The Penalty Program
The Penalty Program investigates and assesses penalties for violations of the Tennessee Workers’ Compensation Act other than those covered by the Uninsured Employers Fund (UEF) and the Employee Misclassification Education and Enforcement Fund (EMEEF). The Program enforces several penalties, including:
- A 25% penalty for failure to pay or to timely pay temporary disability benefits; (If assessed, this penalty goes to the injured employee not to the Division.)
- A potential penalty of up to $10,000 or more for failure to timely comply with a Specialist’s or Administrator’s Designee’s order (for injuries prior to July 1, 2014; capped at $5,000 for injuries on or after July 1, 2014); and
- A penalty for an insurance company’s or self-insured employer’s failure to timely file claims forms; (Timely claims forms are important to the Division as the forms supply important claims information to the legislature for its consideration regarding changes to the Workers’ Compensation Act.)
- Other various penalties.
A 25% penalty for failure to pay or to failure to timely pay temporary disability benefits assessed by the department is payable to the injured employee. All other penalties collected go to the Second Injury Fund (injuries prior to July 1, 2014) or to the Division’s general fund (injuries on or after July 1, 2014).
To be considered timely and to avoid the noncompliance penalty, employers or their insurance carriers are required to comply with an Order for Benefits within fifteen (15) calendar days of its receipt, unless a request for an Appeal (for injuries prior to July 1, 2014) or Administrative Review (for injuries on or after July 1, 2014) is filed.
If an Appeal or Administrative Review is requested, the obligation to comply with the Order is suspended until the Appeal or Administrative Review is resolved.
To be considered timely and to avoid the noncompliance penalty, Employers or their insurance carriers are required to comply with the Board of Appeals or Administrative Review Order within ten (10) calendar days of receipt.
Continued failure to comply with an Order 21 days after its receipt may result in an additional penalty of $1,000.00 per day (injuries prior to July 1, 2014).
When determining whether or not a noncompliance penalty is appropriate, there is a “strict liability” standard applied. Either the employer or their insurance carrier timely complied with the Order, or it didn’t.
Summary of Workers’ Compensation Penalties
|Violation Type||Responsible Party||Length of Time Allotted||Penalty Amount|
Failure to acquire ins
|Employer||Must immediately procure upon becoming subject to WC law||Based on employer’s yearly premium|
|Failure to file proof of WC (I-1 form)
|Carrier||30 days of procurement or renewal||$100 for each 15 days past required date|
|Failure to timely file C-20
|Carrier, Pool, or Self-Insured||14 calendar days||$25 for each 15 days|
|Failure to file C-22
|Carrier, Pool, or Self-Insured||Immediately upon first payment||$10 for each 15 days past required date, up to $200|
|Failure to timely pay
|Carrier, Pool, or Self-Insured||20 days from date of knowledge of compensable||25% of unpaid or untimely paid benefit|
|Failure to file C-23
|Carrier, Pool, or Self-Insured||immediately upon denial||$10 for each 15 days past required date|
|Failure to file C-26
|Carrier, Pool, or Self-Insured||immediately upon change or stop in benefits||$10 for each 15 days past required date|
|Failure to File C-28
|Carrier, Pool, or Self-Insured||10 days from filing suit||$50|
|Failure to File C-29
|Carrier, Pool, or Self-Insured||30 days following final payment of compensation||$50 for each 15 days past required date|
|Failure to attend BRC & with settlement authority
|all parties||on date of BRC||$50-$5,000|
|Intentionally put WC on private insurance
Non-compliance with Order
|Carrier, Pool, or Self-Insured||15 calendar days||
Up to $10,000, + $1,000 per day$50-$5000
|Failure to file SD-1
|Carrier, Pool, or Self-Insured||date settlement or final order filed||$100|