Kenneth B. Schwartz - West Palm Beach Trial and Appellate Attorney - Workers' Compensation - Stop-Work Orders -
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Stop-Work Orders in Florida
For Lack of Workers' Compensation Coverage

Did you know that the Florida Legislature has expressly stated that the failure of an employer to comply with workers' compensation coverage requirements poses an immediate danger to public health, safety, and welfare? It's true, and, as a result, there are severe penalties for companies that should have secured workers' compensation insurance coverage but have not done so. In 2009 alone, the Division of Workers' Compensation (DWC)'s Bureau of Compliance conducted 29,166 on-site investigations of employer worksites to determine employer compliance. They mean business!

What Could Happen If My Company Fails To Secure Necessary Coverage?

Whenever the Division of Workers' Compensation determines that an employer who is required to secure comp coverage for its employees has failed to do so, the Division is empowered to issue a Stop-Work Order on the employer requiring the cessation of all business operations. The Stop-Work Order applies not only to the location where the order is served on the employer, it is effective upon all employer worksites in the state for which the employer is not in compliance. The order will remain in effect until the employer can demonstrate that it has come into compliance with all coverage requirements and has paid any penalties assessed against it. In 2009, the DWC issued 1,945 Stop-Work Orders .

There Are Penalties, Too?

Yes, there are. In addition to all the money that a non-compliant employer could face due to the work stoppage, penalties could include a $1,000 per day penalty for each day that the employer conducts business operations that are in violation of a stop-work order and a $5,000 penalty for each employee of that employer who the employer represents to the Division or its insurance carrier as an independent contractor but who is determined not really to be one. The Division can also assess against the non-compliant employer a penalty equal to 1.5 times the amount the employer would have paid in premium at the correct rates for the employer's entire payroll during periods for which it failed to secure proper coverage within the preceding 3-year period. In 2009, the DWC assessed $49,772,529 in fines against non-compliant employers who failed to secure the payment of compensation or worked in violation of a Stop-Work Order.

I Have Workers' Compensation Coverage. Is My Business Safe?

Not necessarily. The definition of "securing" comp coverage means more than just purchasing a policy. The employer will be deemed to have failed to secure coverage if, for example, it materially understates or conceals payroll, materially misrepresents or conceals employee duties so as to avoid proper classification for premium calculations, or materially misrepresents or conceals information pertinent to the computation and application of an experience rating modification (E-Mod) factor.

What Should an Employer Do If It Receives a Business Records Request?

The Division has extremely broad investigative powers that are backed by the ability to have the employer held in contempt of court, either civilly or criminally. There are, however, limits on these powers. Investigators frequently ask for more information than they are entitled to obtain. If an investigator contacts your business, you should strongly consider contacting an attorney before responding to a business records request.

What Should an Employer Do If It Is Issued a Stop-Work Order?

Contact an attorney immediately. Why? Because a knowledgeable attorney can advise the business owner how best to get the Stop-Work Order released as quickly and with as few penalties as possible. The Division takes these matters very seriously, and business owners should, too.

What Should an Employer Expect if One Contacts an Experienced Attorney about a Stop-Work Order?

The answer will largely depend on the goals of the people seeking representation. Some businesses, for example, are new and cannot therefore afford to simply pay the assessed amount, so they call an attorney to see whether they'll have to fold the business or fight the order. Even if they want to pay to fight, though, the timing of the call to the attorney could make all the difference in their ability to fight. So, contact an attorney as soon as you get any formal documentation from the DFS, to ensure that you have not let an important deadline pass. In that case, Attorney Schwartz can offer advice in a one-time consultation for an hourly rate, primarily to discuss available options for the business owners going forward. On the other hand, some businesses are viable and can pay the assessed amounts but don't think that the penalties were properly computed or that some other error exists that could help them avoid liability. In these cases, formal legal representation would be required, so the client would be required to provide an up-front retainer (to be held in trust) that would roughly equate to the first two month's estimated legal fees. Those clients would then be billed monthly, leaving the retainer until the end of the case (which amount would get refunded, if not used). For further explanation, please contact our office at your leisure.


Did you know that the law governing Stop Work Orders changed recently???


Many things changed as a result of the new amendments to the statute, which is even more reason you should contact an attorney immediately. Why? Because a knowledgeable attorney--one who knows the recent changes in the law--can advise the business owner how best to get the Stop-Work Order released as quickly and with as few penalties as possible. The Division takes these matters very seriously, and business owners should, too.

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Kenneth B. Schwartz, Esq., represents employers, insurance carriers, and aggrieved individuals in litigation, trials, and appeals of business and employment matters, including contract disputes, enforcement of noncompete and trade secret agreements, allegations of wrongful termination and discrimination, workers' compensation claims, Rule Nisi enforcement proceedings, resolution of stop-work orders and premium disputes, and construction defect litigation.

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