Attorney's fees for recovery of overdue temporary total disability income
benefits -- Interest on overdue benefits.
(1) Except as provided in KRS 342.020, no income benefits shall be payable for the
first seven (7) days of disability unless disability continues for a period of more than
two (2) weeks, in which case income benefits shall be allowed from the first day of
disability. All income benefits shall be payable on the regular payday of the
employer, commencing with the first regular payday after seven (7) days after the
injury or disability resulting from an occupational disease, with interest at the rate of
six percent (6%) per annum on each installment from the time it is due until paid,
except that if the administrative law judge determines that the delay was caused by
the employee, then no interest shall be due, or determines that a denial, delay, or
termination in the payment of income benefits was without reasonable foundation,
then the rate of interest shall be twelve percent (12%) per annum. In no event shall
income benefits be instituted later than the fifteenth day after the employer has
knowledge of the disability or death. Income benefits shall be due and payable not
less often than semimonthly. If the employer's insurance carrier or other party
responsible for the payment of workers' compensation benefits should terminate or
fail to make payments when due, that party shall notify the commissioner of the
termination or failure to make payments and the commissioner shall, in writing,
advise the employee or known dependent of right to prosecute a claim under this
chapter.
(2) If overdue temporary total disability income benefits are recovered in a proceeding
brought under this chapter by an attorney for an employee, or paid by the employer
after receipt of notice of the attorney's representation, a reasonable attorney's fee for
these services may be awarded. The award of attorney's fees shall be paid by the
employer if the administrative law judge determines that the denial or delay was
without reasonable foundation. No part of the fee for representing the employee in
connection with the recovery of overdue temporary total disability benefits withheld
without reasonable foundation shall be charged against or deducted from benefits
otherwise due the employee.
(3) All retraining incentive benefits awarded pursuant to KRS 342.732 shall be payable
on the regular payday of the employer, commencing with the second regular payday
after the award of the retraining incentive benefit by the administrative law judge
becomes final. Retraining incentive benefits shall be due and payable not less often
than semimonthly.
(4) Upon written request of the employee, all payments of compensation shall be
mailed to the employee at his or her last known address.
Effective: July 14, 2018
History: Amended 2018 Ky. Acts ch. 40, sec. 3, effective July 14, 2018. -- Amended
2017 Ky. Acts ch. 17, sec. 2, effective June 29, 2017. -- Amended 2010 Ky. Acts ch.
24, sec. 1785, effective July 15, 2010. -- Amended 2000 Ky. Acts ch. 514, sec. 4,
effective July 14, 2000. -- Amended 1996 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 54,
effective December 12, 1996. -- Amended 1996 Ky. Acts ch. ch. 355, sec. 7,
effective July 15, 1996. -- Amended 1994 Ky. Acts ch. 181, part 15, sec. 76,
effective April 4, 1994. -- Amended 1990 Ky. Acts ch. 21, sec. 1, effective July 13,
1990; and ch. 515, sec. 1, effective July 13, 1990. -- Amended 1987 (1st Extra. Sess.)
Ky. Acts ch. 1, sec. 7, effective October 26, 1987. -- Amended 1982 Ky. Acts ch. 7,
sec. 1, effective July 15, 1982. -- Amended 1972 Ky. Acts ch. 78, sec. 13. --
Amended 1956 Ky. Acts ch. 77, sec. 4, effective August 1, 1956. -- Amended 1948
Ky. Acts ch. 64, sec. 4. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective
October 1, 1942, from Ky. Stat. sec. 4887.
Legislative Research Commission Note (7/14/2018). This statute was amended in
Section 3 of 2018 Ky. Acts ch. 40. Subsection (1) of Section 20 of that Act reads,
"Sections 1, 3, and 12 of this Act shall apply to any claim arising from an injury or
occupational disease or last exposure to the hazards of an occupational disease or
cumulative trauma occurring on or after the effective date of this Act."
Legislative Research Commission Note (6/29/2017). 2017 Ky. Acts ch. 17, sec. 5
provided that amendments made to this statute in 2017 Ky. Acts ch. 17, sec. 2 apply
to all worker's compensation orders entered or settlements approved on or after June
29, 2017, the effective date of that Act.
Notes of Decisions
Toyota Motor Mfg., Kentucky, Inc. v. Jason Tudor, 491 S.W.3d 496 (Ky. 2016).
· cites it 14× “The ALJ then found that Toyota, because it was not paying those benefits, was required to file notice of its failure to pay with the DWC pursuant to KRS 342.040. Because Toyota had not filed that notice, the ALJ concluded that Tudor's statute of limitations had been tolled.”
