A general contractor must maintain workers' compensation insurance coverage for all employees. What is the penalty for operating without required workers' compensation coverage in Florida?
Correct Answer
C) Stop work order and $1,000 per day plus $1,000 per employee
Florida law requires a stop work order and imposes penalties of $1,000 per day the violation continues plus $1,000 per employee working without coverage. This ensures compliance with worker protection requirements.
Why This Is the Correct Answer
Florida Statute 440.107 establishes severe penalties for operating without workers' compensation coverage to ensure worker protection. The law mandates an immediate stop work order to halt all construction activities. Additionally, it imposes dual financial penalties: $1,000 per day for each day the violation continues, plus $1,000 for each employee who worked without proper coverage. This comprehensive penalty structure ensures rapid compliance and protects workers from potential injury without insurance coverage.
Why the Other Options Are Wrong
Option A: $500 per day until coverage is obtained
This option significantly understates the financial penalties at only $500 per day and fails to include both the per-employee penalty ($1,000 per employee) and the mandatory stop work order required by Florida law.
Option D: $1,000 fine per employee
While license suspension may be a consequence, this option ignores the immediate financial penalties and stop work order that are the primary enforcement mechanisms under Florida Statute 440.107.
Memory Technique
Think 'STOP-1000-1000': STOP work order, plus $1,000 per day, plus $1,000 per employee. The penalties are as serious as the protection workers need.
Reference Hint
Florida Statute 440.107 - Workers' Compensation Law, Chapter on Penalties and Enforcement
More Business & Finance Questions
A general contractor purchases equipment worth $45,000 with a useful life of 9 years and no salvage value. Using straight-line depreciation, what is the annual depreciation expense?
What is the typical recommended coverage amount for general liability insurance for a small to medium-sized general contracting business?
A contractor estimates startup costs of $75,000 for equipment, $25,000 for initial inventory, $15,000 for insurance premiums, and $10,000 for working capital. They can finance 70% of the total. How much cash do they need?
When establishing professional relationships with architects and engineers, what is the most important factor for a general contractor to consider?
A partnership agreement for a construction company should address all of the following EXCEPT:
A contractor purchases a truck for $60,000. After 5 years, it has accumulated depreciation of $35,000. What is the truck's book value?
A contractor's business plan projects first-year revenue of $500,000 with a 15% net profit margin. If actual revenue is $450,000 with the same profit margin, what is the variance in net profit?
Using the Modified Accelerated Cost Recovery System (MACRS), construction equipment is typically depreciated over how many years?
A contractor is comparing financing options for equipment purchase. Option A: $80,000 cash purchase. Option B: $20,000 down, $65,000 financed at 6% for 4 years. What is the total cost of Option B?
A contractor purchases equipment using a capital lease with a present value of $120,000. How should this be recorded on the balance sheet?
People Also Study
Related Study Resources
Previous Question
During an interview for a project manager position, which question would be legally permissible to ask?
Next Question
A contractor pays a worker $2,400 per month and provides all tools, sets the work schedule, and supervises the work daily. The worker should most likely be classified as: