PENNSYLVANIA WORKERS' COMPENSATION CLAIM HANDLING GUIDELINES
- 1 DEFINITIONS
- 2 EXCLUSIVE REMEDY
- 3 JURISDICTION AND LIMITATIONS OF ACTIONS
- 4 COMPENSABILITY
5 EXCLUSIONS AND DEFENSES
5.1 Course of Employment
- 5.1.1 Engaged in the Furtherance of Employer’s Business
- 5.1.2 Not in Furtherance of Employer’s Business
- 5.1.3 Traveling Employees
- 5.1.4 Commuting
- 5.1.5 Premises and Parking Lot Cases
- 5.2 Related to Employment
- 5.3 Intentionally Self-Inflicted Injury or Death
- 5.4 Employee’s Violation of the Law, Intoxication, and Illegal Use of Drugs
- 5.5 Employee’s Violation of Positive Orders of Employer
- 5.6 Personal Animosity
- 5.7 Hostile Attacks
- 5.8 Retirement
- 5.1 Course of Employment
- 6.1 Calculation of Average Weekly Wage
- 6.2 Total Disability
- 6.3 Partial Disability
- 6.4 Amputation or Loss of Use
- 6.5 Disfigurement/Scarring
- 6.6 Loss of Sight
- 6.7 Loss of Hearing
- 6.8 Penalties
- 6.9 Interest
- 6.10 Costs
- 6.11 Counsel Fees
- 6.12 Death Benefits
- 6.13 Medical Benefits
- 6.14 Refusal of Medical Treatment
- 7 SUBROGATION OR CREDIT
- 8 ATTORNEYS
- 9 CLAIMS PROFESSIONALS
10 LITIGATION AND APPEAL
- 10.1 Workers’ Compensation Judge Proceedings
- 10.2 Workers’ Compensation Appeal Board
- 10.3 Commonwealth Court and Supreme Court
- 11 SETTLEMENT
- 12 INSURANCE
The term “employer” is synonymous with master and includes all natural persons, partnerships, joint stock companies, profit, non-profit, and municipal corporations, the Commonwealth, and all governmental agencies created by it. WCA Section 103, 77 P.S. § 21.
An alleged employer can be estopped from denying an employer/employee relationship where a third party agent represented to the employee prior to his entering into a lease agreement that he would be covered by workers’ compensation insurance. Tri-Union Express v. WCAB (Hickle), 703 A.2d 558 (Pa.Cmwlth. 1997).
The employer liable to pay benefits can be a borrowing employer if the employer has the right to control not only the work to be done but also the manner in which the borrowed employee performs the work, regardless whether control is actually exercised. JFC Temps, Inc. v. WCAB (Lindsay), 680 A.2d 862 (Pa. 1996). A professional on a temporary work assignment with a customer is not the employee of the customer where the right of control does not exist as the result of the professional’s qualifications, expertise, and training. Accountemps v. WCAB (Meyers), 548 A.2d 703 (Pa.Cmwlth 1988). In Redline Express Co. v. WCAB (Price), 588 A.2d 90 (Pa.Cmwlth 1981), Commonwealth Court reasoned that there must be a transfer of control to the borrowing employer of the right to select, hire, and fire, and that the mere transfer of the right to control the manner in which work is to be performed may be insufficient for a borrowing employer to become the employer.
The phrase “statutory employer” does not appear in The Pennsylvania Workers’ Compensation Act. But Pennsylvania courts have ruled that, “A statutory employer is a master who is not a contractual or common law one, but is made one by the Act.” Peck v. Delaware County Board of Prison Inspectors, 814 A.2d 185 (Pa. 2002). Generally, statutory employer status is found most frequently in the context of construction cases. But it can arise in other circumstances. For example, a municipality that ran an annual festival was found to be the statutory employer of claimant despite the fact that some of the traditional criteria were not met.
The statutory employer is liable for compensation to employees of a subcontractor unless the subcontractor has workers’ compensation coverage. A statutory employer, who under this Section is required to pay workers’ compensation, has a right to seek reimbursement from the subcontractor who is primarily liable. WCA Section 302(b), 77 P.S. § 462.
