SUMMARY OF PENNSYLVANIA

WORKERS’ COMPENSATION LAW

 

By

Kevin L. Connors, Esquire

The following is a broad summary of practices and procedures under Pennsylvania’s Workers’ Compensation Act, 77. P.S. § 1-1031,

 

I.          Filing Deadlines:

 

Employee required to report injury to employer within 21 days of occurrence, for notice provisions of WCA; notice must be to management.

 

If not report within 120 days of injury, claim is time-barred under WCA. The same is true whether alleging physical injury, psychological injury, or occupational disease. 

Report of Injury required to be filed with the Bureau of Workers’ Compensation by employer within 48 hours of fatal injury, and within 7 days of other injuries.

There is a 7 day waiting period for the payment of wage loss disability benefits following injury. 

 

Beyond the 7 day waiting period, the injured employee is entitled to be paid wage loss disability benefits.  Benefits are payable back to the first date of disability, if disability exceeds 14 days post-injury. 

Wage loss disability payments must be made on the same schedule as the payment of wages pre-injury.  If benefits, inclusive of wage, medical, interest, attorneys’ fees, and/or penalties, are awarded to injured employee, under a Bureau-circulated WCJ decision, the benefits must be paid within thirty 30 days of issuance of the award/decision. 

II.        STATUTE OF LIMITATIONS:

 

A 3 year statute of limitations applies to the filing of a Claim Petition, seeking workers’ compensation benefits for an alleged work injury.

If workers’ compensation benefits are terminated, either by agreement or by decision, the injured employee has a 3 year statute of limitations to seek reinstatement of compensation, and to strike the effective termination of compensation benefits.

 

If compensation benefits have been suspended, and/or modified, based upon an injured employee again being able to return to work at wages equal to or greater than the pre-injury average weekly wage, or, if the injured employee is earning less than the pre-injury average weekly wage, the injured employee has a 500 week statute of limitations to reinstate temporary total disability benefits, to strike a suspension or modification.

 

Any employer or insurer seeking to limit an injured employee’s receipt of wage loss disability benefits in reliance upon an impairment rating evaluation cannot seek to convert a temporary disability claim to a permanent disability claim, until the injured employee has received 104 weeks of total disability benefits; the total disability benefits need not be cumulative, but they cannot be partial disability benefits.

The statute of limitations for an occupational disease claim is 300 weeks from date of last exposure. 

 

Appeal from a decision circulated by a workers’ compensation judge must be filed within 20 days of the circulation date of the decision. The appeal must be filed with the Workers’ Compensation Appeal Board; a party seeking Supersedeas from a decision issued by a WCJ must file the Supersedeas Petition within the same timeframe as the appeal, being 20 days from decision circulation date.

Any appeals from the Appeal Board to the next appellate level, the Pennsylvania Commonwealth Court, must be filed within 30 days of the decision circulation date.

 

III.       COMPENSATION BENEFIT RATE SCHEDULES:

 

2011 – 2012 - 2013

 

Maximum: $858.00

01/01/11

Maximum: $888.00

01/01/12

Maximum: $917.00

01/01/13

$1,287.00/$643.51 = 66 2/3%

$1,332.00/$666.01 = 66 2/3%

$1,375.50/$687.76 = 66 2/3%

$643.50/$476.67 = $429.00

$666.00/$493.33 = $444.00

$687.75/$509.44 = $458.50

$476.66/Less = 90%

$493.32/Less = 90%

$509.43/Less = 90%

 

A.        AVERAGE WEEKLY WAGE CALCULATION:

 

The injured employee’s average weekly wage is calculated using the gross wages of the employee over the 52 weeks prior to the work injury. 

 

The 52 weeks are divided into 4 – 13 calendar quarter periods. The 3 highest 13 week periods are added together, and divided by 3, resulting in the average weekly wage.

 

If the injured employee has worked less than a full calendar quarter, wages are based upon the “expectations of the parties”. 

IV.       SCHEDULE/SPECIFIC LOSSES:

The following schedules apply to specific losses, either as total/partial amputations, or as “complete loss of use for all practical intents and purposes”:

 

            Member

Weeks

 

 

            Thumb

100

            First Finger

50

            Second Finger

40

            Third Finger

30

            Fourth Finger

28

            Hand

335    

            Arm

410

            Big Toe

40

            Others Toes

16

            Foot

250

            Leg

410

            Eye

275

            Eye and Leg

710

            Eye and Hand

630

            Eye and Foot

450

            Two (2) Arms

TTD

            Two (2) Hands

TTD

            Two (2) Legs

TTD

            Two (2) Feet

TTD

            Disfigurement

0-275 (left to Judge’s discretion).

