Multiple Penalties - California Labor Code Section 5814

Multiple Penalties for Delays in Payment in California: Multiple penalties are properly assessed under Labor Code section 5814 for delays in payment of the same kind of benefit under certain conditions. The decision whether assessment of multiple penalties is required turns on whether an employer engages in a "single course of misconduct" or "separate and distinct acts of misconduct." In Gallamore v. Workers' Comp. Appeals Bd. (1979) 23 Cal. 3d 815, the California Supreme Court held that "multiple penalties are appropriate in a single penalty proceeding" where "the circumstances disclose separate and distinct acts of delay or nonpayment, and prior notice was given of the applicant's intent to seek separate or additional penalties for such acts." In Christian v. Workers' Comp. Appeals Bd. (1997) 15 Cal. 4th 505, 511 63 Cal. Rptr. 2d 336, 936 P.2d 115, our Supreme Court clarified the rule: "While we have held that multiple penalties must be applied in some circumstances, those penalties have been approved only when the refusal of, or delay in payment of benefits, necessarily involved separate and distinct unreasonable acts by the insurance carrier. Those multiple penalties involved separate classes of benefits, individual claims for payment or reimbursement of medical or travel expenses, or a repeated refusal or delay in payment of a benefit after the same conduct had already been found by the Board to be unreasonable and a prior penalty imposed, or some analogous, legally significant event such as a stipulation of liability by the carrier had intervened between the first act for which a penalty was imposed and the second." In Mote v. Workers' Comp. Appeals Bd. (1997) 56 Cal. App. 4th 902, the Court construed section 5814 as requiring separate penalties for each separate act of unreasonable conduct involving delayed temporary disability benefits. Section 4650 " 'The section 4650 penalty does not duplicate or supersede the section 5814 penalty; . . . the section 4650 penalty, which is a self-executing, strict liability provision not dependent on a finding of unreasonable delay, is intended to supplement, not replace, the section 5814 penalty. . . .' Thus, respondents are strictly liable for section 4650 penalties, without application or demand, in addition to any other penalties which may be assessed against them." ( Mote v. Workers' Comp. Appeals Bd., supra, 56 Cal. App. 4th at p. 910.)