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Quote of the Day - American business long ago gave up on demanding that prospective employees be honest and hardworking. It has even stopped hoping for employees who are educated enough that they can tell the difference between the men's room and the women's room without having little pictures on the doors. - Dave Barry
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Worker's Compensation Appeals Board 25% Penalty Ruled Out-of-Line

It's hard enough to have a business here in California without the State making it more difficult.  I know, I'm an employer, too.  In our case-of-the-day, New United Motors Manufacturing, a joint venture between GM and Toyota, settled a work comp claim with an employee, agreeing to pay out just over $30K over time.

After NUMMI had made several payments, it transferred the payment responsibility to a third-party administrator, and somewhere along the line, the employee's file was mistakenly marked that all payments had been made, even though only about half had.  Upon discovery of the mistake, NUMMI sent the balance of the money owed, along with a self-imposed 10% penalty, as allowed by California Labor Code section 5814(b).

The employee took the matter back to the Worker's Compensation Appeals Board and sought a 25% penalty for the 47-day delay in the payments, plus his attorneys fees for doing so.  Labor Code section 5814(a) allows a 25% penalty or a $10,000 penalty, whichever is less, but places discretion with the WCAB to issue a penalty.

The court took just nine pages to dispatch the WCAB's finding for the employee's claim of 25% penalty plus attorneys fees, ruling that where the employer discovered the error, corrected it and self-imposed a 10% penalty, the WCAB couldn't impose the higher penalty.  In the court's words, "the WCAB reads into section 5814(b) limitations not provided for by the statute’s plain and unambiguous language. The law forbids that ..."

That's called an "enough is enough" ruling. 

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Wednesday, August 16, 2006 at 19:31 Comments Closed (0) |
 
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