Minnesota Statutes

Minn. Stat. § 176.225 (2026)

Additional Award As Penalty

✓ current as of May 2026

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Subdivision 1.Grounds.

Upon reasonable notice and hearing or opportunity to be heard, the commissioner, a compensation judge, or upon appeal, the court of appeals or the supreme court shall award compensation, in addition to the total amount of compensation award, of up to 30 percent of that total amount where an employer or insurer has:

(1) instituted a proceeding or interposed a defense which does not present a real controversy but which is frivolous or for the purpose of delay; or

(2) unreasonably or vexatiously delayed payment; or

(3) neglected or refused to pay compensation; or

(4) intentionally underpaid compensation; or

(5) frivolously denied a claim; or

(6) unreasonably or vexatiously discontinued compensation in violation of sections 176.238 and 176.239.

For the purpose of this section, "frivolously" means without a good faith investigation of the facts or on a basis that is clearly contrary to fact or law.

Subd. 2.Examination of books and records.

To determine whether an employer or insurer is liable for the payment provided by subdivision 1, the division, a compensation judge, or the Workers' Compensation Court of Appeals upon appeal may examine the books and records of the employer or insurer relating to the payment of compensation, and may require the employer or insurer to furnish any other information relating to the payment of compensation.

The right of the division to review the records of an employer or insurer includes the right of the special compensation fund to examine records for the proper administration of section 176.129, Minnesota Statutes 1990, section 176.131, Minnesota Statutes 1994, section 176.132, and sections 176.181 and 176.183. The special compensation fund may not review the records of the employer or insurer relating to a claim under Minnesota Statutes 1990, section 176.131, until the special compensation fund has accepted liability under that section or a final determination of liability under that section has been made. The special compensation fund may withhold reimbursement to the employer or insurer under Minnesota Statutes 1990, section 176.131, or Minnesota Statutes 1994, section 176.132, if the employer or insurer denies access to records requested for the proper administration of section 176.129, Minnesota Statutes 1990, section 176.131, Minnesota Statutes 1994, section 176.132, section 176.181 or 176.183.

Subd. 3.Defiance of division, compensation judge, or Workers' Compensation Court of Appeals, complaint.

If an insurer persists in an action or omission listed in subdivision 1, or does not permit the examination of books and records, or fails to furnish information as required, the commissioner or the chief administrative law judge shall file a written complaint with the commissioner of commerce. The complaint shall specify the facts and recommend the revocation of the license of the insurer to do business in this state. The Workers' Compensation Court of Appeals may also file a written complaint.

Subd. 4.Hearing before commissioner of commerce.

Upon receipt of a complaint filed under subdivision 3, the commissioner of commerce shall hear and determine the matter in the manner provided by chapter 14. On finding that a charge made by the complaint is true, the commissioner of commerce may suspend or revoke the license of the insurer to do business in this state. The insurer may appeal from the action of the commissioner revoking the license in the manner provided in chapter 14.

Subd. 5.Penalty.

Where the employer is guilty of inexcusable delay in making payments, the payments which are found to be delayed shall be increased by 25 percent. Withholding amounts unquestionably due because the injured employee refuses to execute a release of the employee's right to claim further benefits will be regarded as inexcusable delay in the making of compensation payments. If any sum ordered by the department to be paid is not paid when due, and no appeal of the order is made, the sum shall bear interest at the rate of 12 percent per annum. Any penalties paid pursuant to this section shall not be considered as a loss or expense item for purposes of a petition for a rate increase made pursuant to chapter 79.

Notes of Decisions

Cited in 30 cases (1 in the last 5 years), 1955–2025 · leading case: Kaluza v. Home Ins. Co., 403 N.W.2d 230 (Minn. 1987).

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Kaluza v. Home Ins. Co., 403 N.W.2d 230 (Minn. 1987). · cites it 32× “Finally, the compensation judge found that Kaluza was entitled to penalties under Minn.Stat. § 176.225, subds. 1 and 5, because Home’s conduct constituted an unreasonable, vexatious, and inexcusable delay in payment.”

