Workers' Compensation Penalties in Florida - Construction Worksite Audits

Ben Cristal — Wed, 31 Aug 2011 01:46:00 GMT

With the State Budget in crisis mode, different State Agencies having been working overtime to raise revenues. If your worksite has been audited by the Division of Workers’ Compensation then you have experienced first hand the stress and expense that comes with it.

If an investigator from the Florida Division of Workers’ Compensation has paid a visit to audit your worksite, you found that they typically shoot and ask questions later. They operate under the premise that you are guilty until proven innocent. You will immediately be asked for certificates of insurance or exemptions from all of your subcontractors and will usually be asked to provide three years worth of bank statements. If you have not exempted yourself as an officer of your business then they typically will impute the highest wages possible to determine your personal remuneration in order to calculate your penalty. The investigators will often use your bank statements to calculate penalties based on checks written to vendors or other facilities not even associated with your business. Essentially, they make you prove that everyone who received a check from you was not your employee before your penalty will be reduced.

It is also common for a Florida Workers’ Compensation Investigator to audit your worksite and improperly code the type of work they perform. This can result in substantially increased penalty calculations.

To help safeguard against being assessed with penalties improperly, you should consider engaging in the following practices:

1. If you are a contractor, purchase an umbrella workers’ compensation policy. If you are a contractor then you are considered the employer of everyone on the worksite. All of the employees of your subcontractors are considered your employees as well if they are not covered by another policy of your subcontractor.

2. Do not rely on your leasing company or payroll company to provide workers’ compensation coverage to employees on the worksite that are not your payroll that you run through the payroll company. If you review your client service agreement carefully you will see that only those employees on payroll and approved by the leasing company will be covered.

3. Keep business expenses separate from personal expenses. This will help avoid checks written to people of businesses in your personal life from being dragged into a penalty calculation by a Florida State Workers’ Compensation investigator.

4. Check subcontractor exemptions carefully and verify their certificates of workers’ compensation insurance are valid through the website of Florida Department of Financial Services.

Being Without Workers' Compensation Coverage Can Cost You More Than You Think

Ben Cristal — Mon, 22 Aug 2011 21:01:00 GMT

Workers' Compensation insurance coverage is required for any Florida Employer that employs more than three employees. This requirment is more strict for employers in the construction industry who need to secure coverage just for having one or more employees. If an employer is without coverage despite being required to maintain coverage, the employer becomes liable for all of the benefits provided that employee by the Florida Workers' Compensation Act. This is a scenario no employer ever wants to be in as one industrial accident is all it may take to take any small business out of business. Not many employers could manage the additional expense if they suddenly have to pay all of the lost wages, legal fees and medical benefits out of the company's operating account. Unfortunately, exposure for proving an employee with workers' compensation benefits is not the only exposure that exists if the employer is uninsured. An additional exposure to keep in mind falls under Section 440.11(1)(a) which states:

If an employer fails to secure compensation as required by this chapter, an injured employee, or the legal representative thereof in case death results from the injury, may elect to claim compensation under this chapter or to maintain an action at law or in admiralty for damages on account of such injury or death. In such action the defendant may not plead as a defense that the injury was caused by the negligence of a fellow employee, that the employee assumed the risk of the employment, or that the injury was due to the comparative negligence of the employee. (emphasis added).

This option given to the injured worker can create significant exposure far above what you would be limited to if the claimant chose to file a civil negligence suit against you rather than pursuing benefits through workers’ compensation. In workers’ compensation, the employee is limited to recovering medical care and lost wages. However, in a tort action, the claimant can pursue many other causes of actions such as “pan and suffering” which would not be available to him under workers’ compensation.

Although the injured employee would have to prove ordinary negligence, the standard for doing so is made very low. The Act states that even the employer is found to be minimally negligent with the lion’s share of liability falling directly on the injured worker, you still are responsible for paying 100 percent of an award. Consequently, if the employer is just one percent responsible for the accident, the employee will ber awarded 100 percent of the damages. If any employer finds that it does not have proper coverage, it is important to secure coverage immediately. We cann assist employers in securing coverage and definding claims that occur during the period of time that the employer is without coverage.

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Workers' Compensation Penalties in Florida - Construction Worksite Audits

Being Without Workers' Compensation Coverage Can Cost You More Than You Think