 

V.        MOST COMMONLY USED WC FORMS:

 

Title

WC Bureau Number

Medical Report Form

LIBC-9

Appeal from Judge’s Findings

LIBC-25

Agreement for Compensation

LIBC-336

Supplemental Agreement

LIBC-337

Employer’s Report of Injury

LIBC-344

Answer to Claim Petition

LIBC-374

Answer to Petition to

LIBC-377

Statement of Wages

LIBC-494

Notice of Compensation Payable

LIBC-495

Notice of Compensation Denial

LIBC-496

Physician’s Affidavit of Recovery

LIBC-497

Notice of Temporary Compensation Payable

LIBC-501

Notice Stopping Temporary Compensation

LIBC-502

Utilization Review

LIBC-601

Compromise & Release Agreement

LIBC-755

Notice of Ability to Return to Work

LIBC-757

Notification of Suspension/Modification

LIBC-751

 

VI.       GENERAL PRINCIPLES:

 

Injuries occurring in the course and scope of employment and related thereto are compensable under the Act.

Pennsylvania utilizes the AMA Guidelines to determine impairment ratings, although the same guidelines have no application whatsoever to a disability claim.

 

Appeals of decisions have three levels, from WCJ to Appeal Board, from Appeal Board to Commonwealth Court, and from Commonwealth Court to Supreme Court.

The Commonwealth Court averages about four compensation decisions per month. 

 

The Supreme Court averages about three or four compensation decisions per year.

 A.        COMPENSATION BENEFITS:

There are six compensation benefits available under the Pennsylvania WCA.

 

The compensation benefits are: 

·         Temporary compensation benefits;

·         Temporary total disability benefits (total disability wage loss);

·         Temporary partial disability benefits (difference between pre-injury wages and post-injury wages – subject to 500 week limitation);

·         Specific loss benefits (payable for amputation, complete loss of use of body part, or facial scars);

·         Death benefits, payable if the fatality is work-related;

·         Medical compensation benefits (payable for reasonable, necessary and related medical care for work injuries);

 

Compensation benefits are payable for work-related injuries occurring in the course and scope of employment, excluding intentionally self-inflicted injuries, injuries occurring as a result of a violation of law, such as when incapacitated due to intoxication or drugs, when violating a positive work order of the employer, when injury is caused by “personal animus), or where there is no employer/employee relationship.

 

Temporary total disability benefits are payable when an injured employee is disabled from performing pre-injury job.

 

Partial disability benefits are payable if the injured employee is capable of working, with some presumption of continuing disability, and earning less than pre-injury wages.

 

Permanent partial disability is recognized in the context of specific loss claims and claims governed by impairment rating evaluations, but only where the impairment rating is less than 50% of a whole man threshold.

 

Permanent partial disability is compensable if an injured employee loses two appendages.

 

Death benefits are payable as long as the fatality is related to the work injury.

 

Workers’ compensation is regarded as an exclusive remedy, providing the employer with statutory immunity from tort-based liability, so long as the employee is insured for workers’ compensation.

 

The WCA is regarded as being both humanitarian, and an affirmation of public social policy.

 

B.        CLAIM PROCEDURES:

           

Pennsylvania Workers’ Compensation procedures are form-intensive, as every change in the compensation status of a claim requires that the change be recognized with the filing of the appropriate compensation form.

 

Most commonly used compensation forms are:

 

            Report of Injury (when injury is reported to employer);

            Notice of Compensation Payable (claim being accepted with injury and wage rates identified);

            Notice of Compensation Denial (when claim being denied, requiring basis be identified);

            Notice of Temporary Compensation Payable (temporary compensation benefits are payable for ninety (90) days without admission of liability as to injury or disability);

            Notice Stopping Temporary Compensation Payable (required to be filed before expiration of ninety (90) day temporary compensation period);

            Supplemental Agreement (post-claim acceptance form evidencing employee change in status, either as to return-to-work, or as to reinstatement, if work is stopped);

            Notice of Ability to Return to Work (form advising employee that they are medically released to return to work); (with mandatory issuance prior to any employer job offer being extended);

            Statement of Wages (provides basis to calculate pre-injury average weekly wage and compensation payable rate);

            Compromise & Release Agreement by Stipulation (document used to settle workers’ compensation claims, subject to approval by WCJ);

            Utilization Review (challenge to reasonableness and necessity of medical care);

            Physician’s Affidavit of Recovery (attesting to full recovery post-injury);

            Notification of Suspension/Modification (used to suspend or modify wage loss benefits within 7 days of return to work.

