Workers’ Comp – Late Payments – Employer Penalties – Docketing Application

An employer’s claim that it continued to pay a resort housekeeper at or above her workers’ comp rate after she returned to light-duty work does not relieve the employer of additional payments on claimant’s award; the commission erred in concluding that the wages employer paid claimant constituted compensation for purposes of determining whether all compensation due under the award had been paid and whether employer and carrier owed penalties and interest, the Court of Appeals holds.

The commission did not err in concluding employer’s application to terminate benefits was properly docketed.

Where, as here, a claimant under an outstanding award returns to work earning a wage at or above her pre-injury wage and employer unilaterally ceases making payments under the award, if the employer waits more than two years after the last date for which it paid compensation to request a hearing to terminate the award, it must pay “compensation” as defined by the act through a date no less than two years prior to the date on which it files its application for hearing.

Here, claimant returned to work on Aug. 1, 2004, at which time employer ceased making compensation payments under the award, and employer filed its application to terminate the award on July 8, 2008, almost four years later.
We hold the commission properly interpreted Va. Code § 65.2-708(C) as it applies to toll the provisions of subsection (A). The language of the statute prevails, and if the legislature had intended for Code § 65.2-708(C) to apply only to claimants’ change-in-condition applications, it could have said so. To the extent Rule 1.4’s purpose of policing the tendency of employers and insurers to terminate first and litigate later to the detriment of the claimant might conflict with the tolling provisions of Code § 65.2-708(C), the statute’s provisions would control. In any event, we detect no conflict. The issue of docketing employer’s application for a hearing is separate and distinct from the issue of whether the employer and carrier may subsequently be found to owe additional compensation and penalties under the ongoing award.

However, employer is not relieved from paying penalties for late payments. Virginia’s prior appellate decisions make clear in similar contexts that an employer who fails to comply with an outstanding award is not entitled to be excused from paying past due benefits and penalties simply because claimant returned to work at a wage equal to or greater than his pre-injury wage.

Here, although the commission notified employer the award had not been properly terminated and employer attempted to submit the paperwork necessary to terminate the award in the fall of 2004, the commission notified employer it had failed to submit certain additional paperwork required to process the termination request. Employer failed to act in response to that notice, and the commission notified employer on two additional occasions during 2005 that the award remained outstanding and it assumed payments under the award were ongoing. Despite repeated notifications from the commission, employer took no action whatever to seek termination of the open award for a period of more than three years. On these facts, we hold the commission erred in failing to order payment of the remaining past due compensation and penalties pursuant to Code § 65.2-524. The commission erred in not awarding penalties on all late paid compensation and interest on compensation remaining due during pendency of this appeal.

Affirmed in part, reversed in part and remanded.

Diaz v. Wilderness Resort Ass’n (Elder, J.) No. 1846-09-2, April 20, 2010; Workers’ Comp. Comm’n; Wesley G. Marshall for appellant; Christopher R. Costabile for appellee. VLW 010-7-141, 25 pp.