Procedures for Imputing Payroll and Penalty Calculations

DEPARTMENT OF FINANCIAL SERVICES
Division of Worker's Compensation

RULE NO: RULE TITLE
69L-6.028: Procedures for Imputing Payroll and Penalty Calculations

NOTICE OF CHANGE

Notice is hereby given that the following changes have been made to the proposed rule in accordance with subparagraph 120.54(3)(d)1., F.S., published in Vol. 34 No. 51, December 19, 2008 issue of the Florida Administrative Weekly.

These changes are being made to address concerns expressed by the Joint Administrative Procedures Committee.

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 business 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 the penalty or an alternative period of non-compliance as determined by the department, whichever is less. The department may determine an alternative period of non-compliance by obtaining records from other sources during the department’s investigation of the employer that evidence a period of non-compliance different than the time period requested in the business records request for the calculation of the penalty.

(a) 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 1.5. 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 1.5.

(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 associated with the employer’s business activities. If records demonstrate the assignment of an alternative workers’ compensation classification code, such classification code will be applicable to all employees. However, the department shall may assign an alternative workers’ compensation classification code for an employee based upon 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 order assessing the penalty 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. If the employer provides such business records, the department shall recalculate the employer’s penalty pursuant to Section 440.107(7)(d), F.S. If 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 are not provided to the department within twenty business days after service of the order assessing the penalty, the penalty based upon the time period requested for the calculation of the penalty imputing the employer’s payroll for the time period in the business records request for the calculation of the penalty will remain in effect.

Specific Authority 440.107(9), 440.591 FS. Law Implemented 440.107(7)(e) FS. History–New 7-12-05, Amended 8-31-06, ________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Tasha Carter, Bureau Chief, Bureau of Compliance, Division of Workers’ Compensation

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

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: September 15, 2008

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAW: October 3, 2008

The remainder of the rule reads as previously published.