Penalties And Interest For Late Payment Of Benefits

Table of Contents

penalties1
  1. What do I do if the carrier clearly owes me benefits but has chosen not to pay?
  2. Who gets the penalty money?
  3. Interest

What do I do if the carrier clearly owes me benefits but has chosen not to pay?

Penalties are specified in California Labor Code Sec. 5814. The law recognizes that the insurance carrier(s) may at times clearly be liable to pay benefits but yet has choosen not to do so. Under these circumstances, the law imposes a penalty of up to 25% on the amount unreasonably not paid or paid late but not more than $10,000.00 per act.

Who gets the penalty money?

penalties2Simply put: the injured worker receives the penalty. So, if the carrier clearly owes you money but has not paid, you will not only receive the amount owing, but also a penalty of up to $10,000.00 per act.

PLEASE NOTE THAT THE MAXIMUM IS $10,000 PENALTY PER ACT!!!!

The law states that for each “separate and distinct act” of unreasonable delay or refusal to pay, you the injured worker can collect up to $10,000 for each act so that if the carrier has committed four (4) “separate and distinct acts” of unreasonable delay or refusal, you can collect up to $40,000.00 (i.e. 4 acts x $10,000.00 maximum for each one).

Interest

In addition to penalty, you the injured worker can collect interest on the amount of benefits ordered paid by the court. See California Labor Code Sec. 5800. The law mandates that interest be paid at the same rate as the civil court judgments (e.g., 10% per year). So, if you have received an award from the Workers’ Compensation Appeals Board and the carrier has not paid it or has paid it without interest, you may be able to seek penalties and interest.

GIVE US FONG BROTHERS A CALL NOW!!!! We will answer your question for free to see if you have a case for seeking penalties. THE CALL AND CONSULTATION ARE FREE!!!!!! Please note that the carrier will almost always not pay the penalties and/or interest on its own because it has no incentive to do so voluntarily. In fact, it has the incentive to keep silent on its violations so as not to draw public attention or governmental scrutiny. For example, I had to take the carrier to the high court to enforce a penalty, and the Court of Appeal publicized the violation and awarded my client a penalty.

See Rucker v. Workers’ Comp. App. Board, (2000) 82 Cal. App. 4th 152.

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