Put it in Practice August 2022: Monthly Tips for Florida WC Professionals
The Check is in the Mail! Avoiding Penalties & Interest on Missing Payments
Occasionally, indemnity checks mailed to claimants do not reach them. Whether the wrong zip code or Murphy’s Law is to blame, these things happen! Just make sure you handle missing checks correctly or you could incur:
- 20% penalty on any installment of compensation that is not paid within seven days of due date [Fla.Stat. 440.20(6)(a)]
- Interest on any installment of compensation if not paid when due [Fla.Stat. 440.20(8)]
The issue boils down to whether the E/C was in control of the delivery of the check that caused the late payment [Palma v. American Airlines, 229 So.3d 1272; Pupo v. City of Hialeah, 91 So.3d 925].
Two recent JCC cases provide a roadmap: Hernandez v Reliant Roofing (May 2022) found that once the claimant notified the E/C of the missing check and they required execution of an affidavit, they regained control of the check’s delivery and reissued untimely.
Ruby v. Open Arms Learning Academy(April 2021) similarly found no evidence the carrier acted diligently in securing stop payments on IIB checks and failed to reissue on a timely basis.
Many carriers require claimants to complete “lost checks affidavits” before reissuing indemnity checks. Although there are valid reasons to do so, it creates exposure to penalties and interest, and possibly attorney fees. The better practice is to:
- Immediately determine if the check(s) has cleared, and if not, cancel and reissue, placing the claimant and attorney on notice.
- In the meantime, if you wish, have the claimant execute an affidavit.
If there are questions about this topic, please feel free to reach out to one of us at HR Law and we will guide you through it.
This month’s author is Rob Osburn rosburn@hrlawflorida.com