What are the Late Payment Penalties Applicable to Ill. Employers? 

Do You Know the Rule?

Two provisions in Illinois’ workers’ compensation statute authorize the Commission to penalize employers who refuse or delay the payment of benefits to an injured worker. At the same time, courts generally won’t impose such penalties where the employer has a reasonable and good-faith challenge to liability.  

An employer may have a good-faith challenge to liability if there is conflicting testimony, some of which is in its favor. For example, if some witnesses indicated the injury occurred on the street outside of the office building where the claimant works, rather than in or near the building, the employer may have a viable argument that the injury did not occur in the course and scope of employment. 

Section 19(l) 

This section authorizes the Commission to assess an employer that fails to timely pay TTD benefits. It applies to untimely payments, not to an employer’s delay in authorizing medical treatment.  

An employer could have a reasonable and good-faith argument that it is not liable based on medical evidence, to take one example. This is the case even if there is conflicting medical evidence that indicates the employer is liable. See, e.g. Mechanical Devices v. Industrial Comm'n, 344 Ill. App. 3d 752 (2003) (Commission's denial of section 19(l) penalties upheld where the employer relied on one medical expert's opinion that claimant's condition was not causally related to his injury and that his back condition was congenital.).  

Section 19(k)  

This section authorizes the Commission to penalize an employer where there has been: 

1. Any “unreasonable or vexatious delay of payment”; or  

2. Intentional underpayment of compensation. 

Under this section, the Commission may award compensation on top of what the employee is already due equal up to 50 percent of the amount payable. 

“Payment” means the act of paying or giving compensation and it does not include the act of authorizing medical treatment. Thus, an employer cannot be penalized under this provision for failing to provide, revoking, or delaying medical authorization. 

Again, courts generally won’t award a penalty if the employer has a reasonable and good-faith argument that it is not liable. For example, if there is some testimony that the injury occurred outside the course and scope of employment, the employer likely has a good-faith argument. See, e.g., Bowen v. Illinois Workers’ Compensation Comm’n, Nos. 4-22-0575WC, 4-22-0576WC cons (Ill. App. Ct. 10/02/23) (Holding that the employer had a good-faith argument where the claimant testified that his right knee gave out while climbing into the cab of his semi-truck but other witnesses testified that the employee informed them that his right knee gave out while walking across the parking lot to his truck.). 

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