California Labor Codes 5814

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§§ 5814 Penalties

History: Amended by stats 2002, Chap 6 (AB 749) Amended by stats 2002, Chap 6 (AB 749) (a) When payment of compensation has been unreasonably delayed or refused, either prior to or subsequent to the issuance of an award, the amount of the payment unreasonably delayed or refused shall be increased up to 25 percent or up to ten thousand dollars ($10,000), whichever is less. In any proceeding under this section, the appeals board shall use its discretion to accomplish a fair balance and substantial justice between the parties. (b) If a potential violation of this section is discovered by the employer prior to an employee claiming a penalty under this section, the employer, within 90 days of the date of the discovery, may pay a self-imposed penalty in the amount of 10 percent of the amount of the payment unreasonably delayed or refused, along with the amount of the payment delayed or refused. This self-imposed penalty shall be in lieu of the penalty in subdivision (a). (c) Upon the approval of a compromise and release, findings and awards, or stipulations and orders by the appeals board, it shall be conclusively presumed that any accrued claims for penalty have been resolved, regardless of whether a petition for penalty has been filed, unless the claim for penalty is expressly excluded by the terms of the order or award. Upon the submission of any issue for determination at a regular trial hearing, it shall be conclusively presumed that any accrued claim for penalty in connection with the benefit at issue has been resolved, regardless of whether a petition for penalty has been filed, unless the issue of penalty is also submitted or is expressly excluded in the statement of issues being submitted. (d) The payment of any increased award pursuant to subdivision (a) shall be reduced by any amount paid under subdivision (d) of Section 4650 on the same unreasonably delayed or refused benefit payment. (e) No unreasonable delay in the provision of medical treatment shall be found when the treatment has been authorized by the employer in a timely manner and the only dispute concerns payment of a billing submitted by a physician or medical provider as provided in Section 4603.2. (f) Nothing in this section shall be construed to create a civil cause of action. (g) Notwithstanding any other provision of law, no action may be brought to recover penalties that may be awarded under this section more than two years from the date the payment of compensation was due. (h) This section shall apply to all injuries, without regard to whether the injury occurs before, on, or after the operative date of this section. (i) This section shall become operative on June 1, 2004. Added by Stats 2004, CH 34, effective 4/19/04

