The proposed rule implements applicable sections of HB 553 that was passed by the 2013 Legislature. HB 553 amended s. 440.107(7)(b), F.S., revising the law to include a limited liability company as a successor entity for purposes of effectuating a ...

 

DEPARTMENT OF FINANCIAL SERVICES

Division of Worker's Compensation

RULE NO.: RULE TITLE:

69L-6.031Stop Work Orders in Effect Against Successor Corporations or Business Entities

PURPOSE AND EFFECT: The proposed rule implements applicable sections of HB 553 that was passed by the 2013 Legislature. HB 553 amended paragraph 440.107(7)(b), F.S., revising the law to include a limited liability company as a successor entity for purposes of effectuating a stop-work order. The proposed rule is updated to include limited liability companies as successor entities for purposes of effectuating a stop-work order.

SUMMARY: The proposed rule is amended to reflect statutory revisions to paragraph 440.107(7)(b), F.S., to include limited liability companies as successor entities for purposes of effectuating stop-work orders.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has been prepared by the agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: 1) no requirement for a SERC was triggered under Section 120.54 or paragraph 120.54(3)(b), F.S.; and 2) there are no adverse impacts or regulatory costs associated with the proposed rules exceeding those criteria established in paragraph 120.541(2)(a), F.S.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 440.107(9), 440.591 FS.

LAW IMPLEMENTED: 440.107(7)(b) FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE,TIME AND PLACE SHOWN BELOW(IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):

DATE AND TIME: Tuesday, December 10, 2013, 10:00 a.m.

PLACE: 102, Hartman Building, 2012 Capital Circle Southeast, Tallahassee, Florida

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: Robin Delaney @ [phone] or [e-mail]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Robin Delaney, Chief, Bureau of Compliance, Division of Workers’ Compensation, Department of Financial Services, 200 E. Gaines Street, Tallahassee, Florida 32399-4228, [phone] or [e-mail]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

69L-6.031 Stop-Work Orders in Effect Against Successor Corporations or Business Entities.

(1) Under paragraph Section 440.107(7)(b), F.S., stop-work orders or orders of penalty assessment issued against a corporation, limited liability company, partnership, or sole proprietorship shall be in effect against any successor corporation or business entity that has one or more of the same principals, limited liability company members, or officers as the predecessor corporation or business entity against which the stop-work order was issued and are engaged in the same or equivalent trade or activity.

(a) For employers engaged in the construction industry, a corporation, limited liability company, partnership, or sole proprietorship and the successor corporation or business entity that has been issued a stop-work order or order of penalty assessment, are engaged in the same or equivalent trade or activity if they each perform or have performed business operations that include operations described in at least one classification code listed in Rule 69L-6.021, F.A.C.

(b) For employers engaged in the non-construction industry, a corporation, limited liability company, partnership, or sole proprietorship and the successor corporation or business entity that has been issued a stop-work order or order of penalty assessment, are engaged in the same or equivalent trade or activity if they each perform or have performed business operations that include operations described in at least one classification code that is in the manufacturing, goods and services, or the office and clerical industry group listed in subsection (6) of this rule.

(c) For employers that perform business operations described by one of the classification codes in the miscellaneous industry groups listed in subsection (6) of this rule, a corporation, limited liability company, partnership, or sole proprietorship and the successor corporation or business entity that has been issued a stop-work order or order of penalty assessment, are engaged in the same or equivalent trade or activity if they each perform or have performed the same business operation described in one of the classification codes contained in the miscellaneous industry groups.

              (2) A stop-work order or order of penalty assessment issued against a corporation, limited liability company, partnership, or sole proprietorship becomes effective against a successor corporation or business entity that has one or more of the same principals, directors, officers, limited liability company members, partners, or shareholders with a 10% or greater interest, including any “affiliated person” as defined in subsection Section 440.05(15), F.S., in common with the predecessor corporation or business entity against which the original stop-work order or order of penalty assessment was issued and is engaged in the same or equivalent trade or activity, through service on the successor corporation or business entity of an order applying a stop-work order or order of penalty assessment to successor corporation or business entity. The order applying a stop-work order or order of penalty assessment to successor corporation or business entity remains in effect until withdrawn by the department.

(3) In the event one of the following three criteria is satisfied, the department will withdraw an order applying a stop-work order or order of penalty assessment:

(a) The department must have released the stop- work order or order of penalty assessment in effect against the predecessor corporation, limited liability company, partnership, or sole proprietorship that has one or more of the same principals, officers, directors, limited liability company members, partners, or shareholders with a 10% or greater interest, in common with the successor corporation or business entity.

(b) The principal, officer, director, limited liability company member, partner, or a shareholder with a 10% or greater interest in the successor corporation or business entity against which the stop-work order or order of penalty assessment has been served, must formally disassociate himself or herself from the predecessor corporation, limited liability company, partnership, or sole proprietorship by providing the department with the following:

1. Records obtained from the Florida Department of State, Division of Corporations, indicating that no person or entity affiliated with the successor corporation or business entity holds any position as an officer, director, limited liability company member, or shareholder with a 10% or greater interest in the predecessor corporation or business entity.

2. through 3. No change.

(c) The successor corporation or business entity and the predecessor corporation, limited liability company, partnership, or sole proprietorship that has been issued a stop-work order or order of penalty assessment, must no longer be engaged in the same or equivalent trade or activity, as determined by the department, pursuant to the codes from subsection (6) of this rule.

(4) An order applying a stop-work order or order of penalty assessment shall take effect when served upon the employer or, for a particular worksite, when served at that worksite.

(5) Under paragraph Section 440.107(7)(c), F.S., the department shall assess a penalty of $1,000 per day against an employer for each day that the employer conducts business operations in violation of an order a applying a stop-work order or order of penalty assessment.

(6) No change.

Rulemaking Specific Authority 440.107(9), 440.591 FS. Law Implemented 440.107(7)(b) FS. History–New 10-29-06, Amended___________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Robin Delaney, Chief, Bureau of Compliance, Division of Workers’ Compensation, Department of Financial Services

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Jeff Atwater, Chief of Financial Officer, Department of Financial Services

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: November 4, 2013

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: August 30, 2013