Fla. Officials Put Wraps on Workers’ Comp Sweeps; 100 SWOs Written to State Employers

July 29, 2005

Investigators from Florida’s Department of Financial Services Division of Workers’ Compensation announced the results of a recent two-day sweep of construction sites in the state.

Officials said 848 site visits were made during the sweeps resulting in 100 stop work orders (SWOs) being written against employers without legitimate workers’ compensation coverage.

Under state law, businesses engaged in the construction industry with one or more employees must provide workers’ comp coverage, which protects workers who are injured or killed on the job.

“Contractors who provide coverage to protect their workers continually tell us how difficult it is to compete with those who cheat the system,” said Florida’s Chief Financial Officer Tom Gallagher. “We have seen workers’ compensation rates fall and the availability of coverage increase in recent years largely due to the efforts of our investigators to root out fraud and abuse.”

Twenty-five supervisors and investigators from Miami, Plantation, & Ft. Myers conducted sweeps in Miami. That operation made 333 contacts and wrote 35 SWOs. Thirty-six supervisors and investigators from Jacksonville, Pensacola, Orlando and Tampa conducted sweeps in the Orlando area. They made 515 contacts and wrote 65 SWOs. In many cases where it was difficult to establish whether adequate coverage had been obtained, a request for business records was issued.

Under an SWO, a business must immediately cease all operations. The SWO is lifted once the employer obtains the proper coverage and pays a civil penalty equal to the amount of 1.5 times the workers’ comp premiums avoided. Employers who violate an SWO face a penalty of $1,000 per day of violation and may also face criminal charges.

During the Miami area sweep an investigator found three men installing concrete fixtures at a home in Homestead. None of the men had workers’ comp coverage and an SWO and a request for records was issued. Any fines in the case should be minor as the stone design company only began business in late June.

That was not the case in an Orlando area investigation. Two workers engaged in block work had a hazy recollection of whom they worked for, only being able to remember the first name of their employer. An alleged employer eventually came to the site, but when instructed of the ramifications of the insurance fraud laws, he admitted they were his subcontractor’s employees and summoned that person to the site.

It was then discovered this employer had approximately 30 employees at other job sites that were also not covered. A subsequent review of his business records revealed more than $500,000 had been paid to workers, without providing workers’ comp coverage, resulting in a fine of over $167,000.

During the 2003 legislative session, Gallagher called on lawmakers to make several important reforms to the workers’ comp system in an effort to stem the tide of rising premiums.

As part of the reforms, the Division of Workers’ Compensation was granted greater enforcement authority to ensure businesses provide coverage for their employees. Many of the violations uncovered during this recent sweep fall under the new authority.

Since the reforms were passed, workers’ comp rates have fallen overall by more than 19 percent statewide.

Was this article valuable?

Here are more articles you may enjoy.