Reporting of injury claim with disability requires acceptance, denial, or agreement to pay temporary compensation benefits, within 21 days of first day of claimed disability from work injury.

 

Claim acceptance requires payment on weekly/biweekly schedule of temporary total disability benefits (TTD) to employee, without specific statutory time limitation, subject to change if the employee’s disability/ability to return to work status.

Claim acceptance results in the employer/insurer obligation to continue paying workers’ compensation benefits for both wage loss and medical expenses until:

 

·         Employee dies from non-work-related causes;

·         Employee sufficiently recovers from work injury to be able to return to some level of work;

·         If employee returns to work at pre-injury wages, wage loss benefits are suspended, and medical compensation benefits continue;

·         If employee returns to work at wages less than pre-injury wages, the employee receives temporary partial disability benefits, payable as 2/3 of the difference between pre-injury wages and post-injury wages, subject to 500 week limitation;

·         Impairment rating evaluation determines, after the Claimant has received 104 weeks of temporary total disability benefits, that the Claimant’s impairment rating is less than 50% under a whole person impairment standard, resulting in wage loss benefits being paid as temporary partial disability benefits, subject to the 500 week limitation;

·         An employee returns to work and the employer/insurer suspends or modifies wage loss benefits with the filing of a Notification of Suspension/Modification within 7 days of return-to-work;

·         An employee executes a Supplemental Agreement, evidencing a suspension, modification or termination of wage loss compensation benefits;

·         A WCJ orders wage loss benefits to suspend, modify, or terminate, in reliance upon evidence from the employer/insurer that the Claimant’s compensation status has changed, either due to full recovery from work injury, or due to employee sufficiently recovering from work injury to be capable of working with “earning power”;

·         The employee and employer/insurer settle the claim under a Compromise & Release Agreement, required to be approved by WCJ, with the WCJ’s jurisdiction over the Compromise & Release Agreement limited to determining whether the employee understands the “legal significance” of the settlement agreement.

 

Employers/insurers are entitled to credits for unemployment, employer-funded pension distributions, and a 50% credit for old age social security payments. 

C.        LITIGATION PROCEDURES:

 

Disputes over workers’ compensation claims are litigated before the Office of Adjudication, an office within the Bureau of Workers’ Compensation, a division of Pennsylvania Department of Labor and Industry.

 

This portal includes facts and information on filing claims, litigating claims, as well as information regarding hearing procedures before WCJs. 

Several workers’ compensation petitions are utilized to litigate claims, to include: 

·         Claim Petition (filed by employee alleging injury and seeking workers’ compensation benefits);

·         Review Petition (filed by either employee or employer, seeking administrative review of compensation claim);

·         Reinstatement Petition (filed by employee seeking reinstatement of wage or medical compensation benefits);

·         Termination Petition (filed by employer, seeking termination of compensation benefits, both wage and medical, with evidence that employee is fully recovered from work injury);

·         Suspension Petition (filed by employer, with evidence that the employee is sufficiently recovered from work injury to be able to return to work at wages equal to pre-injury wages);

·         Modification Petition (filed by employer, with evidence that the employee has sufficiently recovered from work injury to be able to return to work at wages less than pre-injury wages);

·         Petition to Seek Approval of a Compromise & Release Agreement (filed by either employee or employer, seeking WCJ approval of a settlement agreement);

·         Penalty Petition (filed by employee, seeking penalties against employer/insurer for alleged violation of the Act) (maximum penalty equals 50% of benefits that were payable in absence of alleged violation).

 

Petitions are filed electronically with the Bureau, which assigns the petitions to WCJs, with assignments typically based on the employee’s hearing district residence.

Following petition assignments to WCJs, the WCJs conduct hearings on either a serial hearing scheduling basis, or on a 1 day trial scheduling basis, with WCJs directed to follow the Special Rules before WCJs, in terms of all case management scheduling guidelines, as well as to seek closure of the evidentiary record within 12 months of the date of assignment to the Judge.

 

Closure of the record by the WCJ results in WCJ directing the submission of Proposed Findings of Fact and Conclusions of Law. 

Petition-filing party typically charged with the burden of proof as to the allegations raised, either in terms of the benefits or change in status sought.

Decisions issued by WCJs are circulated by the Bureau, and are appealable for 20 days post-circulation.

Statutorily-mandated mediation is required for all litigated Pennsylvania Workers’ Compensation claims.

Appeals from WCJ decision are filed with the Workers’ Compensation Appeal Board which permits the employee and employer to argue the appeal orally as well as in briefs.