For purposes of this subsection, a person who contracts with another (1) to have work performed consisting of (i) the removal, excavation or drilling of soil, rock, or minerals or (ii) the cutting or removal of timber from lands, or (2) to have work performed of a kind which is a regular or recurrent part of the business, occupation, profession or trade of such person shall be deemed a contractor and such other person a subcontractor. This subsection shall not apply, however, to an owner or lessee of land principally used for agriculture, who is not a covered employer under this Act and who contracts for the removal of timber from such land.
In Six L’s Packing Company v. WCAB (Williamson), 44 A.3d 1148 (Pa. 2012), claimant was a truck driver employed by a trucking company, his primary employer, when he was injured in a motor vehicle accident while transporting tomatoes between a warehouse in Pennsylvania and a processing facility in Maryland, both owned by F. Garcia and Sons. Garcia was a farming and produce packing company which had no drivers or delivery vehicles of its own, and contracted with Six L’s, claimant’s employer, for the purpose of providing transportation of its products between its farms and processing facilities. Six L’s had no workers’ compensation insurance, as a result of which claimant alleged that Garcia was liable for his benefits as a statutory employer pursuant to Section 302(a). Pennsylvania Supreme Court engaged in a lengthy analysis of the traditional construction site statutory employer scenario embodied in Section 302(b) of The Pennsylvania Workers’ Compensation Act, 77 P.S. § 462, but ruled that Section 302(a) specifically addresses the subcontracting of a “regular or recurrent part” of a contractor’s business – a scenario unlikely to be present in construction type situations covered by Section 302(b). In short, statutory employer liability in Pennsylvania extends beyond the traditional construction site situation to any contract of a regular or recurrent part of the contractor’s business if the subcontractor is uninsured and its employees are injured.
“Employee” is synonymous with servant and includes all natural persons who perform services for another for a valuable consideration. WCA Section 104, 77 P. S. §22. Executive officers of corporations, other than elected officials of the Commonwealth or its political subdivisions, are employees under the Act. WCA Section 104, 77 P.S. §22. An executive of a corporation may opt out of the Act if the executive has a certain percentage of ownership interest in Subchapter C or S-corporations as defined by the Tax Reform Code of 1971 . WCA Section 104, 77 P.S. §22.
The election to opt out of the Act may have consequences for claimants other than the employee/executive officer. For example, in Schafer v. WCAB (Martin Schafer, Jr., Inc.), 935 A.2d 890 (Pa.Cmwlth 2007), Commonwealth Court held that a widow was not entitled to fatal claim benefits where the employee was the president and sole shareholder of a privately held corporation and had waived his rights to benefits by executing an Affidavit electing not to be an employee for purposes of the Act. It is also worth noting that opting out of the Act may leave an employee uninsured depending upon the terms of other healthcare coverage which exists.
An illegal alien is not excluded from the definition of “employee” under the Act as a matter of public policy in Pennsylvania. Reinforced Earth Company v. WCAB (Astudillo), 810 A.2d 99 (Pa. 2002).
The employee of one person may become the employee of another to whom the employee is loaned if the worker passes to the right of control of the borrowing employer with regard to both the work to be done, but also the manner in which the work is to be performed. JFC Temps, Inc. v. WCAB (Lindsay), 680 A.2d 862 (Pa. 1996). There is a presumption that the original master remains in control and the responsible employer in the event of an injury unless that presumption is overcome by evidence that the borrowing employer assumed control. American Rock Mechanics, Inc. v. WCAB (Bik), 881 A.2d 54 (Pa.Cmwlth. 2005).
As summarized in the definition of “employer,” above, Pennsylvania Commonwealth Court has reasoned that there must be a transfer of control of the borrowing employer of the right to select, hire, and fire, and that mere transfer of the right to control the manner in which the work is to be performed alone may not be sufficient for the borrowing employer to become the responsible employer under Pennsylvania law. Red Line Express Co. v. WCAB (Price), 588 A.2d 90 (Pa.Cmwlth. 1991).
