PENALTIES (RCW 51.48.017)
Employer's liability for acts of service company
A self-insured employer which contracts out its claims administration to a private company cannot thereby insulate itself from liability for the service company's acts of oversight or dereliction, including the delay in the payment of benefits. The acts of a service company are, as a matter of law, the acts of the self-insured employer. ....Sequoiyah Bueford, 63,516 (1983)
Failure to keep records of employee hours
In assessing a penalty under RCW 51.48.030 for failure to keep records of an employee, the Department may assess a separate penalty for each employee for which records were not kept. …R & G Probst, et ux, dba Diamond Driving, 00 11968 (2001) [Editor's Note: The Board's decision was appealed to superior court under Thurston County Cause No. 01-2-02279-0.]
Failure to secure payment of compensation (RCW 51.48.010)
The decision of the Department to assess a penalty for failure to secure the payment of compensation is not discretionary and the Board may review such decision de novo based on a preponderance of the evidence standard. In determining the amount of a penalty under RCW 51.48.010 the Department must consider factors including (1) whether the employer intended to avoid the burdens of the Act, (2) the amount of taxes incurred prior to registering with the Department, and (3) whether the employer had a good faith basis for believing it was not subject to the Act. ....Twin Rivers Inn, 89 0684 (1990); C & R Shingle, 88 2823 (1990)
Failure to submit medical reports (WAC 296-15-070(3))
Where a violation of WAC 296-15-070(3) is established, the Board, in reviewing the amount of the penalty to be assessed, will consider: (1) whether the employer intended to mislead the Department by withholding medical records at the time a determination was requested; (2) the context and significance of the medical records not submitted to the Department; (3) whether the employer in question had been previously found to be in violation of Department rules; and (4) the length of time during which a discovered violation remains unabated after proper notice by the Department that a violation has occurred. ....Carol Buxton, 89 5931 (1991) [dissent]
Offsetting employment contract benefits against monetary award for permanent partial disabilityIn determining the amount of the penalty to be assessed for violating the provisions of WAC 296-15-070(3) the factors that should be considered include, at a minimum, (1) whether the employer intended to mislead the Department by withholding records, (2) the content and significance of the records withheld, and (3) whether the employer had previously been found in violation of Department rules. ....Susan Irmer, 89 0492 (1990)
An employment contract which provides the worker an injury protection benefit requiring the self-insured employer to pay a defined amount to the worker upon injury, but allows the self-insured employer reimbursement from any workers' compensation benefits received does not violate RCW 51.04.060 because it does not diminish the workers entitlement under the Act. A self-insured employer should not be penalized because it does not pay a subsequent award for permanent partial disability that is a lesser monetary award then the injury protection benefit. Once the self-insured employer has paid the injury protection benefit, it is not necessary that it pay a subsequent award for permanent partial disability only to have to recoup the payments. ….Mitch Frerotte, 99 18418 (2001) Overruling In re David Washington, BIIA Dec., 67,458 (1986).
[Editor's Note: See National Football League Players Assn. v. National Football League Management Council, March 25, 2011, No. 08 CIV 3658 (PAC), Order of the District Court of the Southern District of New York, Paul A. Crotty, Judge, holding the self-insured employer may not claim a dollar for dollar offset.
Offsetting private insurance benefits against time loss compensation
Where a worker has received benefits under the self-insured employer's private insurance program for an injury subsequently determined to be compensable under the Act, the employer cannot withhold from payments of time loss compensation amounts already paid for the same period under the private program. Even though the union contract entitles the employer to reimbursement, RCW 51.32.040 and RCW 51.04.060 prohibit a "setoff" against time loss compensation as a means of enforcing the worker's obligation to repay the private benefits. The self-insured employer's withholding of past due time loss compensation to enforce its right of reimbursement constituted an unreasonable delay in the payment of benefits and the imposition of a penalty under RCW 51.48.017 was proper. ....David Washington, 67,458 (1986) [dissent] [Editor's Note: The Board's decision was appealed to superior court under Spokane County Cause No. 86-01139-5.](Overruled by In re Mitch Frerotte, BIIA Dec., 99 18418 (2001))
Review of penalties (RCW 51.48.080)
The decision to assess a penalty pursuant to RCW 51.48.080 is not committed to the discretion of the Department. In an appeal from a penalty assessed by the Department pursuant to RCW 51.48.080, the appellant is entitled to a full de novo review, and must prevail if the assessment of the penalty or the amount of the penalty is incorrect based upon a preponderance of evidence. ....Susan Irmer, 89 0492 (1990)
Sidebar agreements
Private agreements to pay an amount not required as a benefit under the Industrial Insurance Act are not contemplated by the Act, and no penalty can be awarded for a delay in the payment. ....Alta Paterson, 05 15987 (2005)
Standard of review (RCW 51.48.010) See STANDARD OF REVIEW
Unreasonable delay
A self-insured employer can be penalized for an unreasonable delay in the time between making the decision not to contest a payment order and the actual payment of the benefits. ....Jacque Slade, 04 11552 (2005)
A penalty against a self-insured employer should not be denied merely because the Department had not issued an order requiring the payment. The test is whether the self-insured employer maintained a genuine doubt as to the worker's legal or factual entitlement to the benefits. Overruling In re Agnes Levings, BIIA Dec., 99 13954 (2000). ....Jackie Washburn, 03 11104 (2004)
The self-insured employer was assessed a penalty for unreasonable delay in the payment of time-loss compensation benefits pursuant to a Board Order on Agreement of Parties. The Department issued a ministerial order based on the Board's order that included the statement of appeal rights, an indication the order would not be final for 60 days. The self-insured employer paid the benefits 34 days after receipt of the order, which was not unreasonable because the statutes do not provide a time frame in which the benefits should be paid, and the ministerial order suggested that the employer should have at least 60 days in which to pay the benefits. ….Agnes Levings, 99 13954 (2000) [dissent]The test of whether an employer's delay in paying benefits is "unreasonable" within the meaning of RCW 51.48.017, is "whether the employer had a genuine doubt from a medical or legal standpoint as to the liability for benefits." "[G]enerally a failure to pay because of a good faith belief that no payment is due will not warrant a penalty." ....Frank Madrid, 86 0224-A (1987) [special concurrence] [Editor's Note: The Board's decision was appealed to superior court under Snohomish County Cause No. 87-2-045534.]
Unreasonable delay - medical treatment
There is no statutory authority for imposition of a penalty based on a self-insured employer's unreasonable delay in providing medical treatment. ....John Meyer, 03 14702 (2004) Editor's Note: The Board's decision was appealed to superior court under Pierce County Cause No. 87-2-045534.]
WISHA – See SAFETY AND HEALTH Penalties