By Adrian Middleton, Sword & Shield, PLLC · Updated Friday, October 9, 2026
The statute
Section 440.105(4)(a)3, Florida Statutes, makes it unlawful for any employer to knowingly fail to secure workers' compensation insurance coverage if required to do so by this chapter. Section 440.105(4) states that whoever violates the subsection commits insurance fraud, punishable under paragraph (f):
| Monetary value of the violation | Degree | Maximum under s. 775.082 |
|---|---|---|
| Less than $20,000 | Third-degree felony | 5 years |
| $20,000 or more, less than $100,000 | Second-degree felony | 15 years |
| $100,000 or more | First-degree felony | 30 years |
The same subsection criminalizes presenting false evidence of compliance (4)(a)1, deducting premium from employees' pay (4)(a)2, false statements to obtain coverage or avoid premium (4)(b)5, misrepresenting or concealing payroll or classification to reduce premium (4)(b)6, presenting false evidence of compliance or exemption eligibility (4)(b)7, and knowingly violating a stop-work order (4)(b)8.
What 'monetary value' means
The Department and prosecutors generally measure the value of a failure-to-secure case by the premium that was avoided: the amount the employer should have paid to a carrier for the uninsured payroll. That is the same number the penalty worksheet computes before it is doubled. A penalty worksheet showing $60,000 of avoided premium is, on its face, a second-degree felony referral. That is one reason the records decision matters.
Who makes the referral
The Bureau of Compliance investigator who served your order works for the Division of Workers' Compensation. Criminal cases are investigated by the Division of Investigative and Forensic Services (formerly the Division of Insurance Fraud) in the same Department, and section 440.105(1)(a) directs the Bureau of Workers' Compensation Fraud to report violations to the State Attorney, who must explain any decision not to prosecute within 60 days. Compliance investigators refer cases up the hall. I worked those referrals from both sides, including large payroll check-cashing schemes.
The patterns that get referred
- Cash payroll or check-cashing-store payroll on a scale that cannot be explained as occasional.
- A policy with a reported payroll a fraction of the payroll shown in the bank records (the s. 440.107(2) 'deemed' case).
- Shell subcontractors: entities with a certificate of exemption and no real business, used to launder payroll.
- Altered or fabricated certificates of insurance or exemption.
- Continuing to work after the order was posted.
- A second violation within five years, which section 440.107(7)(d)2 deems a knowing act under section 440.105.
Why you do not give a statement
The element the State has to prove is that you knowingly failed to secure coverage. The investigator's field interview is designed to establish knowledge: Did you know you needed a policy? Have you had one before? Why did it lapse? How long have these workers been with you? How do you pay them? Every honest answer is an element of the offense, and every dishonest answer is a separate one. The only correct answer is that your attorney will be in contact.
The practical point
Most employers who are served never hear from a prosecutor. The ones who do are, overwhelmingly, the ones who talked, who kept working, or who produced records without knowing what was in them.
Other criminal provisions in play
- Section 440.10(1)(g): failing to obtain a Florida policy or endorsement for employees engaged in work in Florida is a second-degree felony.
- Section 440.05(4): a false notice of election to be exempt is a third-degree felony.
- Section 817.234: general insurance fraud, often charged alongside Chapter 440 offenses.
- Section 489.127: unlicensed contracting, when the licensing referral turns up work outside the license.
If the investigator has already asked you questions, call now. What was said can still be managed.
(850) 766-6825Criminal referral defenseQuestions
I did not know I needed coverage. Is that a defense?+
Knowledge is an element the State must prove. Ignorance of the law is not a defense in the abstract, but the facts around what you knew and when are the whole case, and they should be developed by counsel, not volunteered to an investigator.
Will paying the penalty end the criminal exposure?+
Paying the penalty resolves the civil case. It does not bind the State Attorney. In practice, prompt compliance, coverage and payment weigh heavily against a referral being pursued, and we use them that way.
Can my workers be charged?+
Section 440.105(4)(b)9 criminalizes presenting false identification to obtain employment or benefits. Workers who used false identities are exposed, and investigators know it, which is one reason workers' statements on site are unreliable.