12-0041. IN THE MATTER OF THE PETITION FOR A FINDING OF THE FAILURE TO INSURE WORKERS' COMPENSATION LIABILITY AND ASSESSMENT OF A CIVIL PENALTY AGAINST, ANY DAY NOW, INC. dba MOOSEHEAD SALOON; Daniel Deboer, And Kyne DeBoer, Employer, Respondents.

Court:Alaska
 
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Alaska Workers Compensation Decisions 2012. Workers' Compensation Board 12-0041. IN THE MATTER OF THE PETITION FOR A FINDING OF THE FAILURE TO INSURE WORKERS' COMPENSATION LIABILITY AND ASSESSMENT OF A CIVIL PENALTY AGAINST, ANY DAY NOW, INC. dba MOOSEHEAD SALOON; Daniel Deboer, And Kyne DeBoer, Employer, Respondents IN THE MATTER OF THE PETITION FOR A FINDING OF THE FAILURE TO INSURE WORKERS' COMPENSATION LIABILITY AND ASSESSMENT OF A CIVIL PENALTY AGAINST, ANY DAY NOW, INC. dba MOOSEHEAD SALOON; Daniel Deboer, And Kyne DeBoer, Employer, Respondents.AWCB Decision No.12-0041Filed with AWCB Anchorage, Alaskaon March 6, 2012AWCB Case No. 700003631FINAL DECISION AND ORDERThe Petition for Finding of Failure to Insure and Assessment of Civil Penalties against Any Day Now, Inc. doing business as Moosehead Saloon (Employer) was heard on October 26, 2011, in Anchorage, Alaska. Kyle Thompson, Investigator for the Special Investigations Unit of the Workers' Compensation Division (Division), Alaska Department of Labor and Workforce Development (DOL), represented the State of Alaska and testified. Daniel Deboer and Kyne Deboer, appeared and testified on behalf of Employer. The record closed at the hearing's conclusion on October 26, 2011. ISSUES The Division contends Any Day Now, Inc. operated a business, Moosehead Saloon, using employee labor when not insured for workers' compensation liability, failed to provide proof of workers' compensation liability coverage, and failed to insure for workers' compensation liability during the period November 7, 2005 through and including April 5, 2010. The Division contends Employer should be assessed a civil penalty for this uninsured period. Employer does not dispute these contentions, but asks that mitigating factors be considered in any penalty assessment. 1. Did Employer fail to file evidence of compliance with workers' compensation laws during the period November 7, 2005 through and including April 5, 2010? 2. Did Employer fail to provide workers' compensation insurance coverage for its employees during the period November 7, 2005 through and including April 5, 2010? 3. Should Employer be assessed a civil penalty for failure to insure during the period November 7, 2005 through and including April 5, 2010, and if so, in what amount? FINDINGS OF FACTS Evaluation of the record as a whole establishes the following facts and factual conclusions by a preponderance of the evidence:
1) Any Day Now, Inc. is a duly authorized, active Alaska corporation, in good standing, having received its Certificate of Incorporation on April 10, 2002. (Certificate of Incorporation, April 10, 2002, Alaska Department of Commerce, Business Corporation Information, April 4, 2011, Exhibit 1).
2) Daniel Deboer has at all times since 2002 been its President, and one of its Directors. Kyna Deboer has at all times since 2002 been its Secretary, Treasurer and Director. Documentary evidence reflects Daniel and Kyna Deboer may each at one time owned 42% of the corporate shares. However, the testimony at hearing reflected Daniel and Kyna Deboer now each own 50% of the corporate shares. (Alaska Department of Commerce, Business Corporation Information, April 4, 2011, Exhibit 1; Thompson).
3) Any Day Now, Inc. has operated Moosehead Saloon since on or about April 10, 2002. Its business license has been for accommodation and food services, specifically operating a bar and selling alcoholic beverages. (Business License Detail, Initial Biennial Report, April 26, 2002, Exhibit 1 at 1-3, 10).
4) Executive officer waivers for Daniel and Kyna Deboer became effective June 18, 2010. (Employer Policy Information, Exhibit 3 at 2; Thompson).
5) A routine records check for a current workers' compensation policy in the Proof of Coverage databases maintained by the National Council for Compensation Insurance (NCCI) revealed a lapse in Employer's previous policy of workers' compensation insurance beginning November 19, 2003 through and including April 5, 2010. Seamless coverage has been maintained since April 6, 2010, through date of hearing. (NCCI Proof of Coverage Search results, Exhibit 4; Thompson).
6) On April 12, 2011, the Division first contacted Employer at its place of business. No proof of insurance was posted as required. On April 22, 2011, the Division sent Employer a petition and discovery demand. The Division's petition alleged Employer was uninsured from November 7, 2005, not from November 19, 2003. (Thompson; Petition).
7) Because the Division never amended its Petition to allege and thus provide Employer notice of an alleged failure to insure prior to November 7, 2005, only the period for which the petition alleged a failure to insure, November 7, 2005 through April 5, 2010, is considered here. (Compare Petition with Investigation Summary and Thompson testimony).
8) At hearing the Division alleged Employer had been uninsured from November 19, 2003, although never amended its Petition to allege, and thus provide Employer notice, of an alleged failure to insure prior to November 7, 2005. (Record).
9) On May 2, 2011, Employer responded to the initial discovery demand. (Exhibits 5 and 6). A timely response to a later discovery request was also received from Employer. (Exhibit 6; Thompson).
10) Employment Security Division (ESD) records reflect Employer utilized between 1 and 9 employees during any given quarter from the time its workers' compensation policy of insurance lapsed, and April 5, 2010, when Employer reinstated a workers' compensation policy of insurance. (Employment Security Division Tax Wage List by Employee, Exhibit 2, pp 2-9; Thompson).
11) Employer was uninsured for 1611 calendar days from November 7, 2005 through April 5, 2010. (Thompson).
12) Based upon its current policy premium, the daily cost to Employer to insure is approximately $12.37. (Exhibit 8; Thompson).
13) Based on this rate, for the 1611 calendar days Employer was uninsured beginning November 7, 2005, it would have paid an insurance premium of approximately $19,928.07. (Thompson).
14) Employer's records reflect it employed 27 different individuals from November, 2005 through April 5, 2010. (Thompson; Exhibits 2, 6, 7, 9).
15) Based on the employment records provided by Employer and records from ESD, the best evidence reflects Employer operated with employee labor for 1433 uninsured employee work days during the period November 7, 2005 through April 5, 2010. (Thompson; Exhibits 2, 6, 7, 9).
16) Employer corrected its lapse in coverage prior to contact with the Division. (Record; Thompson).
17) Employer responded timely to the Division's discovery demands. (Thompson).
18) There have been no reported work injuries since Employer began operating in April, 2002. (Thompson).
19) On February 28, 2010, 8 AAC 45.176, establishing a penalty matrix for uninsured employers, became effective. (Register 193).
20) Under 8 AAC 45.176's penalty matrix, Employer operated without workers' compensation insurance for 36 calendar days, from February 28, 2010 through April 5, 2010. (Record).
21) Under the penalty matrix effective February 28, 2010, Employer had one aggravating factor which must be considered in setting the civil penalty for the uninsured period from February 28, 2010 through April 5, 2010: its failure to insure for a period in excess of 180 days. (Judgment).
22) Employer had an opportunity to file evidence of compliance, but failed to file proof of workers' compensation insurance coverage during the period November 7, 2005 through April 5, 2010. (Record; Thompson).
23) Employer concedes it can afford to make payments toward a civil penalty at
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