FREQUENTLY ASKED QUESTIONS

Stop-Work Orders and Workers' Compensation Compliance

When will the State issue a Stop-Work Order against my company? Answer

 

How much will I have to pay as a penalty from my Stop-Work Order? Answer

How do I contest a Stop-Work Order and/or its corresponding penalty? Answer

What time limitations are there for contesting my Stop-Work Order and/or corresponding penalty? Answer

Can I negotiate a different penalty amount with the State? Answer

Can my statements to the State’s investigator later be used against me? Answer

How does the State of Florida calculate the penalty from my Stop-Work Order? Answer

What is the difference between a subcontractor and an independent contractor? Answer

Am I responsible for providing workers’ compensation insurance for my subcontractors in addition to my employees? Answer

Are workers’ compensation insurance compliance laws different for construction and non-construction businesses? Answer

ANSWERS TO YOUR FREQUENTLY ASKED QUESTIONS

 

WHEN WILL THE STATE ISSUE A STOP-WORK ORDER AGAINST MY COMPANY?

There are typically two instances when the Department of Financial Services will issue a Stop-Work Order against you and/or your business.

First, if the Department suspects that you are operating without sufficient worker’s compensation insurance, they can request business records for a period of time to determine if their suspicions are true. If you fail to produce those records, DFS can then issue a Stop-Work Order prompting a two (2) year audit, where the Department will seek access to your bank statements, check images, company invoices, etc.

 

Second, if the Department feel strongly that you are operating without sufficient workers’ compensation insurance, the Department may issue a Stop-Work Order prior to making a business records request. At this point, you will face the two (2) year audit described above.

 

Contact the LAW OFFICE OF JOHN REID today for a free phone consultation.

 

RETURN TO THE TOP

 

 

HOW MUCH WILL I HAVE TO PAY AS A PENALTY FROM MY STOP-WORK ORDER?

 

Unfortunately, the Florida Legislature and the Department of Financial Services decided to not apply a “one size fits all” penalty for failure to comply with worker’s compensation insurance laws. Instead, the Florida Legislature has crafted a statutory formula that takes into consideration numerous factors, such as gross payroll, periods of noncompliance, scope of work conducted, etc.

 

Every case and as a result every penalty will be different.

 

Contact the LAW OFFICE OF JOHN REID today for a free phone consultation.

 

RETURN TO THE TOP

 

 

HOW DO I CONTEST A STOP-WORK ORDER AND/OR ITS CORRESPONDING PENALTY?

 

A Stop-Work Order and/or its corresponding penalty is contested through a Petition Requesting Administrative Hearing under Chap. 120, Florida Statutes. The petition must meet specific statutory requirements to be legally sufficient and must be filed with the Department’s clerk within 21 calendar days. (See the importance of this time limitation below.)

 

As previously stated, there is particular information that must be included in your petition in order to be accepted. Once your petition is accepted, your Stop-Work Order will be referred to a Department attorney who will then refer your case to the Florida Division of Administrative Hearings (“DOAH”).

 

DOAH is a finder of fact in actions against Florida Departments and Agencies. Your case will not be referred to county or circuit court, but rather will be sent to an Administrative Law Judge.

 

Once referred to DOAH, you will be subject to discovery, just as you would in circuit court, and will be expected to attend a final hearing. Following the final hearing and your submission of a Proposed Recommended Order, the ALJ will file his or her Recommended Order and send the case back to the Department. The Department will then issue a Final Order in your Stop-Work Order case.

 

Contact the LAW OFFICE OF JOHN REID today for a free phone consultation.

 

RETURN TO THE TOP

 

 

WHAT TIME LIMITATIONS ARE THERE FOR CONTESTING MY STOP-WORK ORDER AND/OR CORRESPONDING PENALTY?

 

This is the most important point in responding to Stop-Work Order. When an Order, whether the initial Stop-Work Order or an Amended Order of Penalty Assessment, is issued against you and/or your business by the Department of Financial Services, you will only have 21 calendar days to contest the order by filing a Petition Requesting an Administration Hearing.

 

If you fail to contest any Order from the Department, either the Stop-Work Order or subsequent penalty order(s), within 21 calendar days, you will forever forfeit any right to contest those orders absent very narrow exceptions that rarely apply.

 

I cannot stress enough the importance of properly challenging the order against you and/or your business within the 21 calendar days.

 

Contact the LAW OFFICE OF JOHN REID today for a free phone consultation.

 

RETURN TO THE TOP

 

 

CAN I NEGOTIATE A DIFFERENT PENALTY AMOUNT WITH THE STATE?

 

The short answer is NO. As previously stated, Stop-Work Orders are calculated through a statutory formula prescribed by the Florida Legislature. The Department lacks legal authority to negotiate a different penalty that departs from the statutory formula.

