this chapter a penalty equal

to 2 times the amount the employer 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

r equired by this chapter within the

preceding 2 - year period or $1,000, whichever

is greater.

a. For employers who have not been

previously issued a stop - work order or order

of penalty assessment, the department must

allow the employer to receive a credit for

the initial payment of the estimated annual

workers ' compensation policy premium, as

determined by the carrier, to be applied to

the penalty. Before applying the credit to

the penalty, the employer must provide the

department with documentation reflec ting

that the employer has secured the payment of

compensation pursuant to s. 440.38 and proof

of payment to the carrier. In order for the

department to apply a credit for an employer

that has secured workers ' compensation for

leased employees by entering into an

employee leasing contract with a licensed

employee leasing company, the employer must

provide the department with a written

confirmation, by a representative from the

employee leasing company, of the dollar or

percentage amount attributable to the

initial estimated workers ' compensation

expense for leased employees, and proof of

payment to the employee leasing company.

The credit may not be applied unless the

employer provides the documentation and

proof of payment to the department within

28 days after service of the stop - work order

or first order of penalty assessment upon

the employer.

b. For employers who have not been

previously issued a stop - work order or order

of penalty assessment, the department must

reduce the final assessed penalty by

25 percent if the employer has complied with

administrative rules adopted pursuant to

subsection (5) and has provided such

business records to the department within

10 business days after the employer ' s

receipt of the written request to produce

business re cords.

4 3 . Pursuant to section 440.107(7)(e), when an employer

does not provide business records sufficient to enable

Petitioner to determine its payroll during all or part of this

two - year period for purposes of calculating the penalty to be

assessed, Petitioner imputes the employer ' s payroll, pursuant to

rule 69L - 6.028(3).

4 4 . Rule 69L - 6.028 , which establishes Petitioner ' s

procedures for imputing payroll and penalty calculations,

provides , in pertinent part:

(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 paragraph

440.107(7)(e), F.S., the Department may

impute the employer ' s payroll at any time

after ten business days after receipt by the

employer of a written request to produce

such business records.

(2) The employer ' s time period or periods

of non - compliance means the time period(s)

within the two years pre ceding the date the

stop - work order was issued to the employer

within which the employer failed to secure

the payment of compensation pursuant to

chapter 440, F.S., and must be either the

same time period as set forth in the

business records request for th e calculation

of penalty or an alternative time period or

period(s) as determined by the Department,

whichever is less. The employer may provide

the Department with records from other

sources, including, but not limited to,

the Department of State, Divisi on of

Corporations, the Department of Business and

Professional Regulation, licensing offices,

and building permitting offices to show an

alternative time period or period(s) of non -

compliance.

(3) When an employer fails to provide

business records suffi cient 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 pursuant to

paragraph 440.107(7)(d), F.S., the imputed

weekly payroll for each current and former

employee, corporate officer, sole proprietor

or partner identified by the Department

during its investigation will be the

statewide average weekly wage as defined in

subsection 440.12(2), F.S., that is in

effect at the time the stop - work order w as

issued to the employer, multiplied by 1.5.

(a) 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 will be

prorated from the imputed weekly payroll for

a full week.

(b) The imputed weekly payroll for each

employee, corporate officer, sole

proprietor, and partner will be assigned to

the highest rated workers ' compensation

classification code for an employee based

upon records or the investigator ' s physical

observation of any employee ' s activities.

(4) If the Department imputes the

employer ' s payroll, the employer will 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 time

period(s) of non - compliance. The employer ' s

penalty will be recalculated pursuant t o

paragraph 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

eff ect.

4 5 . As addressed above, Respondent failed to provide

business records sufficient to enable Petitioner to determine

its payroll for the portion of the penalty period between

October 17, 2015 , and October 16, 2017 . Thus, as discussed

above, Petitioner applied the methodology codified at r ule 69L -

6.028(3) to impute Respondent ' s gross payroll for that period.

