What are the Penalties and Sanctions in Workers’ Compensation?

In workers’ compensation claims, sometimes the insurance company doesn’t provide what you need on time. However, there are penalties and sanctions in workers’ compensation cases to discourage this from happening. For example, if the insurance company doesn’t pay on time or authorize appropriate medical care promptly, they could receive penalties and sanctions.

The compensation someone could recover from penalties and sanctions varies based on why the insurance company denied payment or authorization. Insurance companies and employers could have to pay fines or face other disciplinary actions.

What are Workers’ Compensation Penalties?

After the injured employee reports their injury, they can file a workers’ compensation claim. Once the claim is filed, the insurance company has a limited time to decide on it. After that, they can choose to deny the claim or begin providing workers’ compensation benefits.

Most states give insurers 14 days to make a decision. If that time has passed and the insurance company hasn’t paid, they could face penalties. CA Labor Code 4650 explains that:

  • If the injury causes temporary or permanent disability, the insurance company must make the first payment no later than 14 days after they gain knowledge of the injury unless they have denied the claim. The employer or insurance company must continue to pay until they have paid a reasonable amount.
  • If the payment isn’t made within the required time, the insurer or employer must also pay a 10% increase of the original payment.

If they take even longer to pay, the penalty percentage could continue to increase. CA Labor Code 5814 states that if the payments or denial are unreasonably late, the insurer or employer could have to pay a penalty of up to 25% beyond what they originally owed the injured party.

What are the Differences Between CA Labor Codes 4650 and 5814?

CA Labor Codes 4650 and 5814 both outline the penalties the insurance company or employer could receive if they pay late. The main difference is the percentage of the original total they would have to pay.

As mentioned above, CA Labor Code 4650 states that if the insurer or employer takes more than 14 days to pay, they must additionally pay 10% of the original value. CA Labor Code 5814 comes into play if the insurer or employer pays unreasonably late. In that case, they would have to pay up to 25% of the original total as a penalty.

Sanctions in a Workers’ Compensation Case

California Code §10421 defines sanctions as provisions of a law that include a penalty for disobedience. For example, if someone involved in a workers’ compensation claim omits information or violates the workers’ compensation policies, they could receive a sanction. Penalties and sanctions in a workers’ compensation case could include:

  • Disciplinary action
  • Fines
  • Imprisonment

It’s a serious matter for an employee to get a sanction in a workers’ compensation case. An attorney can represent them through a sanction to help avoid harsh penalties.

Penalties and Sanctions for Insurance Companies in a Workers’ Compensation Case

Insurance companies can sometimes make unreasonable workers’ compensation claim denials. This is also grounds for a penalty. In some cases, they may have to pay 50% more than the injured party’s original entitled benefits.

These penalties exist to discourage unreasonable denials. Insurance companies know that they could receive hefty penalties if they deny someone workers’ comp benefits without cause.

Penalties and Sanctions for Employers in a Workers’ Compensation Case

The workers’ compensation system functions so that employees can receive compensation for workplace injuries even if the employer didn’t do anything to cause the injury. In some states, if the employer’s actions did cause the injuries, they may have to pay further penalties and sanctions to the injured worker.

Understanding Your Workers’ Compensation Benefits and Rights

When you’re hurt at work, it is critical to know your rights. Insurance companies must start making payments within 14 days or face penalties. Unfortunately, many injured employees don’t know this rule and don’t hold the insurance company accountable. Obviously, insurance companies aren’t eager to share this information.

Knowing these rules can help. Once you know they must make a decision and begin making payments before the time runs out, you can hold them accountable to these regulations.

A Workers’ Compensation Attorney Can Explain All of Your Rights

After getting injured at work, the most helpful way to learn your rights as an injured worker is to seek legal guidance from a workers’ compensation attorney Los Angeles. They can inform you of your rights and ensure you receive the money you deserve. If the insurance company isn’t paying your workers’ comp benefits, a lawyer can fight to hold the insurance company accountable by imposing penalties and sanctions.

Workers’ compensation attorneys can help your workers’ compensation claim by:

  • Handling communications with the insurance company and their legal team
  • Negotiating for you to receive fair compensation
  • Taking steps to impose penalties or sanctions if needed

Contact a Workers’ Compensation Attorney Today

Reach out to an attorney at KJT Law Group today for more information about the penalties and sanctions in workers’ compensation cases. Our firm offers free consultations to potential clients who need legal guidance after sustaining an injury at work. During the consultation, you can ask any questions you have and determine whether we are the right fit to help you with your case.

There is no financial risk to working with our workers’ compensation lawyers. We work on a contingency fee basis. This means you do not have to pay attorney’s fees unless we successfully help you recover compensation. Fill out our online form or give us a call today at (818) 507-8525 to learn more about your legal options and hold the insurance company or your employer accountable.