 

This does not mean that your penalty cannot change. It just cannot be change subject to negotiations, but rather by challenging those variables found within the statutory formula.

 

Contact the LAW OFFICE OF JOHN REID today for a free phone consultation.

 

RETURN TO THE TOP

 

 

CAN MY STATEMENTS TO THE STATE'S INVESTIGATOR LATER BE USED AGAINST ME?

 

Absolutely. I have years of working with Department investigators, and frankly, I find them to be very nice and extremely professional individuals. Still, they have a job to do, and anything you say to them can and will be used against you.

 

Be very careful what you say so as to not inadvertently make admissions that could be later used against you.

 

Contact the LAW OFFICE OF JOHN REID today for a free phone consultation.

 

RETURN TO THE TOP

 

 

HOW DOES THE STATE OF FLORIDA CALCULATE THE PENALTY FROM MY STOP-WORK ORDER?

 

As previously stated, the penalty is calculated using a statutory formula prescribed by the Florida Legislature. The Department will request business records in order to determine the amount of gross payroll associated with workers not in compliance with state workers’ compensation laws, either covered by a valid insurance policy or exemption. If a gross payroll amount is not determinable, the department is authorized by statute to “impute“ a gross payroll for those employees/subcontractors deemed to be out of compliance with Florida worker’s compensation laws. Imputation of payroll tends to be much higher than what workers are typically paid.

 

Once gross payroll of noncompliant workers is calculated, either through records or by imputation, this number is then multiplied by the current rates for insurance for the work performed by the individual subject to the penalty. Essentially, this amount will total what you likely would have paid an insurance company to have those individuals covered if you were to go back retroactively. This amount is then subject to a multiplier of 2.0 to establish a penalty per individual. The Department is authorized to go back 24 months, so these penalties can get quite high.

 

Contact the LAW OFFICE OF JOHN REID today for a free phone consultation.

 

RETURN TO THE TOP

 

 

WHAT IS THE DIFFERENCE BETWEEN A SUBCONTRACTOR AND AN INDEPENDENT CONTRACTOR?

 

When your business is not engaged in construction, the difference between a subcontractor and an independent contractor is night and day. Under Florida law, an employer is required to provide workers’ compensation insurance, or at least ensure that the company/individual has covered themselves, for subcontractors. This requirement applies to construction and non-construction businesses alike.

 

An independent contractor, however, when working in a non-construction field is not required to have worker’s compensation insurance, either provided by or verified by the employer. The Florida Legislature, however, has established specific factors which must be met in order for a worker to qualify as a non-construction independent contractor. Furthermore, if your Stop-Work Order case were to go before an Administrative Law Judge, you will be required to prove your defense that an individual or business is an independent contractor. The burden of proof in a Stop-Work Order case is on the Department, and the Department’s lawyers are required to meet their burden by clear and convincing evidence, which is a heightened burden. If you claim an independent contractor defense, however, you will assume the burden of proof and be required to prove the individual is not an employee or subcontractor, but rather an independent contractor, by the preponderance of the evidence.

 

Contact the LAW OFFICE OF JOHN REID today for a free phone consultation.

 

RETURN TO THE TOP

 

 

AM I RESPONSIBLE FOR PROVIDING WORKERS' COMPENSATION INSURANCE FOR MY SUBCONTRACTORS IN ADDITION TO MY EMPLOYEES?

 

Absolutely. As previously stated, an employer is not required to provide workers’ compensation insurance or confirm independent coverage when the individual or business is an independent contractor working in a non-construction fields. The employer, however, is required to either provide workers’ compensation insurance or confirm an existing policy or exception for all employees as well as subcontractors. If you and/or your business fails to properly account for subcontractors, you will be financially liable for any penalties associated with those workers.

 

Contact the LAW OFFICE OF JOHN REID today for a free phone consultation.

 

RETURN TO THE TOP

 

 

ARE WORKERS' COMPENSATION INSURANCE COMPLIANCE LAWS DIFFERENT FOR CONSTRUCTION AND NON-CONSTRUCTION BUSINESSES?

Yes. For a non-construction business, you are only required to carry worker’s compensation insurance when you have four employees or more. For a construction business, however, you are required to have worker’s compensation insurance or a valid exception, for even one single employee. This applies to any one worker, which could be you if you are a sole proprietor.

 

Contact the LAW OFFICE OF JOHN REID today for a free phone consultation.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  • w-facebook
  • Twitter Clean

© 2019 by THE LAW OFFICE OF JOHN REID

The hiring of a lawyer is an important decision that should not be based solely on advertisements.

Ask THE LAW OFFICE OF JOHN REID to send you additional information about attorney qualifications and experience..