Legal Summaries Contents            Home Page Contents

                                                              

PENALTY FOR LATE PAYMENT

See Sanctions

The Workers' Compensation Act imposes a twenty percent penalty against an employer who fails to pay benefits within two weeks after they become due. Code Sec. 65.2-524. "[A] benefit is 'paid' when payment is mailed directly to the claimant, at his current residential address, within two weeks after it becomes due." Audobon Tree Serv. v. Childress, 2 Va. App. 35, 41, 341 S.E.2d 211, 215 (1986).

Effective July 1, 1999, the employer's liability for a twenty percent penalty is not absolute. Section 65.2-524 has been amended to provide:

§65.2-524. Failure to pay compensation within two weeks after it becomes due.

If any payment is not paid within two weeks after it becomes due, there shall be added to such unpaid compensation an amount equal to twenty percent thereof, unless the Commission finds that any required payment has been made as promptly as practicable and (i) there is good cause outside the control of the employer for the delay or (ii) in the case of a self-insured employer, the employer has issued the required payment to the employee as a part of the next regular payroll after the payment becomes due. No such penalty shall be added, however, to any payment made within two weeks after the expiration of (i) the period in which Commission review may be requested pursuant to §65.2-705 or (ii) the period in which a notice of appeal may be filed pursuant to § 65.2-706. No penalty shall be assessed against the Commonwealth when the Commonwealth has issued a regular payroll check to the employee in lieu of compensation covering the period of disability.

A penalty can only be imposed on amounts not paid within two weeks of their due date. Code Sec. 65.2-524. An amount becomes due on the date of an award by the commission. Audobon Tree Serv. v. Childress, 2 Va. App. 35, 39, 341 S.E.2d 211, 213 (1986). An insurer must mail payment to the claimant or beneficiary directly even though the claimant may be represented by counsel. Audobon Tree Serv. v. Childress, 2 Va. App. 35, 341 S.E.2d 211 (1986); Rule 9.2, Rules of the Virginia Workers' Compensation Commission.

Legal Summaries Contents            Home Page Contents