Relevant Case Law Marsh & McLennan, Inc. v. Sup. Crt. Note: No private cause of action against a TPA; other legislative remedies apply. Jablonski v. Royal Globe Ins. Co. Note: No immunity for TPA who committed intentional tort in investigating claim. Schlick v. Comco Mgt., Inc. Note: WCAB has broad jurisdiction over rights, liabilities arising out of compensation. DuBois v. WCAB Note: UEF not liable for penalties from unreasonable delay in payment of award. State of CA v. WCAB (Ellison) Note: WCAB jurisdiction to impose penalty for delay in pmt. of State's industrial disability indemnity. Carver v. WCAB Note: Nonpayment penalties are benefits, not damages; UEF has burden of seeking reimbursement. Moulton v. WCAB Note: Failure to issue self imposed 4650 penalty for late TTD payment creates 5814 liability. Mote v. WCAB Note: Employer liable for delay in increasing rate of TTD even though stipulated amount. SCIF v. WCAB (Patterson) Note: Attorney fee commuted from disability benefits is subject to separate penalty for delayed payment. Klee v. WCAB Note: WCAB's order annulled when prior writs were attempts to delay payment. Co. of San Luis Obispo v. WCAB (Barnes) Note: $65K penalty on delayed payment $97.87 unreasonable. Hershman v. Eisenberg Medical Note: 5814 penalties imposed on insolvent carrier are 'covered claims' for CIGA to pay. Christian v. WCAB. Note: Multiple penalties apply if delay or refusal attributable to seperate and distinct acts only. Gallamore v. WCAB Note: Multiple penalties proper for multiple delinquencies in benefits. Les Hall vs. Valley Media (WCAB No. SAC 309589) Note: C&R valid despite subsequent rehabilitation of carrier; Foreign state no jurisdiction on WCAB; Penalty invalid without hearing County of Los Angeles v. WCAB and Jones Note: Attorney fees are a species of benefits on which penalties may be assessed. Rivera v. Tower Staffing, etc., et al Note: 4650(d) penalties do not apply to lump sum payments. Jones v. Ukiah Timber Products Note: Penalty for unreasonable delay in reimbursing medical transportation expense applied to full amount of medical treatment expenses. Kamel vs. West Cliff Medical Note: In a 5814 penalty, applicant must first establish delay or refusal in the payment of compensation and then the defendant Ramirez vs. WCAB, Safeway Note: Advancement of EDD disability does not excuse penalty against employer/carrier for late payments of, or failure to pay, benefits. General Reinsurance Corp. v. St. Jude Hospital Note: Self insured employer's excess carrier not required to reimburse for penalties caused by employer's claims practices. Yee-Sanchez vs. Permanente, etc. et at Note: Definition of rights, duties, penalties for pre-application discovery. Farris vs. Industrial Wire et. al. Note: 5814 penalty applies to entire underlying species when failure / refusal to pay 4650 penalty. Kopitske v. WCAB Note: Failure to pay PDA on request while applicant in rehab results in penalty against PD. Avalon Bay Foods v. WCAB Note: No penalty if reimbursable medical expense paid within 60 days of receipt. Jensen vs. WCAB Note: No 'grace period' for delay in payment provided by the statutory right to reconsideration or appellate review. Andersen v. Workers' Compensation Appeals Board Note: Employer violated section 132a by requiring claimant to use his earned vacation time rather than sick leave to attend medical appointments to care for his industrial injuries. Duncan v. WCAB Note: A sanction is not a workers' compensation 'benefit' within the meaning of section 3716.2, which limits the Uninsured Employers Benefits Trust Fund's (UEBTF) liability 'only' to 'benefits' that would be paid by an employer properly insured for worker's compensation. SCIF v. WCAB (Stuart) Note: Clerical mistake attributing to the employee a change of address for the employer led to a one-week delay in the employee's benefit check is not unreasonable delay under 5814. Nestle v. WCAB and Ken Ryerson Note: An order dismissing appellant's petition for reconsideration as untimely was unreasonable when reconsideration was sought within 20 days of service of an amended order that effected a substantial and material change in the award and involved a judicial act. Mitchel vs. Scott Wetzel Services, Inc. Note: Intentional misconduct by the workers' compensation claims administrator of a self-insured employer falls within the exclusive remedy of work comp. Rivera vs. WCAB (Tower Staffing) Note: Overrules En Banc decision in Rivera vs Tower Staffing: 4650 applies to both periodic and accrued indemnity, but not commuted lump sums. L.A. County Dept. of Parks v. WCAB Note: [Unpublished] The stipulations and order to comply was not a formal award requiring a petition for continuing jurisdiction under the Labor Code. Abney vs. Aera Energy; Liberty Mutual Note: 5814, as amended, applies to acts prior to effective date if adjudicated after. Martinez vs. Jack Neal & Son, Inc. Note: CIGA not liable for 5814 penalties of insolvent carrier. Smith v. WCAB and California Youth Authority, and Amar v. WCAB and Mel Clayton Ford Note: Insurance carriers who fail to provide previously awarded medical care may not avoid attorney fees to successful applicants' attorneys through the expedient of an informal denial, even when they do so in good faith. Ramirez v. Drive Financial Services Note: [En Banc] Although, under new section 5814(a), a successive penalty may still be awarded for an unreasonable delay in making a prior penalty payment, it should not be awarded where the defendant had genuine doubt as to its liability or where there is no legally significant intervening event. Stoddard vs. Western Employers Ins. Co. Note: Refusal to pay benefits does not take matter out of exclusive remedy bargain of workers' compensation. Kerley vs. WCAB Note: The only excuse for delay in payment of benefits is genuine doubt from a medical or legal standpoint; burden on employer to present substantial evidence of such. Rohrback vs. WCAB Note: Definition of 'liability' regarding 'genuine doubt' for purposes of 5814 penalty. Green v. WCAB (City of Compton) Note: LC 5814 as amended by SB 899 applies retroactively to cases still open as of effective date. Cervantes vs. Great American Ins. Co. Note: Wilful delay in payment of benefits does not remove action from exclusive remedy of comp. Hodgman v. WCAB Note: The Board has no basis for restricting compensation to nonduplicative care because the parties agreed in a compromise and release agreement (C&R) that the guardian was entitled to compensation for duplicative care and the employer, not the estate of the injured worker, should bear the expense. McCarthy v. WCAB (Best Sanitizer's, Inc.) Note: New Labor Code section 5814 applies to penalty claims pending as of 06/01/04. New United Motors Manufacturing, Inc. v. Workers' Compensation Appeals Board Note: The court found that the WCAB ordered a penalty based on a misinterpretation of the relevant statute, and found that no proper basis exists for the WCAB's award of -attorney fees under section 5814.5.