4 6 . Based on the foregoing, it is concluded that

Petitioner correctly applied section 440.107(7)(d)1. and (7)(e)

and rule 69L - 6.028(3) to accurately impute and calculate the

gross payroll amounts for Respondent for the applicable penalty

period. Petitioner also applied the pertinent NCCI

classification code , for restaurants, to each employee on

Respondent ' s payroll during the audit peri od for whom it had

failed to secure workers ' compensation coverage, and correctly

calculated a penalty of $35,262.32.

4 7 . However, as discussed above, on December 14, 2017,

Respondent paid a down payment of $1,000.00 against this

calculated penalty, so should be given credit for that payment.

Accordingly, it is concluded that the calculated penalty of

$35,262.32 should be reduced by the $1,000.00 down payment,

bringing the t otal amount of the outs tanding penalty to

$34,262.32.

4 8 . Additionally, the undersigned concludes that

Respondent should be given credit in the amount of $ 3,966 .00 ÏÏ

the amount of the premium paid to secure workers ' compensation

coverage ÏÏ toward the total amount of the penalty remaining due .

As discussed above, the evidence establishes that Respondent

mailed to Petitioner the proof of payment for the workers '

compensation policy it obtained, well within the 28 - day

statutory period for doing so in order to obtain credit toward

the assessed penalty. Through no fault of its own , that mailed

proof of payment was returned to Respondent , long after

Respondent had timely mailed the proof of payment , and too late

for it to make another timely attempt to provide the proof of

payment to Petitioner.

4 9 . When construing statute s , court s must first look to

the plain meaning of the words used by the Legislature. See

Verizon Bus. Purchasing, LLC v. Dep ' t of Rev . , 164 So. 3d 806,

809 (Fla. 1st DCA 2015)( citing W. Fla. Reg ' l Med. Ctr., Inc. v.

See , 79 So. 3d 1, 9 (Fla. 2012)) . If the language of the

statute is unambiguous and conveys a clear and definite meaning,

the court must apply that meaning , even if it conflicts with the

interpretation of the statute adopted by the administrative

agency charged with enforcing the statute. See Verizon Fla.,

Inc. v. Jacobs , 810 So. 2d 906, 908 (Fla. 2002) ( " An agency ' s

interpretation of the statute it is charged with enforcing is

entitled to great deference . . . [and] a court will not depart

from the contemporaneous construction of a statute by a state

agency charged with its enforcement unless the construction is

' clearly erroneous. '" ); Verizon Bus. Purchasing , 164 So. 3d at

812 ( " Judicia l deference does not require that courts adopt an

agency ' s interpretation of a statute when the agency ' s

interpretation cannot be reconciled with the plain language of

the statute. " ) . See also Micjo, Inc. v. Dep ' t of Bus. & Prof ' l

Reg . , 78 So. 3d 124, 126 - 27 (Fla. 2d DCA 2012)(rejecting the

agency ' s interpretation of the definition of " wholesale sales

price " in section 210.25(13) , Florida Statutes, because th at

interpretation was inconsistent with the plain language of the

statute).

50 . Here, t he operative statute , section 440.107(d)1.a.,

authorize s credit toward the assessed penalty if the employer

" provides " such proof of payment to Petitioner within the

specified period . N otably, the statute does not expressly

require such proof of payment to be " received " by Petitioner

within that period. The term " provide " is not defined in

C hapter 440; accordingly, it is appropriate to look to the

dictionary definition of that term to discern its meaning.

Brandy ' s Prods. v. Dep ' t of Bus. & Prof ' l Reg. , 188 So. 3d 130,

132 (Fla. 1st DCA 2016 ). Merriam - Webster ' s New Collegiate

Dictionary , 11th edition ( " Merriam - Webster 's " ) , defines

" provides " as " to supply something . " The focus of this

definition is on the action taken by an individual or entity ÏÏ

here, the employer ÏÏ to supply something to a recipient ÏÏ here,

Petitioner . By contrast, Merriam - Webster defines the term

" receive " as " to come into possession of : acquire. " The focus

o f this definition is on the entity having obtain ed or acquir ed

the thing supplied . See Accardi v. Dep ' t of Env tl. Prot. ,

824 So. 2d 992 (Fla. 1st DCA 2002) (factually and legally

distinguishing between the mailing of notice and the receipt of

notice).

