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Workers’ Comp Benefits Delayed / Not Paid: Penalties

Young man suffering from neck injury at home

If you work for an employer in California, regardless of the industry, you are entitled to workers’ compensation protection. When you are injured on the job or as a result of performing your job duties, you are entitled to workers’ comp benefits. If the workers’ comp insurance provider wrongfully denies you benefits or unjustifiably delays payment of your benefits, you have the right to sue for those unpaid benefits. You may be entitled to even more than the benefits owed. Read on to learn about penalties for late workers’ comp benefits, and if you’ve been hurt on the job, get help filing your claims from a passionate California workplace injury attorney.

Penalties for Delayed or Denied Claims

California law includes statutory penalties for insurance providers that fail to make timely payments. If your insurance provider fails to make timely payments, you are entitled to recover both the value of the payments missed as well as additional penalty amounts depending on the type of claim. The amount of the penalty depends on the type of benefit and the reason for the delay, and the penalty is calculated based on the amount of benefits that were not properly paid.

The California Labor Code includes two penalty sections:

  • Section 4650 provides that an insurance provider must pay a 10 percent penalty on overdue payments for temporary or permanent disability benefits. The penalty is applied automatically for any late payments.
  • Section 5814 provides that an insurance provider must pay a penalty of up to 25 percent if workers’ compensation has been unreasonably denied or delayed. The penalty may be applied to benefits relating to temporary or permanent disability, medical treatments, death benefits, or any other payment the insurance company should have made. The injured worker must demonstrate the insurance company acted unreasonably in order to collect the penalty under section 5814, and the amount of the penalty (up to a maximum of 25 percent) will be up to the discretion of the court.

What is a Delay, and What is “Unreasonable”?

Disability benefits must be paid within 14 days of the insurance provider receiving notice of the injury and disability, and every two weeks thereafter. A payment is late if it is not issued within 14 days of the adjudication of disability or two weeks of the last payment. Other benefits may have different time frames for payment.

Insurance providers must pay the 10 percent penalty automatically after any late payment. If the worker notifies the provider of the late payment and the penalty owed, they must pay the overdue amounts plus 10 percent within 90 days. If they fail to pay the penalty within 90 days, they may be subject to the higher penalty under section 5814.

In order to claim the higher penalty under section 5814, the injured worker must prove that the insurance provider denied or delayed the claim payments unreasonably. A minor clerical error leading to a delay, for example, would not be unreasonable. Proving a denial or delay was unreasonable requires applying a number of factors, including:

  • The amount of the delayed payment
  • The duration of the delay
  • Whether the delay was intentional or unintentional
  • Whether there is a history of delayed or denied payments
  • Whether there was a statutory mandate to pay the amount within a certain number of days
  • Whether the injured worker contributed to the delay by, for example, failing to promptly notify the insurance company of the delay or failing to provide the requisite information
  • The effect of the delay on the injured worker


If you have a claim for workers’ compensation in California and want to make sure you get the maximum coverage available, call Invictus Law today at 949-287-5711 and speak with a seasoned California workers’ compensation attorney to evaluate your claims.

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