The Longshore and Harbor Workers’ Compensation Act (“LHWCA”) has been an integral part of the federal workers’ compensation scheme since it was adopted by Congress in 1927. From the date of its adoption to the present-day, the LHWCA has undergone various amendments. However, one part of the LHWCA that has never been amended is Section 14(f), which provides for a 20% penalty of any unpaid compensation awarded to a Claimant by a judge’s order.

How Courts have Ruled on Section 14(f)

Section 14(f) of the LHWCA provides:

“(f) If any compensation, payable under the terms of an award, is not paid within ten days after it becomes due, there shall be added to such unpaid compensation an amount equal to 20 per centum thereof, which shall be paid at the same time as, but in addition to, such compensation, unless review of the compensation order making such award is had as provided in section 21 and an order staying payments has been issued by the Board or court.”

The language in the LHWCA is unambiguous as to when this penalty should be assessed. Despite the unambiguous language of the LHWCA, there have been cases challenging the enforcement of the Section 14(f) penalty due to equitable considerations. The Federal Courts, however, have been particular and uniform in their enforcement of the Section 14(f) 20% penalty. Specifically, the U.S. Fifth and Ninth circuits have both held, “As equitable considerations are not applicable, the courts have stated that the relevant factors for imposition of the Section 14(f) assessment are (1) date payment was due; (2) whether 10 days elapsed; and (3) calculation of the 20 percent assessment.” In other words, there is no way around Section 14(f)’s 20% penalty once those three factors are met.

The Lesson for Employers and Carriers

Even if a Claimant agrees to pause or terminate compensation payments, employers and carriers should always make sure that the Claimant is not receiving those payments as a result of a judge’s order.