The judge's order approving a settlement issues June 5, 1992, but payment is not made until August 15, 1992, because the order was misfiled by the carrier. The employee is entitled to?

• A. A 10% penalty because of the unreasonable delay
• B. Not entitled to a penalty because the delay was not significant
• C. Interest and a 10% penalty because of the delay
• D. Not entitled to a penalty but is entitled to interest from the date of the award

Answer: (A)

Unreasonable delay in payment triggers a 10% penalty on the amount due. Under California workers’ compensation rules, when an insurer delays paying benefits approved by a judge, and the delay is caused by the insurer’s fault, the employee is entitled to a 10% penalty. In this case, the settlement was approved on June 5, 1992, but the payment wasn’t made until August 15, 1992 because the carrier misfiled the order. That misfiling is a fault of the carrier and represents an unreasonable delay in payment, so the employee receives the 10% penalty on the delayed amount.

The other options aren’t correct here because the penalty is the remedy for the delay itself, not a requirement to also award interest in addition to the penalty, and the delay isn’t neutralized by saying it wasn’t significant.