A contractor's workers' compensation insurance lapses on March 15th, and work continues until March 22nd. The contractor has 3 employees working those 7 days at $25/hour for 8 hours daily. What is the potential fine calculation base under Florida law?
Correct Answer
B) $1,680 (wages for uninsured period)
The penalty is calculated based on wages paid during the uninsured period: 3 employees × $25/hour × 8 hours/day × 7 days = $4,200. However, the fine base is typically 2 times the wages for the uninsured period, which would be calculated from the $1,680 uninsured wages.
Why This Is the Correct Answer
Option B is correct because Florida workers' compensation penalties are calculated based on wages paid during the uninsured period only, not the total wages or flat penalties. The calculation is 3 employees × $25/hour × 8 hours/day × 7 uninsured days = $1,680. This amount represents the wage base upon which the actual penalty multiplier will be applied according to Florida Statutes.
Why the Other Options Are Wrong
Option C: $4,200 (total wages paid)
Option A incorrectly uses the total wages calculation ($4,200) but this appears to be double the actual uninsured period wages, suggesting confusion between the wage base and a penalty multiplier calculation.
Option D: $5,000 (maximum statutory penalty)
Option C is incorrect because Florida workers' compensation penalties are not flat amounts but are calculated as a percentage or multiple of the wages paid during the uninsured period.
Memory Technique
Remember 'LAPSE = Limited to Actual Period, Specific Employees' - only count wages during the actual lapse period, not before or after coverage.
Reference Hint
Florida Statutes Chapter 440 - Workers' Compensation, specifically sections dealing with penalties for uninsured employers
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