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When Does an Iowa Employer Have to Pay “Penalty Benefits” in a Workers’ Compensation Case?


Workers’ compensation is supposed to ensure employees receive timely medical and wage replacement benefits if they are injured on the job. To facilitate this goal, Iowa law authorizes the workers’ compensation commissioner to award “penalty benefits” to an employee if there is a “denial, a delay in payment, or a termination of benefits” made “without reasonable or probable cause or excuse known to the employer or insurance carrier at the time.” If allowed, these penalty benefits can be significant–up to 50 percent of the amount that was improperly “denied, delayed, or terminated.”

Court of Appeals: No Unreasonable Delay in Assigning Permanent Partial Disability Benefits to Injured Des Moines Worker

But it is important to note the burden is on the employee, not the employer, to show there was in fact a “denial, delay in payment, or termination of benefits,” and that the employer’s actions were unreasonable. An employee’s mere assertion that an employer did not make workers’ compensation payments in a timely manner is not enough.

For example, the Iowa Court of Appeals recently rejected an employee’s request for penalty benefits after finding he failed to prove there was an unreasonable delay in the first place. In this case, Dubinovic v. Des Moines Public Schools, the plaintiff was injured on-the-job while working as a custodian for the Des Moines Public Schools (DMPS).

DMPS did not dispute the employee suffered a work-related injury. Indeed, DMPS did pay out temporary total disability (TTD) benefits under workers’ compensation for the period between December 2012–when the injury occurred–and March 2013, when the plaintiff’s doctor cleared him to return to work without medical restrictions. A few months later, in July 2013, the DMPS paid permanent partial disability (PPD) benefits to the plaintiff, reflecting a 2-percent impairment to his right wrist.

The workers’ compensation commission later increased the PPD rating to 8 percent and ordered DMPS to pay additional benefits. Nevertheless, the deputy commissioner rejected the plaintiff’s request for penalty benefits. Under the circumstances, the deputy commissioner said DMPS acted reasonably in originally assigning the lower 2-percent rating.

The Court of Appeals agreed. It noted that DMPS paid the initial 2-percent benefit “voluntarily,” that is to say before the plaintiff’s doctor certified he had reached maximum medical improvement. And as the deputy commissioner pointed out, there was a “discrepancy” in the plaintiff’s medical records regarding the extent of his wrist pain. This made the District’s decision to award a lower amount of PPD benefits reasonable under the circumstances.

Contact a Southeast Iowa Workers’ Compensation Lawyer Today If You Need Help Obtaining Benefits from Your Employer

It can be frustrating to deal with an employer when it comes to a workers’ compensation claim. That is why the best thing you can do is work with a qualified Southeast Iowa workers’ compensation attorney who understands the system and can advise you of your rights. Contact the Noyes Law Office, P.C., today to schedule a consultation with a member of our team.


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