Labor Code 4650 penalty

What it is

Labor Code section 4650(d) is a self-executing late-payment penalty. If any indemnity payment, temporary disability or permanent disability, is not made on time, the amount of the late payment is increased 10 percent and must be paid to the employee without application.

The rule and its deadlines

Section 4650 sets the clock. The first TD payment is due no later than 14 days after the employer knows of the injury and disability, unless liability is denied first. The first PD payment is due within 14 days after the last TD payment. After the first payment, indemnity is due every two weeks on the designated day. No increase applies to payments due before, or within 14 days after, the claim form was submitted, or when the employer, within the first 14 days, explains in writing why it cannot yet decide whether TD is owed and what it needs to decide. An employer continuing wages under a qualifying salary continuation plan is also exempt.

Why it matters to an applicant firm

The 4650 increase is owed whether or not anyone asks, but carriers don't always pay it. Because it is a fixed 10 percent, it is easy to compute from the payment history: compare each due date to the date paid. The same late payment may also support a Labor Code 5814 penalty if the delay was unreasonable, reduced by any 4650 increase already paid. Use the TD late payment penalty calculator and the temporary disability guide.