COMPLIANCE ECONOMIC REVIEW
Pursuant to section 120.745(5), Florida Statutes
RULE 69L-6.015, FLORIDA ADMINISTRATIVE CODE
RECORD MAINTENANCE AND PRODUCTION REQUIREMENTS FOR EMPLOYERS
DEPARTMENT OF FINANCIAL SERVICES
DIVISION OF WORKERS’ COMPENSATION
April 2013
JUSTIFICATION FOR THE RULE
Subsection 440.107(5), F.S., states the Department shall specify by rule the business records that
employers must maintain and produce to comply with section 440.107, F.S., Department Powers to
Enforce Employer Compliance with Coverage Requirements. The Division adopted Rule 69L-6.015,
F.A.C., which identifies the specific records an employer must maintain to comply with this statutory
provision.
After further calculation, this rule does not meet the minimum requirements for development of a
Compliance Economic Review.
STATEMENT OF ESTIMATED REGULATORY COSTS
1.
Direct or indirect economic impact:
a. Adverse impact on economic growth, private sector job creation or employment, or private
sector investment, which is more than $1 million over five years;
b. Adverse impact on business competitiveness, including the ability of persons doing business in
Florida to compete with persons in other states or domestic markets, which is cumulatively
more than $1 million over five years;
c. Likelihood of the regulatory cost, including transactional costs, of more than $1 million
cumulatively over five years.
BACKGROUND:
Section 440.107 F.S., establishes the Department’s enforcement powers in ensuring that employers
comply with their statutory obligations to obtain appropriate workers’ compensation insurance
coverage for their employees. The Division conducts investigations to determine employer compliance
and assesses penalties against employers who fail to meet their statutory obligations. This section
requires that the department shall assess against any employer who has failed to secure the payment of
compensation as required by this chapter a penalty equal to 1.5 times the amount the employer would
have paid in premium when applying approved manual rates to the employer’s payroll during periods
for which it failed to secure the payment of workers’ compensation required by this chapter within the
preceding 3-year period or $1,000, whichever is greater. The Department must utilize the employer’s
business records for the preceding three year period to calculate the penalty. Section 440.107(5), F.S.,
states the Department shall specify the business records to be maintained. Rule 69L-6.015, F.A.C.,
specifies the records which must be maintained and produced for the Division to determine whether an
employer is in compliance with the workers’ compensation coverage requirements and to calculate the
non-compliance penalty. The Division wrote the rule so that the business records that must be
maintained by an employer are consistent with the records maintenance requirements of other federal
and state requirements.
Economic Analysis: The records required to be maintained for three prior years by the Division include
employment records, tax records, account records, disbursements, employee leasing company records,
subcontractor invoices, workers compensation insurance and certificates of election to be exempt, and
job contracts. These are the same records as required to be maintained by employers for the IRS, U.S.
Department of Labor, and Florida Unemployment Compensation.
The filing requirements for the IRS require record retention of at least four years, U.S. Department of
Labor for at least three years, and Florida Unemployment records for at least five years. Therefore, the
Department’s record retention requirements do not exceed the requirements of other federal and state
agencies and do not provide any additional cost to maintain records for purposes of this rule.
The remaining information required to be maintained is the workers’ compensation exemption and
policy records. This information is available to the employer directly through the Division’s databases.
There are costs to produce records for the calculation of a penalty for the employer found in violation of
workers’ compensation laws. These costs include the time for someone to assimilate and copy the
records. The average record count is 225 pages. It takes an average employer four hours to gather the
records at $15 per hour/labor = $60. The copying cost is estimated at .08 pages = $18.00. We issue
approximately 2,500 enforcement actions per year. 2,500 x $78 = $195,000.
For this reason, it is highly unlikely that the rule will have an adverse impact on economic growth,
private sector job creation or employment, or private sector investment, which is more than $1 million
over five years; have an adverse impact on business competitiveness, including the ability of persons
doing business in Florida to compete with persons in other states or domestic markets, which is
cumulatively more than $1 million over five years; or likely that the regulatory cost, including
transactional costs, will equal more than $1 million cumulatively over five years.
2.
Types and numbers of individuals or entities likely to be required to comply with these rules: All
Florida employers meeting the minimum requirements to maintain workers’ compensation
insurance are required to comply with the recordkeeping requirements of these rules and statutes.
There are, on an annual basis, approximately 2,500 employers that must produce these records to
the division.
3.
Cost to the Division and other state or local governments to implement and enforce the rule: The
Division’s Bureau of Compliance employs 134 staff members who implement and enforce the
Compliance rules. However, there are no direct Division costs related to this specific rule
requirement.
4.
Effect on state or local revenues: This rule has no known impact on state or local revenues.
5.
Impact on small businesses: There is no impact to small businesses due to the minimal costs in
copying and providing business records to the Department.
6.
Impact on small counties and small cities: There is no impact on small counties and small cities.
METHODOLOGY
The average costs to produce records for the calculation of a penalty for an employer who has been out
of compliance equals the average number of pages of records submitted for review multiplied by the
average charge for making a copy of a record at a copy store.