If you’re receiving workers’ comp benefits for an on-the-job injury or illness—particularly temporary disability or wage loss benefits—it can be a real hardship if the checks are late or suddenly stop. Many states try to discourage employers and their insurance companies from delaying or withholding benefits by imposing penalties for late payments.

The details of these penalties vary depending on the circumstances, including where you live and how late the checks are. For example:

• In California, the insurance company must add on 10% of the amount due any time an installment payment for temporary or permanent disability is late.
• In some states, late penalties don’t kick in until the payments are overdue by a certain number of days. For instance, Florida’s 20% penalty applies only when installment payments are at least seven days late. In New York, when an insurance company is paying benefits voluntarily (after accepting a workers’ comp claim), it must pay a penalty (20% of the late amount plus $300) when the payments are at least 25 days late.
• The amount of the penalty may be different in some states depending on whether the insurance company is paying voluntarily or after a workers’ comp judge has ordered benefits. Georgia requires a 15% penalty for late voluntary benefits and a 20% penalty for late payments under an award.

Aside from any fines, several states require insurance companies to pay interest for late benefit payments.

Penalties for Unreasonable or Bad-Faith Delays in Workers’ Comp Payments

In addition to (or instead of) the automatic late fees, some states impose penalties when delays are unreasonable. The law may presume that a delay is unreasonable if the payment is a certain amount overdue (such as 14 days in Illinois or 30 days in New Jersey), unless the insurer proves otherwise. California’s penalties for unreasonable delays are typical: 25%, up to a maximum of $10,000.

In some states, there may be yet another level of penalty when delays are especially unreasonable. For example, Illinois imposes a mandatory penalty of $30 per day (up to a maximum of $10,000) when the employer hasn’t given a good reason for late payments within 14 days after the employee has made a written demand for the payment. However, a workers’ comp judge may award the employee additional compensation up to 50% of the overdue amount when the delay is “unreasonable or vexatious.” Illinois courts have found that this steeper penalty applies when insurance companies have withheld payments deliberately or in bad faith.

How to Collect Penalties for Late Workers’ Comp Benefits

Typically, state laws make an exception for late penalties when the delay was because of something outside of the insurance company’s control. Otherwise, mandatory late penalties are usually automatic, meaning that you shouldn’t need to file any paperwork or prove anything at a hearing. The insurance company is supposed to automatically add the penalty to your next check. If this doesn’t happen, however, you should request the penalty in writing. If you still don’t get the money, you may need to ask your state’s workers’ compensation agency to order the insurance company to pay the penalties.

When you’re requesting a penalty for an unreasonable delay, you’ll usually need to file a request or petition with the state workers’ compensation agency. A workers’ comp judge will then hold a hearing to decide if the penalty is warranted. In some states, the judge may also order the insurance company to pay your attorneys’ fees for collecting the money.

You should talk to a workers' comp lawyer if your checks are consistently late, the insurance company doesn't respond to your request for a penalty, or you believe the insurer is intentionally delaying payments without a good reason. An attorney who’s experienced in this area can explain how the laws in your state apply to your situation, represent you in a hearing if that’s required, and help you collect all of the money you’re owed.