How Late Is Late? When a Workers’ Comp Delay Gets 20% More

February 15, 2026
Abrams Landau Injury Law

Virginia Workers Compensation Commissioner Ferrel Newman was a brilliant defense lawyer with whom Doug Landau had cases before Newman was elevated to the bench. As one of the 3 Full Commissioners, Judge Newman is generous with his time, teaching at Continuing Legal Education Programs, such as the recent Virginia Trial Lawyers Advanced Workers Comp Retreat, where Doug Landau was also a member of the faculty.

In an opinion authored by Commissioner Newman, the Virginia Workers’ Compensation Commission made one thing clear. If a settlement check is very late, the 20% penalty under Code § 65.2-524 applies, even if the employer tries to characterize part of the payment as something other than “compensation.” In a recent case, the Full Commission unanimously reversed a Deputy Commissioner and imposed a $20,000 penalty for late payment of settlement funds. The parties reached a full-and-final settlement for $250,000. At the time of settlement:
  • The claimant was not a Medicare beneficiary
  • She had not applied for SSDI
  • She indicated no intention to do so within 30 months
Even so, the parties voluntarily agreed to allocate $100,000 toward potential future Medicare-covered expenses. The settlement language stated:

Being short -changed is NOT something Doug Landau’s clients want to happen in their workers comp claims!

“These funds will be paid directly to the claimant and are intended to be used for medical purposes related to this claim.”
The Commission entered the Order approving the settlement on September 13, 2024. After entry of the Order:
  • The carrier promptly issued approximately $150,000 via direct deposit to the claimant and her counsel.
  • The remaining $100,000 was issued as two checks mailed to the claimant.
However, the carrier sent those checks to the wrong address.

Experienced workers comp lawyers like Joel Young of Fredericksburg/Stafford/Spotsylvania, & Herndon’s Doug Landau, know how to enforce the laws meant to protect injured employees and other Workers Comp recipients.

When the error was discovered on October 30, 2024, the carrier cancelled the checks and reissued them to the correct address. The claimant did not receive the funds until November 6, 2024, which is 55 days after entry of the settlement order. The claimant sought penalties under Code § 65.2-524, which provides for a 20% penalty when compensation is not timely paid. The Deputy Commissioner denied the request, reasoning that because the $100,000 was intended for future medical purposes, it did not constitute “compensation.” The Full Commission unanimously reversed. Commissioner Newman’s opinion rejected the carrier’s argument outright. The Commission emphasized:
  • The $100,000 was not a CMS-mandated Medicare Set-Aside.
  • It was a voluntary allocation.
  • There was no requirement that the claimant establish a separate, sequestered account.
  • The claimant was free to use the funds immediately and for any purpose.
The Commission held
“The entire lump sum was compensation awarded to the claimant which the defendant was obliged to timely disburse.”
Because the funds were compensation, and because they were paid 55 days after the Order, the 20% statutory penalty applied. This resulted in an additional $20,000 for the claimant. This decision reinforces several important principles in Virginia workers’ compensation law:
1. Labels Do Not Control
Calling part of a settlement an “allocation” does not remove it from the definition of compensation if the claimant receives the money directly and may use it immediately.
2. Mailing Errors Are Not Excuses
Sending checks to the wrong address does not toll the statutory deadline. Administrative mistakes can be costly.
3. VERY Late Means 20%
When settlement funds are significantly delayed after entry of an Order, the Commission will enforce the penalty statute, so carriers must strictly comply with payment timelines.

Just like waiting for a train, Doug Landau & his clients do not like to wait for their comp checks!

If you settle your workers’ compensation case, the employer or carrier must pay all of it on time. Delays of weeks beyond entry of the Order can trigger a substantial penalty. In this case, that meant an additional $20,000 owed to the claimant. If your settlement funds were delayed, shorted, or improperly structured, you may be entitled to penalties. Because every workers’ compensation case, and every settlement payment issue, is different, our Workers’ Compensation Team at Abrams Landau helps injured workers understand their rights and enforce them when insurance companies fall short. If your benefits or settlement funds have been delayed, underpaid, or improperly handled, don’t wait. Lawyer Doug Landau and the team at ABRAMS LANDAU, Ltd. are committed to helping you get the legal help you need. Contact us today for experience guidance at frontdesk@landaulawshop.com or call/text us at (703) 796-9555.

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