If Your Workers’ Comp Payment Is Overdue, You May Be Entitled To Collect A Penalty

BY: Koszdin | Friday, December 21, 2018.

California law requires insurance companies to pay penalties to injured workers when insurers make a late workers’ comp payment. Long story short, the penalty for an insurance company’s failure to make a payment in a timely manner is between 10 and 25 percent depending on the value of your claim and reason for the delay.

Our Los Angeles workplace injuries attorney from Koszdin, Fields & Sherry explains that you may be entitled to collect the 10-percent penalty for the late payment of:

  • temporary disability benefits; or
  • permanent disability benefits.

If your employer’s insurance company, on the other hand, fails to make an overdue payment of any of the following, you may be entitled to a penalty of up to 25 percent:

  • temporary disability benefits;
  • permanent disability benefits;
  • medical treatment;
  • settlement funds;
  • mileage reimbursement; or
  • any other payment the insurance company has a legal obligation to make.

How to collect the 10- or 25-percent penalty for late workers’ comp payments?

Our experienced workplace injuries attorney in Los Angeles explains that regardless of what penalty you may be entitled to, the penalty is always calculated based on the amount that was overdue. If your employer’s insurer fails to make a workers’ comp temporary or permanent disability payment in a timely manner, the 10-percent penalty will apply automatically.

In order for the 25-percent penalty to apply, you will have to demonstrate proof that the overdue payment was late and the delay was unreasonable. “Why do these penalties exist in the first place?” you may be wondering. These penalties are imposed against insurance companies to discourage them from delaying workers’ comp payments as well as to ensure that the injured worker receives the benefits he or she deserves without having to suffer economic hardship from the lack of financial support.

What is considered a late workers’ comp payment?

If this sounds confusing, do not worry. Let our workplace injuries attorney Los Angeles explain. If your employer’s insurer fails to make a temporary or permanent disability payment in a timely manner, the total value of your payment will be increased by 10 percent.

In case you are wondering what constitutes a late workers’ comp payment, the payment is considered overdue and late if (1) an insurance company fails to make that payment within 14 days of the prespecified date of the payment, and (2) subsequent payments are not made every two weeks after the first late payment.

Fact: In California, both temporary and permanent disability are paid to injured workers every two weeks (14 days).

What is an unreasonable delay?

As mentioned earlier, if you want to collect a penalty of up to 25 percent for late workers’ comp checks, you will have to prove that the delay is “unreasonable.” Our Los Angeles workplace injuries attorney has outlined the factors that come into play when determining whether a delay is “unreasonable” or not:

  • The total amount of the overdue payment;
  • The number of days or weeks the payment has been delayed;
  • Whether and when the injured worker complained about the delay to the insurer;
  • Whether or not the delay has been promptly corrected;
  • Whether this is the first time the insurance company is delaying a workers’ comp payment for this particular injured worker or any other worker;
  • Whether the delay was the result of a human error or is something beyond the insurance company’s reasonable control;
  • Whether there was any statutory or regulatory requirement for the payment to be made within a certain number of days;
  • Whether the delay was a result of the negligent processing of claims and/or payments;
  • Whether the injured worker contributed to the delay by failure to provide any required documentation, respond to notices, or promptly notify the insurance company about the delay; and
  • The magnitude of the impact the delay has had on the injured worker, if any.

As always, it is always a good idea to consult with a workers compensation attorney in Los Angeles, Van Nuys, or elsewhere in California to speak about your particular situation. Get a free consultation by contacting Koszdin, Fields & Sherry today. Call our offices at 818-812-5639 or 800-747-3447 today.

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