What is a Workers' Compensation Penalty Payment? - Skaug Law

What is a Workers’ Compensation Penalty Payment?

Last updated Wednesday, June 15th, 2022

What is a Workers’ Compensation Penalty Payment?

Do you know what a workers’ compensation penalty is? Understanding what goes into a workers’ comp claim can be overwhelming. Now add physical pain. Toss in loss of income. Stir in fear of the unknown. These ingredients can turn your life topsy-turvy.

Try not to worry. Hope lines the horizon. There’s a checks and balances system in place. Fines help keep employers and insurers in line. Penalties may be enforced for two specific reasons.

  1. Employer Doesn’t Carry Workers’ Compensation. Idaho can bring the thunder when businesses don’t play by the rules. This state’s law can bombard wrongdoers with penalties. Employers become personally liable for all of your benefits, related attorney fees plus an additional 10 percent penalty. Employers can also be held responsible for paying the larger of the following amounts: $2.00 per day for each employee or $25.00 a day.
  2. Employer’s Insurer Fails to Send Workers’ Comp Payments within a Reasonable Period of Time. You may have recourse if the insurance company makes an art form out of stalling approved payments. Collecting penalties is an option in some states. Interest may also accrue. All of these fines can begin to rack up. Cha-ching!

The possibility of extra funds might sound appealing, but what if you need money now? A workers’ comp attorney can iron out these kinds of wrinkles. As Idaho workers compensation lawyers, Skaug Law gets injured workers like you compensated. Our helpful team has the experience to come out on top for you.

Insurance companies can take ages getting back to you. These large corporations may not understand you depend on those payments. We can make them understand.

What is a Late Workers’ Compensation Penalty?

When claims aren’t denied but you have yet to receive a payment, benefits from your employer’s insurance company could be considered late. Certain states frown on such behavior. You may even be eligible to get a fee for this inconvenience, also known as a late workers’ compensation penalty.

States try to look out for your best interest when you’ve been injured on the job. The gauntlet has been thrown to prevent insurers dilly-dallying with needed monies. Many states have established penalties.

Are you eligible to receive late workers’ comp penalty payments? Each state determines if such penalties will be established. States also decide amounts, when to tack on fees, exactly what penalties will be for and other related information.

It seems Gem State residents may have to wait. As of yet, Idaho isn’t enforcing any penalties for delayed workers’ comp sums. Check with the Idaho Industrial Commission for more details. Or consult with a knowledgeable workers’ compensation lawyer.

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What is Considered an Unreasonable Delay?

This term differs depending on which state a claim is filed. Some states may not even address this phrase at all. While it would be nice, there really isn’t a set time for distributing workers’ comp insurance payments.

California, for example, established a 14-day rule. Insurers must pay benefits within 14 days of injury notification. Unreasonable delays are more than a payment arriving a few days late from a simple mistake or clerical error. Intentional setbacks, recurring late payments and/or drawn-out waiting times are different.

How to Collect Late Workers’ Compensation Penalties?

It would be great if insurers would do what they’re supposed to do. Then none of this back and forth would even be necessary. Or at the very least, you could sweet talk these folks into giving you what is rightfully yours. But alas, it seldom works this way.

Now comes the hard part- collecting. Maybe you’re owed money. You may even be owed penalties and interest. But owed money is not in your bank yet. How do you get these companies to make good on what they owe you?

Idaho residents can reach out to the Idaho Industrial Commission. If you’re not receiving workers’ compensation benefits in a timely manner, the IIC may be able to help. An audit of paid claims may be launched to expose any suspicious patterns.

Unfortunately, there’s not a magic collection button you can push. Consulting a workers’ comp attorney can be the next best thing. Pushback is all too common in these types of cases. Gain the upper hand by working with a solid team of lawyers who knows how to get benefits you’re entitled to.

How Much Are Late Workers’ Compensation Penalties?

This answer varies widely depending on location. Each state governs how much insurance companies can be penalized (if at all) for not paying by a set time. Here are a handful of examples:

  • California. Whenever late, insurance companies are to add 10 percent to benefit payments. The penalty gets bumped up to 25 percent when there are unreasonable delays or denials.
  • Iowa. You could get a whopping 50 percent on top of your benefits if insurers are found not to have reasonable cause to deny, delay or stop claim payments.
  • Massachusetts. When insurers are found to have fought your appeal without just cause, they may be ordered to pay twice your benefits amount, plus lawyer and legal fees.
  • Michigan. You’re eligible to receive $50 for every day your payment is late. The total amount can be as high as $1,500 for penalties.
  • New York. Insurers are to add 20 percent and an extra fee of $300 once voluntary payments are 25 days behind. If you’ve been awarded benefits via conciliation or hearing, the time limit decreases to 10 days.