What Penalties Do Florida Employers Face for Not Paying Workers’ Comp Insurance Premiums?
Florida’s workers’ compensation program was created to help injured employees get quick access to medical care after work-related injuries. In most cases, using workers’ comp benefits leads to an employee’s speedy recovery and return to the workplace, all at a reasonable cost to the employer.
Most employers in the Sunshine State have a legal obligation to carry workers’ comp insurance to provide their injured employees with necessary coverage (typically, workers’ comp benefits cover the injured individual’s lost wages and cost of medical treatment).
Florida employers are responsible for paying the entirety of the workers’ compensation insurance premiums. But what happens if the employer fails to pay insurance premiums?
Florida Employer Arrested for Evading Paying $200k in Workers’ Compensation Insurance Premiums
A Florida business owner was accused of evading paying about $200,000 in workers’ comp insurance premiums over the course of 12 months, according to a report by the Insurance Journal citing a statement from the Florida Department of Financial Services.
On February 6, Chief Financial Officer (CFO) Jimmy Patronis announced the arrest of the owner of YYCS Enterprises, Inc., for workers’ comp fraud. Santos Y. Cardona was arrested after his company allegedly conducted more than $1 million in payroll but reported only $59,000 on their workers’ comp insurance policy.
Investigators found that Cardona allegedly concealed the company’s payroll information to avoid paying higher workers’ comp premiums. Financial records from a check-cashing store in Florida revealed that the employer cashed over $1 million in payroll checks.
Then, he reported payroll of only $59,000 to avoid paying nearly $200,000 in workers’ compensation insurance premiums. The employer was booked into Lee County Jail on charges of workers’ compensation fraud and scheme to defraud. The Florida employer faces up to 25 years in prison.
Penalties for Not Paying Insurance Premiums and Other Workers’ Comp Violations in Florida
An employer’s failure to comply with Florida’s workers’ comp law during the workers’ compensation claim process could result in penalties. The following fraudulent activities are considered criminal violations of Florida Statute 440.105 and constitute a felony. The degree (first, second, or third) of the crime depends on the monetary value of the fraud:
- Not carrying any workers’ comp coverage, if required;
- Filing an altered or fraudulent certificate as proof of coverage for workers’ comp insurance;
- Submitting a false “exemption” certificate;
- Misclassifying employees to pay lower premiums;
- Treating workers as subcontractors to hide or conceal payroll; and
- Violating a stop-work order.
In Florida, felonies of the first degree carry a fine of up to $10,000 and up to 30 years in prison. Penalties for a felony of the second degree include prison time of up to 15 years and a fine that does not exceed $10,000. Felonies of the third degree are punishable by a fine of up to $5,000 and a maximum of five years in prison.
If you work in Florida and have been diagnosed with a work-related injury or illness, but your employer is refusing to provide workers’ comp benefits, he or she may face criminal penalties for violating the state’s workers’ comp law. Contact Kobal Law to discuss your unique situation. Call our Tampa workers’ compensation attorney at 813-873-2440.