In re Hosier, 123120 ARWC, UE-2017-11-346

Docket Nº:UE-2017-11-346
Case Date:December 31, 2020
No. UE-2017-11-346
Arkansas Workers Compensation
Before the Arkansas Workers' Compensation Commission
December 31, 2020
         Hearing before Administrative Law Judge Barbara W. Webb in Little Rock, Pulaski County, Arkansas.           Commission’s Compliance Division appeared by and through Patrick Neal, Compliance Division investigator, and Honorable David Pake, Attorney-at-Law.           Employer appeared by and through Ms. Beverly Hosier, pro se.           HONORABLE BARBARA WEBB, Administrative Law Judge.          STATEMENT OF THE CASE          Following an investigation by the Compliance Division of the Arkansas Workers’ Compensation Commission, the employer was charged with violations of the Arkansas Workers Compensation Law; specifically, failing and/or refusing to secure workers’ compensation coverage for its employees. Following unsuccessful efforts by the Compliance Division to ensure coverage for the employer’s employees, and after communication advising the employer that it was in violation of the law, the matter was ultimately referred to this Administrative Law Judge for a review and determination concerning what action, if any, should be taken.          On May 8, 2019, the initial Order and Notice of Hearing was filed, charging the employer with non-compliance of the law and assessing the maximum statutory penalty of Ten Thousand Dollars ($10,000.00) pursuant to Ark. Code Ann. § 11-9-406. (Commission Exhibit 1). The Order provided that it would become final twenty (20) days after the employer’s receipt, unless a written request for a hearing was filed with the Commission. In addition, the employer was directed and ordered to obtain and show proof of workers’ compensation insurance within the same twenty (20) days, unless a written request for a hearing was filed, at which time the employer would be permitted to appear on June 25, 2019, and show cause, if any there be, why the employer should not be required to obtain workers’ compensation insurance and/or pay the penalty assessed. A written request for hearing was made by Ms. Hosier. A Motion for Continuance was submitted by David Pake. The case was rescheduled to July 23, 2019, and was rescheduled again to August 27, 2019.          A hearing was conducted on August 29, 2019, in this case. Testimony was offered on behalf of the Compliance Division by Mr. Patrick Neal. Beverly Hosier and Amber Tisdale testified on behalf of the Employer. The record consists of the transcript of the August 29, 2019, hearing, consisting of the testimony of the witnesses, Exhibits I-IV from the Compliance Division, and Respondent-Employer Exhibits 1-2.          By agreement of the parties, the issues litigated at the hearing were:
(1) Whether Kleen Freex is an Employer has a sufficient number of employees to require her to carry workers’ compensation coverage.
(2) Whether Kleen Freex was in compliance with the Arkansas Workers’ Compensation Act during the period of time relevant to these proceedings
         The Respondent contends that she uses independent contractors to perform cleaning contracts when she is not able to perform them herself.          Beverly Hosier testified that she is a sole proprietor. She also testified that she is also a personal trainer and a nutrition specialist. She does business as Kleen Freex and has been in business since 2015. She testified that she has no employees but uses subcontractors. She explained that she injured her foot and so she would refer her clients to other people to clean their homes. She identified Amber Tisdale as one (1) of five (5) people that she would call so the client’s work did not get behind. She provide1099’s and the contract is verbal. She also explained that on a large deep-cleaning job, she might call one of her friends to bring their supplies and help her out. She has never had workers’ compensation but has paid for her subcontractors to apply for Certificates of Non-Coverage. She was advised by a female employee of the Workers’ Compensation Commission about the Certificate process. She explained that the other women bring their own supplies and only work when she needs extra help on her existing clients. They are paid in cash directly by the client. If the client leaves a check, she cashes the check and pays the subcontractor. She carried liability insurance but explained that if the subcontractor broke a lamp, her liability insurance did not cover them. She explained that her business has grown and that in 2019, she might clean six (6) residential houses and a few...

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