• Menu
  • Skip to right header navigation
  • Skip to main content
  • Skip to secondary navigation
  • Skip to footer

Before Header

Call us today for help!  (818) 707-1488

  • Instagram
  • LinkedIn

Friedman + Bartoumian

  • Home
  • About Us
    • Workers’ Compensation Claims Defense
    • Business Litigation
    • Insurance Law
    • Employment and Labor Law
  • Attorneys
    • Heywood G. Friedman, Partner
    • Haik K. Bartoumian, Partner
    • All Attorneys
  • Testimonials
  • Legal Art
  • Serving the Community
  • Careers
  • Blog
  • In Memory of Paul Lee
  • Contact
  • Search

Mobile Menu

  • Home
  • About Us
    • Workers’ Compensation Claims Defense
    • Business Litigation
    • Insurance Law
    • Employment and Labor Law
  • Attorneys
    • Heywood G. Friedman, Partner
    • Haik K. Bartoumian, Partner
    • All Attorneys
  • Testimonials
  • Legal Art
  • Serving the Community
  • Careers
  • Blog
  • In Memory of Paul Lee
  • Contact
  • Search

Contact Us Today!

If you see lawyers who are ready and able to collaborate with you to find positive solutions to your legal concerns, you should contact us.

(818) 707-1480

Self-Imposed Penalties (SIP): A Sixty-Second Seminar in Workers’ Compensation Claims Handling

July 13, 2022 //  by Law Firm of Friedman + Bartoumian//  Leave a Comment

Today’s blog discusses an error occurring with frequent regularity regarding administration of self-imposed penalties (SIP). Let’s begin by reviewing the SIP statute. Subsections (c) and (d) of LC §4650 state as follows:

(c): “Payment of temporary or permanent disability indemnity subsequent to the first payment shall be made as due every two weeks on the day designated with the first payment.”

(d): “If any indemnity payment is not made timely as required by this section … the amount of the late payment shall be increased 10 percent and shall be paid, without application, to the employee…”

When reading these two subsections together the law requires that 10% be automatically added to the amount of compensation delayed. We believe most claims administrators understand this concept. With that said, allow us to ask a simple question that often stymies claims professionals. We ask, “What is the SIP for a late payment of a lump sum C&R?” Is it:

  1. 10% of the gross settlement,
  2. 10% of the applicant’s net settlement, after subtraction of AA fees,
  3. 10% of only the amount delayed, including AA fees,
  4. None of the above.

It’s surprising how often this question is answered incorrectly. Various claims offices interpret the law differently and without uniformity. Options (a), (b) and (c) are all currently being used by different administrators when calculating the SIP penalty. So which answer is correct? Believe it or not, the correct answer is, “d. None of the above.”

SIP laws were enacted to provide an incentive for claims administrators to issue timely “periodic” indemnity payments, which are defined as temporary or permanent disability payments issued every two weeks. The law, therefore, does not apply to lump sum awards because a lump sum is not a periodic payment, but instead, is a one-time event. When a C&R is paid late the applicant’s remedy is limited to filing a LC §5814 petition, seeking a penalty up to 25% of the amount delayed. Should a claims administrator mistakenly issue a 10% SIP payment on a C&R, the payment will not act as a safe haven against a subsequent penalty. The applicant is allowed to seek the remaining 15% balance by filing a §5814 petition. However, should the injured worker fail to file such a petition, then the administrator’s 10% SIP payment was issued for no good reason! Again, self-imposed penalties do not apply to lump sum C&R’s. Issuing such payment is nothing more than just throwing money away.

Category: Uncategorized

You May Also Be Interested In:

True Claim Stories: A Sixty-Second Seminar in Workers’ Compensation Claims Handling

In Memory of Paul Lee, Esq.

First Aid: A Sixty-Second Seminar in Workers’ Compensation Claims Handling

Commutations: A Sixty-Second Seminar in Workers’ Compensation Claims Handling

Surveillance: A Sixty-Second Seminar in Workers’ Compensation Claims Handling

Workers’ Compensation Nurses: A Sixty-Second Seminar in Workers’ Compensation Claims Handling

LC 5710 Attorney Fees: A Sixty-Second Seminar in Workers’ Compensation Claims Handling

Petition for Contribution: A Sixty-Second Seminar in Workers’ Compensation Claims Handling

The 24-Visit Cap: A Sixty-Second Seminar in Workers’ Compensation Claims Handling

Previous Post: « The Company Picnic: A Sixty-Second Seminar in Workers’ Compensation Claims Handling
Next Post: Defending Your MPN! A Sixty-Second Seminar in Workers’ Compensation Claims Handling »

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Footer

Practice Areas

  • Business Litigation
  • Employment and Labor Law
  • Insurance Law
  • Workers’ Compensation Claims Defense

Our Offices

Los Angeles
Orange County
Bay Area
Sacramento
Fresno
Contact Us Today →

Contact Us

Contact our legal office today. Our attorneys are ready to fight for you. There is no better time than now.
Contact Us Today →

  • Instagram
  • LinkedIn
  • LinkedIn

Newsletter

Sign up to get free resources, tips, and directory of our firm.

  • Legal Blog
  • About Us
  • Privacy Policy
  • Disclaimer
  • Serving the Community

Site Footer

This website may be used for informational purposes only. The information contained in this Website is provided for informational purposes only and does not constitute legal advice. No one should act or refrain from acting on the basis of any information in this website without seeking the appropriate legal and professional counsel on his or her particular circumstances. The operation of this website and the transmission of information via this website are not intended to and do not create a confidential or attorney-client relationship. Any communications with The Law Firm of Friedman + Bartoumian, via Internet e-mail or through this website contain the security limits inherent to standard e-mail and should not be considered secure or confidential. While The Law Firm of Friedman + Bartoumian, hopes that the information contained in this website are useful as general information or background material, and while the contents of the Website are updated regularly, it cannot offer a warranty that the information is current, accurate, or applicable to any given situation. ALL WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE DISCLAIMED. By the information within this website, The Law Firm of Friedman + Bartoumian, does not hold itself out as qualified to practice law in any state, territory, or country other than those in which its attorneys are actually qualified. Additionally, The Law Firm of Friedman + Bartoumian, does not wish to represent anyone desiring representation based on viewing this website in a state, territory, or country in which this website does not comply with the applicable laws and ethical rules of that state. Links – This website may contain links to third-party websites. These third-party websites are not under the control of The Law Firm of Friedman + Bartoumian, and The Law Firm of Friedman + Bartoumian, is in no way responsible for the contents of any linked websites or any links contained in such websites. Links to third-party websites are provided for convenience only and do not imply endorsement of the linked website by The Law Firm of Friedman + Bartoumian.

Copyright © 2023 · Website Design By Ali Lapidus · Log in