Akers v. Pike Cnty. Bd. of Educ., 171 S.W.3d 740 (Ky. 2005).
· cites it 14× “990 provides both civil and criminal penalties for a failure to *743 comply with KRS 342.040, but neither it nor any other statute provides a remedy for workers whose rights are affected by the failure to comply.”
Newberg v. Hudson, 838 S.W.2d 384 (Ky. 1992).
· cites it 20× “038 and KRS 342.040 and the effect of an employer’s failure to comply with these provisions.”
Travelers Indem. Co. v. Reker, 100 S.W.3d 756 (Ky. 2003).
· cites it 6× “It only authorizes, in addition to the remedies available to the worker under KRS 342.040, KRS 342.300, and 342.310(1), supra, punitive action against the insurer or self-insurer by the commissioner of the Department of Workers' Claims.”
Holbrook v. Lexmark Int'l Grp., Inc., 65 S.W.3d 908 (Ky. 2002).
· cites it 11× “A final argument is that KRS 342.040(1) is unconstitutionally arbitrary because it did not entitle the claimant to a “notice to prosecute” letter until more than two years after the February 15, 1995, manifestation of disability.”
J & v. Coal Co. v. Hall, 62 S.W.3d 392 (Ky. 2001).
· cites it 11× “In dismissing the claim, the ALJ noted that although the employer had failed to file a required Form SF-1, the filing of that form did not trigger the claimant’s right to notice of his right to prosecute a claim as set forth in KRS 342.040. Furthermore, the ALJ noted, because…”
Zurich Ins. Co. v. Mitchell, 712 S.W.2d 340 (Ky. 1986).
· cites it 4× “KRS 342.040 imposes a 12 percent interest penalty on delayed payments and KRS 342.”
Blackstone Mining Co. v. Travelers Ins. Co., 351 S.W.3d 193 (Ky. 2011).
· cites it 2× “020, both temporary and permanent, partial and total income benefits (including rehabilitation and retraining rights), KRS 342.040, 342.710, 342.732, and 342.730, as well as death and survivor benefits, KRS 342.”
Billy Baker Painting v. Barry, 179 S.W.3d 860 (Ky. 2005).
· cites it 9× “KRS 342.040 provided, in pertinent part: (1) Except as provided in KRS 342.”
Lizdo v. Gentec Equip., 74 S.W.3d 703 (Ky. 2002).
· cites it 6× “Determining that the employer had complied with its obligation under KRS 342.040, the ALJ concluded that the claim must be dismissed because it was not filed within the applicable period of limitations.”
City of Frankfort v. Rogers, 765 S.W.2d 579 (Ky. Ct. App. 1988).
· cites it 5× “KRS 342.040 unequivocally mandates that an employer who terminates voluntary *580 payments to one of its injured workers shall notify the Board of that fact.”
Kentucky Employers Mut. Ins. v. Coleman, 236 S.W.3d 9 (Ky. 2007).
· cites it 2× “For example, the Court noted that KRS 342.040(1) allows the imposition of interest at the rate of 18% if the ALJ finds that a "denial, delay, or termination in payment of income benefits was without reasonable foundation.”
— Ky. Rev. Stat. § 342.040(1) — 40 cases
Akers v. Pike Cnty. Bd. of Educ., 171 S.W.3d 740 (Ky. 2005).
“990 provides both civil and criminal penalties for a failure to *743 comply with KRS 342.040, but neither it nor any other statute provides a remedy for workers whose rights are affected by the failure to comply.”
Holbrook v. Lexmark Int'l Grp., Inc., 65 S.W.3d 908 (Ky. 2002).
“A final argument is that KRS 342.040(1) is unconstitutionally arbitrary because it did not entitle the claimant to a “notice to prosecute” letter until more than two years after the February 15, 1995, manifestation of disability.”
J & v. Coal Co. v. Hall, 62 S.W.3d 392 (Ky. 2001).
“In dismissing the claim, the ALJ noted that although the employer had failed to file a required Form SF-1, the filing of that form did not trigger the claimant’s right to notice of his right to prosecute a claim as set forth in KRS 342.040. Furthermore, the ALJ noted, because…”
Travelers Indem. Co. v. Reker, 100 S.W.3d 756 (Ky. 2003).
“It only authorizes, in addition to the remedies available to the worker under KRS 342.040, KRS 342.300, and 342.310(1), supra, punitive action against the insurer or self-insurer by the commissioner of the Department of Workers' Claims.”
— Ky. Rev. Stat. § 342.040(1_) — 1 case
— Ky. Rev. Stat. § 342.040(3) — 1 case
— Ky. Rev. Stat. § 342.040(l) — 1 case
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