Date: April 2, 2014
Board Rule 12 (12 NYCRR 312) provides for conciliation processing in accordance with Workers’ Compensation Law (WCL) § 25(2-b). At 312.5(i), carriers are directed to make timely payments within 10 days of finalized conciliation decisions, or else face the statutory fine of $500 ($300 payable to the claimant, and $200 payable to the Board (WCL § 25(2-b)(h))). Rule 312.5(j) provides that in such instance, penalties and assessments for late payment of awards pursuant to WCL § 25(3)(f) are not applicable. Workers’ Compensation Law § 25(3)(f) provides that if a carrier fails to make payments of compensation according to the terms of the award within 10 days, a penalty of 20% of the unpaid compensation shall be paid to the claimant and an assessment of $50 to the state treasury.
Rule 312.6 provides that “[t]he Chair may, in his or her discretion, suspend or modify the application of the rules in this part.”
As a result of the unequal penalties, some claimants’ attorneys and representatives have been hesitant to voluntarily participate in informal resolution. Parity will both increase confidence in the informal resolution process and encourage parties to reach stipulated agreements as to findings (see Rule 312.5).
As informal resolution has increased in effectiveness and popularity, carriers and self-insured employers have embraced the conciliation process. Data shows that despite a more robust use of conciliation since 2012, there have been only 144 WCL § 25(2-b)(h) penalties imposed in 2012 and 2013 combined, compared to the thousands of conciliation decisions issued in that time frame.
Consequently, I have exercised my authority as set forth in Rule 312.6, and have issued an order to suspend the application of Rule 312.5(j), effective for all proposed decisions issued on or after May 1, 2014. Further, any mandatory penalties pursuant to WCL § 25(2-b)(h) will be subsumed within the WCL § 25(3)(f) penalty if 20% of the award exceeds $500, so that the late payment of compensation awarded by a final conciliation decision shall in most instances be the same as the late payment penalty stemming from a Notice of Decision rendered by a WCL Judge.
Robert E. Beloten