Self-Imposed Penalties on VRMA on Appeal

Saturday, June 7, 2003 | 0

Late last year, in the California Workers Compensation Appeals Board (Board) en banc decision of Rivera v. Tower Staffing Solutions, SCIF and Calvin Crump v. LAUSD, Helmsman the Board noted that there was no basis for exempting VRMA from the L .C. section 4650(d) requirement to pay a self-imposed 10% penalty for late payment of the benefit. It was further noted that the Division of Workers' Compensation was proceeding with new audit requirements that would result in audit penalties if insurers and employers failed to pay the self-imposed 10% penalty for a late payment of VRMA.

The Rivera case has been appealed to the District Court of Appeal (2nd District). This means that implementation of the Board's decision will be held in abeyance until the DCA renders its decision (or denies the writ of review). If the DCA upholds the WCAB decision, it is quite possible this case would be appealed to the California Supreme Court. Stay tuned. The practical impact for claims examiners is that they do not have to start paying the 10% - at least not yet.

Some carriers have begun the process of adapting their computer systems to allow for payment of a self-imposed 10% penalty on late VRMA. I would recommend that carriers and employers have a contingency plan for such an eventuality. Even if the DCA overturns the WCAB decision, it is likely the Board will reinstate its opinion on this subject in a later case - the Board has already made its bias clear in the Rivera/Crump case, despite the fact that penalties already exist for late payment of VRMA benefits (via L. C. section 4642). The only way to prevent the Board from imposing its bias on this issue would be to obtain a decision from the Supreme Court that VRMA is not subject to a 4650(d) penalty.

Contributed by vocational rehabilitation expert Allan Leno, Leno & Associates, (818) 370-8859 mailto:allanleno@leno-assoc.com.