(1) General Rule
If the manner and means of performing the work are with a master, if the tools and other implements of work are supplied by the master, and if taxes are withheld, generally, the servant will be an employee of the master. Southland Cable Company v. WCAB (Emmett), 598 A.2d 329 (Pa.Cmwlth 1991).
(2) Construction Workplace Misclassification Act
On February 1, 2011, The Construction Workplace Misclassification Act (CWMA) became effective, applying to employees in the construction industry. An individual who performs services in the construction industry for remuneration is an independent contractor only if all of the following criteria are satisfied:1.The individual has a written contract to perform such services.
2. The individual is free from control or direction over performance of such services both under the contract and in fact.
3. The individual is customarily engaged in an independently established trade, occupation, profession, or business, defined as involving a person who:
a. possesses the tools, equipment, and other assets necessary to perform the work.
b. is responsible for realizing a profit or loss from the service involved.
c. performs the service through a business for which the individual has an ownership interest.
d. maintains a separate business location.
e. has previously engaged in similar services while free from the direction and control of others.
f. maintains liability insurance of at least $50,000.00.
In Dept of Labor and Industry, UEGF v. WCAB (Lin and Eastern Taste), 187 A .3d 914 (Pa. 2018), Pennsylvania Supreme Court concluded claimant in the case, who has a laborer working to remodel a structure which would eventually be opened as a restaurant, was not covered by the CWMA. In the course of the remodeling work, the claimant sustained a serious, permanently disabling injury. he filed a claim asserting that he was an employee and not an independent contractor because he had been misclassified by the restaurant owner. Commonwealth Court, in rejecting claimant’s argument, stated that an employer subject to the Construction worker Misclassification Act is “someone in the business of construction. that would not include a homeowner who hires somebody to build a porch.” The court stressed tat the purpose of the CWMA was to stop “deceptive business practices” in the construction industry. These considerations led the court to conclude that the “CWMA was intended to regulate those entities, not entities such as restaurants that undertake a remodeling project.” Thus, claimant had the burden of proving that he was an employee and not an independent contractor at the time of his injuries.
(3) Specific Criteria
An independent contractor is not an employee because of the absence of a master/servant relationship. The factors to consider in determining whether a claimant is an independent contractor or an employee include the terms of the employment between the parties; the nature of the work or occupation; the skill required for the performance of the work; whether the one employed is engaged in distinct occupation or business; which party supplied the tools; whether payment is by time or by the job; whether the work is part of the regular business of the alleged employer; and also the right to terminate the employment at any time. Hammermill Paper Company v. Rust Engineering Co., 243 A.2d 389 (Pa. 1968).
The primary factor is the right to control the work to be done or the manner in which it is to be performed regardless of whether the right is exercised. Northern Centennial Bank and Trust Company v. WCAB (Kontz), 489 A.2d 274 (Pa.Cmwlth 1985). Pennsylvania courts do not look to any particular factor in the test set forth in Hammermill Paper Company, but some factors have greater weight than others. Thus, where the right to control a claimant’s activities exists, an employment relationship exists even though the claimant was able to decline work whenever he chose to do so. Baum v. WCAB (Hitchcock) 721 A.2d 402 (Pa.Cmwlth 1998).
Pennsylvania recognizes an emergency doctrine. A person responding in an emergency can become an employee under this doctrine. The person must establish that help was solicited and that he/she was not acting as a mere volunteer. Borough of Phoenixville v. WCAB (Colledge), 606 A.2d 578 (Pa.Cmwlth. 1992).