The Appeal Board typically rules on appeals within 6-12 months of the appeal being filed. 

Appeals from Appeal Board ruling are subject to appeals for 30 days post-issuance.

Appeals from the Appeal Board are filed, via Petition for Review, with the Commonwealth Court. 

The Commonwealth Court has jurisdiction over all appeals from Pennsylvania administrative agencies.

The Commonwealth Court typically rules on appeals within 6-12 months of their filing, permitting argument both orally and by briefs.

Commonwealth Court rulings are appealable to the Pennsylvania Supreme Court within 30 days of issuance, subject to allocator being petitioned for before the Supreme Court. 

The Pennsylvania Supreme Court typically only averages between 1-4 workers’ compensation decisions per year, typically denying allocator, in the absence of the following:

 

·         Cases of first impression;

·         Cases involving public policy consideration;

·         Cases involving precedential uncertainty or confusion at the Commonwealth Court level.

D.        SETTLEMENTS:

Since 1996, Pennsylvania has permitted workers’ compensation claims to be settled, utilizing a Compromise and Release Agreement.

The settlements must be approved by a WCJ.

The procedure for settling a workers’ compensation claim, after the settlement agreement has been negotiated, is to either amend a pending petition to be a Petition to Seek Approval of a Compromise and Release Agreement, or to file a petition seeking approval of C&R.

The WCA specifically prohibits settlements of workers’ compensation claims, absent a WCJ approving the settlement under a C&R.

For a WCJ to approve a C&R, the WCJ must determine that the employee settling their workers’ compensation claim understands the “legal significance” of the settlement agreement, with the WCJ having no responsibility to determine if the settlement agreement is in the “best interest” of the employee.

The parties are permitted to settle all workers’ compensation benefits, to include wage loss, specific loss, death benefits, medical benefits, penalties, attorneys’ fees, and any other benefit or claim under the jurisdiction of the WCJ, and within the scope of the WCA.

Typically, settlement agreements are also conditioned upon resignations, although the WCJ has no authority to rule on any employment law issues, to include resignations, as well as any issues with respect to the ADA, the FMLA, EEOC, and/or ADEA.

 

E.        LIENS:

Pennsylvania recognizes the right of the employer to subrogate against an employee’s third-party personal injury/tort recovery.

Subrogation is empowered under Section 319 of the WCA.

 

Relevant factors are:

            Employer payment of workers’ compensation benefits;

            Work injury caused by third-party negligence;

            Employee recovers third-party settlement/award;

Employer/insurer entitled to recover payments of wage loss and medical compensation benefits, subject to pro rata attorneys’ fees and expenses.

The BWC requires the filing of a Third Party Settlement Agreement (LIBC-380) to record the following for subrogation lien recoveries:

 ·         Third-party recovery;

·         Workers’ compensation lien;

·         Expenses of recovery;

·         Balance of recovery;

·         Pro rata attorneys’ fees and expenses;

·         Reimbursement percentage rate;

·         Net subrogation lien recovery;

·         Grace period reimbursement rate.

Pennsylvania permits employer/insurers to intervene via interpleader in third-party action, and the Supreme Court has recognized direct subrogation actions by employers/insurers against third-parties.

 

VII.     MAJOR REFORM TIMELINES:

1915:               WCA enacted.

1972:               Requirement of proving a work accident eliminated, with post 1972 focus on proving a work-related injury, opening the door for repetitive/cumulative trauma injury claims.

1993:               Overhaul of provisions dealing with medical compensation benefits, implementing utilization review and medical fee schedules based on Medicare reimbursements.  Instituted concepts of panel providers, temporary compensation benefits without formal acceptance of claim.

1995:               Reform of hearing loss provision, implementing baseline testing and utilization of AMA Guidelines to prove binaural hearing loss.

1996:               Established temporary compensation period at 90 days, true also for panel treatment.  Instituted Compromise & Release Agreements, Special Supersedeas, and Notification of Suspension/Modification provisions.

2007:               Mandated Mediation, instituted security fund for uninsured employers.

VIII.    LINKS:

 

IX.       CONTACTS:

·         Kevin L. Connors: kconnors@connorslawllp.com

·         Kate A. O’Dell: kodell@connorslawllp.com

·         Jeffrey D. Snyder: jsnyder@connorslawllp.com

·         John J. Muldowney: jmuldowney@connorslawllp.com

·         Lisa A. Miller: lmiller@connorslawllp.com

 

ConnorsLaw LLP

 

Trust us, we just get it!  It is trust well spent!

 

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.