Notice of Development of Rulemaking

DEPARTMENT OF FINANCIAL SERVICES
Division of Worker's Compensation
RULE NO: RULE TITLE
69L-6.028: Procedures for Imputing Payroll and Penalty Calculations
PURPOSE AND EFFECT: The purpose and effect of the proposed rule amendment is to provide the Department alternative means and methods by which it may calculate an employer’s imputed payroll and penalty, to clarify the timeframe within which such imputation may occur, and to define the meaning of “non-compliance” within the meaning of the rule. Additionally, the proposed rule amendment deletes language from the existing rule regarding penalty assessments for periods of noncompliance that occurred prior to October 1, 2003.
SUBJECT AREA TO BE ADDRESSED: Imputing payroll for employer penalty calculations under Section 440.107(7)(e), Florida Statutes.
SPECIFIC AUTHORITY: 440.107(9), 440.591 FS.
LAW IMPLEMENTED: 440.107(7)(e) FS.
A RULE DEVELOPMENT WORKSHOP WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:
DATE AND TIME: Monday, November 10, 2008, 10:00 a.m.
PLACE: 104 J Hartman Bldg., 2012 Capital Circle Southeast, Tallahassee, FL.
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: Tasha Carter at (850)413-1878. 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 DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Tasha Carter, Bureau Chief, Bureau of Compliance, Department of Financial Services, 200 East Gaines Street, Tallahassee, Florida 32399-4228, (850)413-1878

THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS:

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 five, but before the expiration of twenty at any time after the expiration of fifteen 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)(2) 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 for the portion of the period of the employer’s non-compliance occurring on or after October 1, 2003 shall be calculated as follows:

(a) For each employee, employees other than corporate officers, for each employee 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, unless the employer’s business records demonstrate the assignment of an alternative workers’ compensation classification code, such classification code will be applicable to all employees. However, the department may assign an alternative workers’ compensation classification code for an employee based upon the investigator’s physical observation of that employee’s activities.

(3) If subsequent to imputation of weekly payroll pursuant to subsection (2) herein, but before and only until the expiration of forty-five calendar days from the receipt by the employer of written request to produce business records, the employer provides business records sufficient for the department to determine the employer’s payroll for the period requested for the calculation of the penalty pursuant to Section 440.107(7)(e), F.S., the department shall recalculate the employer’s penalty to reflect the payroll information provided in such business records.

(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. Where periods of the employer’s non-compliance occurred prior to October 1, 2003, and the employer fails to provide business records sufficient to enable the department to determine the employer’s payroll for periods of non-compliance prior to October 1, 2003, for purposes of calculating the penalty to be assessed against the employer for periods of non-compliance prior to October 1, 2003, the department shall assess against the employer a penalty of $100 per day for each and every calendar day in the period of non-compliance occurring prior to October 1, 2003, the employer was not in compliance, pursuant to Section 440.107(5), F.S. (2002).

Specific Authority 440.107(9), 440.591 FS. Law Implemented 440.107(5)(2002), 440.107(7)(e) FS. History–New 7-12-05, Amended 8-31-06,_________.