Penalties and Bankrupt Employers

In re: Melvin L. Blackwood, BIIA Dec 10 15912 (2011): The Department issued a penalty Order for unreasonable delay in payment of time loss compensation, omitting a period in excess of one year, during which the employer had gone bankrupt. The Board determined that the Department erroneously omitted this period, and that, because the Department was charged with assumption of the bankrupt employer’s responsibility to the worker, it was incumbent upon the Department to remit payment of the penalty amount to the worker.

Summary:  The Department will be charged with payment of any penalties due the worker, which are not paid by a bankrupt employer.