The Pennsylvania Workers’ Compensation Act is the exclusive remedy available to employees who sustain work-related injuries, illnesses, or diseases. WCA Section 303(a), 77 P.S. §481, states, “The liability of an employer under this act shall be exclusive and in place of any and all liability to such employees, his legal representative, husband or wife, parents, dependents, next of kin, or anyone otherwise entitled to damages in any action at law or otherwise on account of any injury or death . . . or occupational disease . . .”Kline v. Arden H. Verner Co., 469 A.2d 158 (Pa. 1983). Even if a workers’ compensation claim is barred by expiration of a statute of limitations or statute of repose, immunity from civil suit remains. Sedlacek v. A. O. Smith Corp., 990 A.2d 801 (Pa.Super. 2010). Pennsylvania courts have ruled that immunity from tort liability under the Act is not an affirmative defense. Rather, the Act deprives courts of subject matter jurisdiction, which can never be waived. LeFlar v. Gulf Creek Industrial Park #2, 515 A.2d 875 (Pa. 1986) . A parent company is nevertheless liable in tort to a suit filed by an employee of a wholly owned subsidiary. Kiehl v. Action Manufacturing Co., 535 A.2d 571 (Pa. 1987). A statutory employer is also immune from suit.
WCA Section 303(b), 77 P.S. §481(b), provides that where an injury or death to an employee is caused by a third party, then the employee, his legal representative, husband or wife, parents, dependents, next-of-kin, and anyone otherwise entitled to receive damages “may bring their action at law against such third party, but the employer, his insurance carrier, their servants and agents, employees, representatives acting on their behalf or at their request shall not be liable to a third party for damages, contributions, or indemnity in any action at law or otherwise unless liability for such damages, contributions or indemnity shall be expressly provided for in a written contract entered into by the party alleged to be liable prior to the date of the occurrence which gave rise to the action.” In Tsarnas v. Jones & Laughlin Steel Corp., 412 A.2d 1094) Pennsylvania Supreme Court ruled that this clause is constitutional.
WCA Section 305, 77 P.S. §501, specifically confers all of the employer’s immunity from suit on the employer’s workers’ compensation carrier. However, the insurance carrier is not immune for the negligence of its agents providing medical treatment on the ground that medical treatment is a separate and distinct function of the carrier which does not concern the employer and is not part of employer’s business operations. Tropiano v. Travelers Ins. Co., 319 A.2d 426) Tropiano applies only where the physician is directed and controlled by the insurance carrier.
Despite 100 years of precedent upholding the exclusive remedy provisions as unambiguous, Pennsylvania Supreme Court, in Tooey v. A.K. Steel, ARMCO Steel, Crown Cork and Seal, et al., 81 A.3d 851 (Pa. 2013) carved out the first ever exception to the exclusive remedy clause of the Act. Although WCA Section 303(a), 77 P.S. § 481, provides that, “The liability of an employer under this act shall be exclusive and in place of any and all other liability to such employees… or anyone otherwise entitled to damages in any action at law or otherwise on account of any injury or death as defined in section 301(c)(1) and (2) or occupational disease as defined in section 108,” the Supreme Court has nonetheless created an exception for latent occupational diseases.
Under WCA Section 301(c) (2), 77 P.S. § 411(2), compensation is provided for an occupational disease only if the “disability or death resulting from such disease [occurs] within three hundred weeks after the last date of employment in an occupation or industry to which [the claimant] was exposed to hazards of such disease.” In Cable v. WCAB (Gulf Oil / Chevron USA, Inc.), 664 A.2d 1349 (Pa. 1995), Pennsylvania Supreme Court ruled that it is the last date of exposure, not the last date of employment, which triggers the beginning of the 300 week period. It has long been understood that in the case of a disease which manifests after the expiration of the 300 week period, no claim can be filed and no WC remedy exists in light of the language of Section 303(a) quoted above. Supreme Court's Opinion in Tooey changes this result and provides for a common law tort cause of action against the Employer in such cases.
The claimant, Edward Tooey, sold asbestos products from 1964 until 1992. In 2007, he was diagnosed with mesothelioma, a rare cancer invariably caused by asbestos exposure. The medical testimony in the case established that the typical latency period for development of mesothelioma from asbestos exposure is anywhere from 30 to 45 years, or long after the 300 week limitation.
