PENALTY FOR LATE PAYMENTS

PENALTY FOR LATE PAYMENTS PURSUANT TO § 65.2-524

Reese v. Henrico County Police, VWC File No. VA01002424784, (December 14, 2010)

The Commission reversed an assessment of a 20% penalty against the Employer for a delay in payment of Claimant’s permanent partial disability benefits. Claimant was injured on November 26, 2008, and on August 14, 2009, the parties submitted an Award Agreement to the Commission for the payment of permanent partial disability benefits for a 4% loss of use of Claimant’s left arm. On August 20, 2009, the Commission entered a Supplement Award Order memorializing the Award Agreement and sent copies to the Claimant, the Employer’s post office box address, as well as the Insurer’s post office box address. On October 28, 2009, Claimant sought a 20% penalty for late payment of benefits. On November 4, 2009, the Deputy Commissioner wrote to the Employer indicating that it was to pay the benefits and a 20% penalty, or explain why the payments have not been made. The Employer’s Claims Supervisor responded two days later stating that an Award Order was never received, and explained the process with regards to PPD claims. She stated that the paper and electronic files were checked and there was no indication that the order had been received.

At the hearing, the Claims Supervisor testified that she first became aware of the award order on November 5, 2009. She explained the company’s process with PPD claims and also testified that in her 20 plus years of claims experience, she has never been assessed a late penalty. Witnesses from the Commission were present and testified regarding generation of the Award Order, the mailing process and that the Award Order was not returned in the mail. The Deputy Commissioner found against the Employer because it had not sufficiently rebutted the presumption that where mail is sent from the Commission and not returned, it is considered delivered.

On review, the Commission reversed, finding that the totality of the evidence did not support an assessment of the penalty, and because the required payment was made as promptly as practicable, and there was good cause outside the employer’s control for the delay, i.e., non-receipt of the Award Order.
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