Bergeson v. United States Fid. & Guar. Co., 414 N.W.2d 724 (Minn. 1987). · cites it 10× “Minn.Stat. § 176.225, subd. 1 (1986). This *727 penalty, plus the imposition of interest, usually will provide an appropriate remedy for loss sustained by an insurer’s foot-dragging or neglect.”

Wojciak v. N. Package Corp., 310 N.W.2d 675 (Minn. 1981). · cites it 8× “In that case we held that the Special Compensation Fund was required to pay an additional award pursuant to Minn. Stat. § 176.225 (1980) for the employer’s refusal to pay compensation and rejected the special fund’s argument that the additional compensation was not a “benefit”…”

Schmitz v. United States Steel Corp., 831 N.W.2d 656 (Minn. Ct. App. 2013). · cites it 8× “The court concluded that the civil action was therefore “intended to cover those situations where the insurer’s delay or denial of benefits goes beyond unreasonableness, neglect, or obstinance.” Id. at 727. The cause of action was defined as arising “where a person, such as an…”

Conwed Corp. v. Union Carbide Chemicals & Plastics Co., 634 N.W.2d 401 (Minn. 2001). · cites it 4× “[12] Such interest and penalties might include additional compensation paid to the employee as a penalty for inexcusable delay in the payment of benefits, Minn.Stat. § 176.225, subd. 5 (2000) or for interest paid to another employer or insurer in a dispute over liability, Minn.”

Springborg v. WILSON & CO. INC., 95 N.W.2d 598 (Minn. 1959). · cites it 24× “On September 22, 1954, employee filed a petition for the imposition of penalty under § 176.225, alleging a consistent pattern of abuse and neglect of employer, consisting of: (1) Failure to give prompt first-aid treatment; (2) delay in correct diagnosis of his injury; (3)…”

Kahl v. Minnesota Wood Specialty, Inc., 277 N.W.2d 395 (Minn. 1979). · cites it 7× “award of compensation benefits for a back injury, the employee filed an amended petition seeking the imposition of a penalty pursuant to § 176.225, upon allegations that the employer-insurer unreasonably and vexatiously refused and delayed payment of benefits.”

Nichols v. State, Off. of the Sec'y, 842 N.W.2d 20 (Minn. Ct. App. 2014). · cites it 6× “2d at 796 -97 (quoting Minn. Stat. § 176.225 (1961)). The supreme court held that the family could recover compensation under section 192.”

St. Martin v. KLA Enter., Inc., 269 N.W.2d 59 (Minn. 1978). · cites it 6× “The issue for review is whether an additional award assessed as a penalty against an uninsured employer for its failure to pay compensation, pursuant to § 176.225, is a “benefit” which relator is obligated to pay under § 176.”

Kulenkamp v. Timesavers, Inc., 420 N.W.2d 891 (Minn. 1988). · cites it 6× “” The Workers’ Compensation Court of Appeals further found that the compensation judge’s findings relating to primary liability lacked substantial evidentiary support and vacated them; but it also ruled that its decision was not intended to bar a subsequent denial of primary…”

Olson v. Midwest Printing Co., 347 N.W.2d 43 (Minn. 1984). · cites it 4× “In her objection to the notice of discontinuance, Olson made a claim for a penalty award under Minn.Stat. § 176.225, subd. 1 (1982). Olson supported her claim by attaching an affidavit to her objection that described American Mutual’s response when it was informed that she hired…”

Zanmiller v. Aetna Technical Servs., Inc., 379 N.W.2d 612 (Minn. Ct. App. 1985). · cites it 6× “See Minn.Stat. § 176.225. Appellant argues in the alternative that even if section 176.”

Show all 30 citing cases →

— Minn. Stat. § 176.225(1986) — 1 case

Bergeson v. United States Fid. & Guar. Co., 414 N.W.2d 724 (Minn. 1987). “Minn.Stat. § 176.225, subd. 1 (1986). This *727 penalty, plus the imposition of interest, usually will provide an appropriate remedy for loss sustained by an insurer’s foot-dragging or neglect.”

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