Pennsylvania Supreme Court observed that the 300 week statute of repose at WCA Section 301(c)(2) renders recovery or any remedy impossible for the Claimant or any similarly situated worker. In concluding that the bar to a WC claim does not bar a tort claim, however, the court relied upon its long stated analysis that the Pennsylvania Workers’ Compensation Act is “remedial in nature and intended to benefit the worker, and, therefore, the Act must be liberally construed to effectuate its humanitarian objectives.” Lancaster General Hospital v. WCAB (Webber-Brown), 47 A.3d 831, 839 (Pa. 2012). The court reasoned further that application of the 300 week time limitation in Section 301(c)(2) in cases involving latent asbestos related mesothelioma negates “the quid pro quo contemplated by the Act [which] cannot be effectuated. The employee does not benefit from ‘expeditious payment of compensation’ and in fact has no reasonable opportunity to obtain compensation at all.”
Supreme Court was critical of the argument of the employers in the Tooey case that the remedies of the Pennsylvania WC Act “are exclusive, even where compensation is unavailable…” The court reasoned that the interpretation of the Act proffered by the employers in Tooey would “prohibit an employee from filing an action at common law, despite the fact that the employee has no opportunity to seek redress under the Act, [and] leaves the employee with no remedy against his or her employer, a consequence that clearly contravenes the Act’s intended purpose of benefiting the injured worker. It is inconceivable [, the court reasoned,] that the legislature, in enacting a statute specifically designed to benefit employees, intended to leave a certain class of employees who have suffered the most serious work-related injuries without any redress under the Act or at common law.”
Accordingly, Pennsylvania Supreme Court concluded that where an occupational disease first manifests more than 300 weeks after the last exposure to the disease, such a disease is not subject to the Pennsylvania Workers’ Compensation Act at all and the injured worker has the right to sue his or her employer in tort. “[W]e hold that the exclusivity provision of Section 303(a) does not preclude [Claimants] from seeking compensation for their injury via a common law action against Employers…”
The consequence of the court’s holding in Tooey is to permit claims in tort by employees against their employers for a latent occupational disease which manifests after the expiration of 300 week period following the end of employment or exposure. Whereas before Tooey the 300 week limitation was viewed as a statute of repose extinguishing the right to compensation or any other remedy at law, after Tooey the 300 week limitation is jurisdictional in nature. The disease in the Tooey case, manifesting as it did more than 300 weeks after exposure ceased, did not confer jurisdiction under the Pennsylvania Workers’ Compensation system but rather in the civil courts of the Commonwealth of Pennsylvania.
Generally, The Pennsylvania Workers’ Compensation Act applies to all injuries which occur within Pennsylvania no matter where the contract of hire was made, renewed, or extended. WCA Section 101, 77 P.S. §1. Also, McIlvaine Trucking, Inc. v. WCAB (States), 810 A.2d 1280 (Pa. 2002).
WCA Section 305.2, 77 P.S. §411.2, provides that where injuries occur outside of Pennsylvania jurisdiction exists nonetheless to file a claim under The Pennsylvania Workers’ Compensation Act in the following circumstances:1. The employment is principally localized in Pennsylvania; or
2. The employee is working under a contract of hire made in Pennsylvania in employment which is not principally localized in any state; or
3. The employee is working under a contract of hire made in Pennsylvania in employment principally localized in another state whose workers’ compensation law is not applicable to his or her employer; or
4. The employee is working under a contract of hire made in Pennsylvania for employment outside the United States and Canada.
It is unlawful for an employee to receive benefits under The Pennsylvania Workers’ Compensation Act at the same time the employee receives workers’ compensation benefits for the same injury under the laws of the Federal government or any other state, pursuant to WCA Section 322, 77 P.S. §677. This Section of the Act precludes only simultaneous receipt of benefits from Pennsylvania and another state for the same injury. The subsequent receipt of benefits in Pennsylvania is not precluded by this Section of the Act after benefits from the other jurisdiction have ceased. Merchant v. WCAB (TSL Ltd.), 715 A.2d 762 (Pa.Cmwlth. 2000). However, WCA Section 305.2(b) provides for a credit for benefits received in another state if the Claimant subsequently applies for and is awarded benefits in Pennsylvania.
