Appeals Board Decides On When 4650 (D) Penalty Is Due

The Workers’ Compensation Appeals Board (WCAB) issued an En Banc decision on November 8,2002, clearing up some controversy in regards to when the self executing penalty of Labor Code section 4650 (d) is payable.

There were two cases that the WCAB combined for this decision. In the first case the Workers’ Compensation Judge (WCJ) awarded two penalties.  The first penalty was a Labor Code section 5814 penalty for the late payment of a commutation award.  The second penalty was for failure to calculate a Labor Code section 4650 (d) penalty on the payment of this commuted award.

The second case that was part of this decision was Crump v. Los Angeles Unified School District. This case involved the untimely payment of a Compromise and Release in a Death Benefit case. In that case the WCJ indicated that a Labor Code section 4650 (d) penalty may have applied, but the applicant waived it by not timely asserting it. This article will not deal with the waiver issue although the Board indicated in its opinion that the issue of4650 could properly be raised for the first time at trial.

The Board in its opinion of reconsideration of both cases indicated that 4650 only applies to periodic payments of temporary and permanent disability indemnity.

The Board looked at Miner v. WCAB (1993) 4 Cal.4th 1213 that indicated that 4650 is a self-executing provision that only applies to delay in payments of temporary and permanent disability.  They then looked at Farris v. WCAB 65 CCC 824 (en banc) that indicated that 4650 (d) is not a separate class of benefit.

The WCAB then determined that the 4650(d) penalty applies only to periodic payments. It does not apply to the lump sum proceeds of C&R’s and commutations. In each of these cases the payments became a single lump sum payment. In these situations there are no periodic payments, therefore, 4650 is inapplicable. If there is a delay in this type of situation, it is not considered a delay in the timing of payments as required by this section.

The Board indicated mat a 4650 penalty would apply to the periodic payments in the death benefit case if the payments were being made periodically. However, if the death benefit is commuted to a lump sum C&R 4650 would not be applicable.

Even though it was not raised the Board indicated that 4650 would apply to the late payments of vocational rehabilitation maintenance allowance payments (VRMA). They considered VRMA a periodic payment to be covered by Labor Code section 4650 (d).

Case: Rivera v. Tower Staffing Solutions


Editor:
Harvey Brown
Address:
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Newport Beach, CA 92660
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