If there is a delay in payment on an approved settlement order, what is the employee entitled to?

If there is a delay in payment on an approved settlement order, what is the employee entitled to?

• A. 10% penalty only
• B. No penalty but entitled to interest
• C. Interest and a 10% penalty
• D. No entitlement

Answer: (C)

When an approved settlement order experiences a delay in payment, the employee is entitled to both interest and a 10% penalty. This provision is designed to protect the rights of employees by imposing a financial consequence on the party responsible for the delay. The 10% penalty serves as a form of compensation for the inconvenience and potential financial hardship caused by the delay. Additionally, the interest accrued on the overdue amount reflects the time value of money, acknowledging that the employee should not only receive the original settlement amount but also be compensated for the period during which they were deprived of those funds. This dual form of compensation—both the penalty and interest—ensures that employees are incentivized to receive their payments promptly and discourages delays by the responsible party.

When an approved settlement order experiences a delay in payment, the employee is entitled to both interest and a 10% penalty. This provision is designed to protect the rights of employees by imposing a financial consequence on the party responsible for the delay.

The 10% penalty serves as a form of compensation for the inconvenience and potential financial hardship caused by the delay. Additionally, the interest accrued on the overdue amount reflects the time value of money, acknowledging that the employee should not only receive the original settlement amount but also be compensated for the period during which they were deprived of those funds.

This dual form of compensation—both the penalty and interest—ensures that employees are incentivized to receive their payments promptly and discourages delays by the responsible party.