Attempts to avoid Pennsylvania jurisdiction are unenforceable when the injury occurs in Pennsylvania. In McIlvaine Trucking Inc., Pennsylvania Supreme Court held that a written agreement conferring jurisdiction in another state is unenforceable if the injury occurs within Pennsylvania. But, written agreements to confer jurisdiction in a state other than Pennsylvania are approved by Pennsylvania courts in certain circumstances. Where a Claimant’s employment is also regularly in at least in one other state, the use of a written agreement to confer jurisdiction in that other state is permissible. Crell v. WCAB (Overland Express, Inc.), 643 A.2d 74 (Pa.Cmwlth. 1994). But an agreement that states merely that exclusive jurisdiction shall be in another state is unenforceable according to Pennsylvania Commonwealth Court in Owens v. WCAB (G.D. Leasing of Indiana), 769 A.2d 1220 (Pa.Cmwlth. 2001). To be enforceable, the Claimant must sign the agreement localizing employment in another state.
Employers should be cautioned that in seeking to confer jurisdiction in other states where they do business, choosing not to obtain insurance in Pennsylvania exposes them to the risk that any benefits due in Pennsylvania which exceed the benefits payable in the other state will be the responsibility of the employer. Robert M. Neff, Inc. v. WCAB (Burr), 624 A.2d 727 (Pa.Cmwlth. 1993).
5. WCA Section 305.2(d)(4), 77 P.S. 411.2(d)(4) provides a definition of “principally localized,” which states, “A person’s employment is principally localized in this or another state when (i) his employer has a place of business in this or such other state and he regularly works at or from such place of business, or (ii) having worked at or from such place of business, his duties have required him to go outside of the State not over one year, or (iii) if clauses (1) and (2) foregoing are not applicable, he is domiciled and spends a substantial part of his working time in the service of his employer in this or such other state.” Thus, for employment to be principally localized in a particular state, the employee must establish that the employer has a place of business in that state and that the employee regularly worked at or from that place of business. In Root v. WCAB (U.S. Plywood Corp.), 636 A.2d 1263 (Pa.Cmwlth. 1994), Commonwealth Court held that an employee working in New Jersey who had minimal contact with Pennsylvania by phone and mail but who did not regularly work at or from the employer’s Philadelphia location, was not principally localized in Pennsylvania. Thus, jurisdiction of the Act did not exist and the claim for injuries suffered in New Jersey could not be brought in Pennsylvania.
WCA Section 311, 77 P.S. §631 provides that employees must furnish notice of an injury to their employer within 120 days of the injury. In some circumstances, the time for giving notice does not begin until the employee knows, or by the exercise of reasonable diligence should know, of the existence of the injury and its possible relationship to employment. An employee’s suspicion, intuition, or belief that a medical condition is work-related is not sufficient to trigger the notice obligation absent a medical opinion that an illness or disease is related to employment. Bullen Cos. v. WCAB (Hausmann), 960 A.2d 488 (Pa. Cmwlth. 2008). This exception to the notice requirement, known as the “Discovery Rule,” serves to extend the time from which the notice period begins to run.
The discovery rule generally applies to occupational diseases, cardiac related diseases or problems, and a variety of other conditions including, for example, cumulative trauma injuries such as carpal tunnel syndrome. Thus, Pennsylvania courts have ruled that where an employee is exposed to ongoing cumulative or multiple trauma, the injury does not occur until the last exposure or trauma occurs, which is usually the last day of work. This may delay the commencement of the 120-day notice period. However, the date of diagnosis can also be, in certain circumstances, the date of injury for the beginning of the notice period even where the employee continues to work. In Brooks v. WCAB (Anchor Glass Container Corp.), 624 A.2d 821 (Pa. Cmwlth. 1993), the claimant was diagnosed with carpal tunnel syndrome and advised to undergo surgery. He declined to do so, and continued to work for more than three years until the pain became so severe that he finally stopped. At that point when he first gave notice of his injury to his employer, the claim was denied. Commonwealth Court upheld the denial, concluding that the date of injury was the date on which the employee was both diagnosed with carpal tunnel syndrome and advised to have surgery. The evidence in this case did not support a finding of continuing or ongoing aggravation.
