Opinion ID: 719804
Heading Depth: 3
Heading Rank: 3

Heading: Twenty Percent Penalty

Text: 22 Finally, SSA appeals the Board's assessment of a twenty percent penalty for its late payment of interest due Sproull under the terms of the ALJ's compensation order. SSA paid the interest more than ten days after the order was filed. Under 33 U.S.C. § 914(f), [i]f 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. 23 Compensation is defined in the LHWCA as the money allowance payable to an employee or to his dependents as provided for in this chapter. 33 U.S.C. § 902(12). SSA argues that interest is not compensation because it is not expressly provided for in the LHWCA. The Director counters that interest is a necessary and inherent component of compensation because it ensures that the delay in payment of compensation does not diminish the amount of compensation to which the employee is entitled. 24 We recognized the necessity of imposing interest on the delayed payment of compensation benefits in Foundation Constructors, Inc. v. Director, OWCP, 950 F.2d 621, 625 (9th Cir.1991). In so doing, we deferred to the Director's interpretation that interest on past-due compensation serves the purposes of the LHWCA by fully compensating injured workers. See also Sea-Land Service, Inc. v. Barry, 41 F.3d 903, 910-11 (3d Cir.1994) (following Foundation and imposing interest on delayed payment of compensation). In addition, we reasoned that [a]llowing an employer to delay compensation payments interest-free would reduce the worth of such payments to the claimant, undermining the remedial intent of the Act. Foundation, 950 F.2d at 625. This reasoning is equally applicable here. We therefore defer to the Director's reasonable interpretation that interest is an inherent component of compensation and affirm the Board's imposition of a twenty percent penalty on SSA's late payment of interest.