5 1 . Pursuant to the plain language of section

440.107(7)(d)1.a., it is concluded that because Respondent sent

to Petitioner, by U.S. M ail, its proof of payment within the

28 - day period from issuance of the Stop - Work Order , it timely

provided such proof of payment , and, therefore, should be given

credit for the amount paid for the workers ' compensation

coverage premium. Because the statute expressly keys credit for

premium payment to the employer providing , rather than

Petitioner receiving , such p roof of payment, Petitioner ' s not

having receive d the proof of payment within the 28 - day period is

not a valid statutory basis for disallowing such credit in

reducing the penalty in this case.

5 2 . Subtracting $3 , 966.00 from the penalty balance due of

$34,262.32 results in a penalty balance of $30,296.32 .

5 3 . Accordingly, it is concluded that Respondent owes to

Petitioner a total penalty of $ 30,296.32 for failure to secure

workers ' compensation coverage for its empl oyees during the

audit period.

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 fina l order determining that PFR Services

Corp . violated the requirement in chapter 440, Florida Statutes,

to secure workers ' compensation coverage for its employees

during the audit period, and imposing a penalty of $30,296.32.

DONE AND ENTERED this 1 4 th day of January , 2019 , in

Tallahassee, Leon County, Florida.

S

CATHY M. SELLERS

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 1 4 th day of January , 2019 .

ENDNOTES

1/ All references to chapter 120, Florida Statutes, and the

provisions therein are to the 2018 version.

2 / All references to chapter 440 and the provisions therein are

to the 2017 version, which was in effect at the time the Stop -

Work Order was issued on October 17, 2017.

3 / Respondent asserted that although the company was established

in May 2013, it did not commence business operations until ,

variously, January 2016 or January - February 201 7 . Because

Respondent asserted this defense to the requirement to have

workers ' compensation coverage for its employees for the entire

two - year audit period, Respondent bore the burden to establish

this defense. No credible evidence was presented supporting

this assertion, and, in fact, the clear and conv incing evidence,

consisting of documents provided by Respondent to Petitioner,

show s otherwise.

4 / Respondent asserted that although Gutierrez and Pineda worked

at the restaurant, they did not receive remuneration from

Respondent for their work, so did not fall within the definition

of " employee " for purposes of the workers ' compensation coverage

requirement. However, apart from Gutierrez ' testimony, no

persuasive evidence was presented to substantiate that

assertion.

5 / Section 440.107(7)(d ) 1.a. states that the employee will

receive credit for the initial payment of the estimated annual

workers ' compensation policy premium, to be applied to the

penalty. The statute further states: " [t]he credit may not be

applied unless the employer provides the documentation and proof

of payment to the department within 28 days after service of the

stop - work order or first order of penalty assessment upon the

employer. "

6 / Pickle explained that the imputed gross payroll for each

employee was divided by 100 f or each non - compliance period

because , for ease of calculation, the approved NCCI Scopes

Manual rate has been multiplied by 100 .

7/ Although Respondent paid a down payment toward the penalty

and, as discussed herein, timely provided proof of purchase of

workers' compensation coverage, and the undersigned has

recommended that Respondent be given credit for these payments

toward the penalty due, the fact remains that Respondent did not

have workers' compensation coverage for its employees during the

audit period, so is liable under section 440. 107 for a penalty

for noncompliance with that statute.

8 / If this were the case, Respondent would not have been

required to have workers ' compensation coverage for the portion

of the audit period from October 17, 2015, to some date in

January 2016. This would have slightly reduced the penalty to

be imposed. However, as discussed above, the credible,

persuasive evidence establishes that Respondent operated its

business during the entire audit period.

COPIES FURNISHED:

Rosana Gutierrez

PFR Services Corp.

No. 101 - 102

8040 Northwest 95th Street

Hialeah, Florida 33016

Leon Melnicoff, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 4229

(eServed)

Julie Jones, CP, FRP, Agency Clerk

Division 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 da ys from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.