A serious work-related injury or illness can put an incredible financial strain on a family. Workers’ comp helps to alleviate the burden. People need their full and fair workers’ compensation benefits without any unjustified delay. Getting approved for workers’ comp can bring a great sense of relief. Disability payments for workers’ comp are generally paid bi-weekly in California.
You may want to ask: What happens if your workers’ comp payment is late? The quick answer is that you have the right to take action and seek additional compensation in the form of a penalty. In this article, our Fresno work injury attorneydiscusses California state law and the key things that people should know about their rights if their workers’ comp payment was late.
Penalty Phase #1: Late Payments
A workers’ compensation insurer has a duty to make all temporary disability payments and permanent disability payments in a timely manner. Under California Labor Code § 4650, an immediate 10% penalty is imposed whenever a payment is late. The 10% penalty applies if:
- Initial disability payments are not made within 14 days of the “start” of payments; or
- Any subsequent disability payment is not made two weeks after that.
The 10% penalty is based on the actual payment owed to the injured worker. For example, if an injured worker should have received a $1,000 temporary disability payment, they may be entitled to an additional $100 (10%) penalty for late payment.
In California, insurers can face heightened penalties for payments if the delay was unreasonable and especially long. Under California Labor Code § 5814, an insurer may face a 25% penalty for this type of delay. This penalty applies to all payments that have been unreasonably delayed, denied, or otherwise refused. The maximum penalty for a violation of LC § 5814 is $10,000. What constitutes an unreasonable delay under LC § 5814?
There is no clear, single definition within the California statute. Instead, the term “unreasonable delay” is interpreted on a case-by-case basis. That being said, as a general rule, an insurer that rectifies an error (delayed payment or underpayment) within 90 days of receiving an initial notice will generally be spared from liability under LC § 5814. To properly rectify such an error, a workers’ comp insurer must pay the full original amount owed plus the 10% penalty under LC § 4650
A delay in workers’ comp benefits can put a serious financial burden on an injured worker and their family. As an experienced workers’ comp lawyer, Joseph C. Yrulegui protects the rights and interests of injured workers. If you have questions about delayed payments or underpayment of benefits, we are ready to help. Contact us today to set up your no-obligation initial consultation. We represent injured workers in Fresno, Sanger, Clovis, Visalia, Merced, Modesto, and throughout the region.