Labor Code §5814 – Penalties for Unreasonable Delay or Denial

Labor Code §5814 is the main penalty for an insurance company or employer that unreasonably delays or refuses workers’ comp benefits in California. If the Workers’ Compensation Appeals Board (WCAB) finds a payment was unreasonably delayed or refused, it can increase that payment by up to 25%, capped at $10,000 per penalty. The penalty is paid to you, it isn’t automatic, and you generally must seek it within two years after the payment was due.

What Labor Code §5814 says

• (a) The penalty. When payment of compensation is unreasonably delayed or refused, before or after an award, the delayed or refused amount “shall be increased up to 25 percent or up to ten thousand dollars ($10,000), whichever is less.” The WCAB uses its discretion to set a fair amount within that range.
• (b) Self-imposed penalty. If the employer or insurer finds a potential violation before you claim a penalty, it can pay, within 90 days of discovering it, a self-imposed penalty of 10% of the delayed amount along with the amount itself. That payment is in place of the §5814(a) penalty.
• (c) Settlements and trials. Approval of a Compromise and Release, findings and award, or stipulations is presumed to resolve all accrued penalty claims unless the order expressly excludes them. Submitting a benefit issue at trial creates the same presumption for penalties related to that benefit unless the penalty is also submitted or expressly excluded.
• (d) No double counting. A §5814 award is reduced by any 10% increase already paid under §4650(d) for the same delay.
• (e) Medical bills. A delay in medical treatment isn’t unreasonable if the treatment was promptly authorized and the only dispute is about paying the provider’s bill under §4603.2.
• (f)–(g) Where and when. The section doesn’t create a separate lawsuit in civil court, and no action to recover the penalty may be brought more than two years after the payment was due.

Benefits the penalty can apply to

Section 5814 applies to “compensation,” which Labor Code §3207 defines as every benefit or payment the workers’ comp law gives an injured worker. Common examples:

• Temporary disability checks that stop or arrive late without a valid reason. The first TD payment is generally due within 14 days after the employer knows of the injury and disability, and then every two weeks (§4650). See Labor Code §4650.
• Permanent disability advances, which generally must start within 14 days after TD ends, and payments under an award.
• Medical treatment that is authorized but never scheduled, or delayed for no legitimate reason. See delayed medical treatment.
• Mileage reimbursement and other benefits owed under the claim, depending on the facts.

What counts as unreasonable

The question is whether the insurer had a genuine legal or medical reason for the delay. A delay is more likely to be found unreasonable when the insurer ignores documents it already has, stops checks without explanation, fails to pay after an award, or denies a benefit without any medical or legal basis. A delay is less likely to be penalized when the insurer has real evidence disputing the claim, such as a medical report questioning whether the injury is work-related, and it acts promptly on that dispute.

A hypothetical example

Marcus, a delivery driver, is on temporary disability at $1,000 a week. His adjuster stops paying for four weeks with no explanation, even though his doctor’s reports keep him off work. When the checks resume, $4,000 is paid late.

• Under §4650(d), each late payment should automatically include a 10% increase, so $400 in total.
• If the WCAB finds the delay unreasonable, it can increase the delayed $4,000 by up to 25%, or up to $1,000.
• Under §5814(d), any §4650(d) increase already paid is credited against that award.

The numbers are illustrative only; the actual penalty depends on what the judge finds fair. To check your TD rate, try the workers’ comp benefits calculator.

How to pursue a §5814 penalty

1. Keep records. Save every check stub, benefit notice, letter and email, and note the date each payment arrived.
2. Put the problem in writing. Write to the adjuster identifying the missing or late payment. Our guide to problems with your workers’ comp adjuster covers common issues.
3. Raise the penalty at the WCAB. Penalties are typically requested by petition or raised as an issue for hearing. If benefits are cut off, you may also be able to seek an expedited hearing; see how to request an expedited hearing.
4. Watch the two-year limit. Act within two years after the delayed payment was due.
5. Don’t settle it away by accident. Before signing a settlement, decide whether pending penalty claims should be resolved or expressly excluded.

Frequently asked questions

Is the §5814 penalty automatic?

No. The WCAB must find the delay or refusal unreasonable. The separate 10% increase under §4650(d) for late disability payments is automatic.

Who receives the penalty?

You do. The penalty increases the compensation owed to you, not to the state or your doctor.

Can I sue the insurance company in civil court for bad faith?

Generally no. Section 5814(f) says the section doesn’t create a civil cause of action, and penalty claims for delayed benefits are generally handled through the WCAB.

What if the insurer paid my doctor late?

Late payments to providers are governed by Labor Code §4603.2. If your treatment was authorized promptly and the only dispute is the bill, §5814(e) says the delay isn’t unreasonable as to you.

Talk to a California workers’ comp lawyer

Employees First Labor Law represents workers exclusively in workers’ comp cases across California. We offer free virtual consultations if your benefits have been delayed or cut off. Contact us or call (310) 853-3461. The DWC Information and Assistance Unit also gives free help to injured workers.

This article is general information about California law as of 2026, not legal advice for your situation. Reading it does not create an attorney-client relationship.