When temporary disability is mistakenly paid at an incorrect lower rate, what is the proper remedy?

• A. Pay the amount due
• B. Begin paying at the correct rate
• C. Pay the amount due with a self-imposed penalty of 10%
• D. Begin paying at the correct rate plus 10% for the delay

Answer: (C)

When temporary disability benefits have been underpaid because a lower rate was used, the remedy is to correct the back payment and also cover the delay with a penalty. Paying the amount that was due plus a 10% penalty on that amount acknowledges the miscalculation, compensates the worker for the time they didn’t receive the correct benefits, and signals compliance with the expected penalties for late or underpaid compensation. This approach ensures the worker is made whole for past payments while also deter­ring future underpayments. Merely paying the back amount without the penalty leaves the delay unaddressed, and starting to pay at the correct rate without catching up on what was already underpaid ignores the accumulated shortfall.