An exception to the notice requirement exists if the employer has actual knowledge of the injury under WCA Section 311.
The specific details of the form and manner of notice and to whom notice must be given are set forth in WCA Sections 312 and 313, 77 P.S. §§632, 633. Notice to co-workers is not adequate. Notice to the insurance carrier is not required. The employee must prove that the employer actually received notice. Storer v. WCAB (ABB), 784 A.2d 829 (Pa. Cmwlth. 2001). Therefore, a claimant’s statement that a letter was mailed to provide notice is not sufficient to establish a presumption of receipt. The notice provided must refer to a medical condition caused by work. Where the first notice to an employer is with the filing of a claim petition, notice is deemed to be served to the employer on the date the documents are mailed by the Bureau. Hunter v. WCAB (Jack Greenburg Co.), 706 A.2d 403 (Pa. Cmwlth. 1998).
WCA Section 315, 77 P.S. §602, provides as follows: “In all cases of personal injury all claims for compensation shall be forever barred, unless, within three years after the injury, the parties shall have agreed upon the compensation payable under this article; or unless within three years after the injury, one of the parties shall have filed a petition as provided in [this Act]. In cases of death, all compensation shall be forever barred, unless within three years after the death, the parties shall have agreed upon the compensation under this article; or unless, within three years after the death, one of the parties shall have filed a petition as provided in [this Act].” Section 315 goes on to state, “Where, however, payments of compensation had been made in any case, said limitation shall not take effect until the expiration of three years from the time of the making of the most recent payment prior to date of filing such petition. . . .”,
This limitation is not an affirmative defense. Rather, it is jurisdictional in nature and can be raised for the first time on appeal. McDevitt v. WCAB (Ron Davidson Chevrolet), 525 A.2d 1252 (Pa. Cmwlth. 1987). Accordingly, the limitation of actions in Section 315 is a statute of repose upon the expiration of which, all right to file an original claim is extinguished as a matter of law. In Zimmerman v. WCAB (Pennsylvania Power and Light Co.), 597 A.2d 1272 (Pa. Cmwlth. 1991), Commonwealth Court held that date of disability, not the date of trauma, governs the commencement of the limitation. Zimmerman is contrary to the court’s holding in McDevitt.
The three year statute in Section 315 also applies to a claim for the payment of medical benefits. Vowinco v. WCAB (Horner), 656 A.2d 566 (Pa. Cmwlth. 1975); Bellefonte Area School District v. WCAB (Morgan), 627 A.2d 250 (Pa. Cmwlth. 1993), aff’d per curiam, 680 A.2d 823 (Pa. 1994).
There are special rules for death claims. Although the general 3-year limitation of Section 315 applies, there are other circumstances relevant to the time limitation. For example, the minority tolling statute has no application to workers’ compensation proceedings because they are not “civil actions” within the meaning of the statute. Therefore, a claim for death benefits filed by a decedent’s minor son 13 years after the work-related death was considered time barred under Section 315 of the Act in East v. WCAB (USX Corp.), 820 A.2d 1016 (Pa. 2003). In addition, WCA Section 301(c)(1), 77 P.S. §411(1) requires that death occur within 300 weeks after the injury
Thus, in Shoemaker v. WCAB (Genmar Corp.), 604 A.2d 1145 (Pa. Cmwlth. 1992), the survivors of an employee who contracted a disease as the result medical treatment for an injury and subsequently died as a result of the disease, were barred from filing a claim where the death did not occur within 300 weeks of the non-disease injury.
WCA Section 301(c)(2), 77 P.S. §411(2), provides that death from an occupational disease may be the basis for the payment of compensation only where the compensable disability occurred within 300 weeks of the last date of employment in an occupation or industry to which the employee was exposed to the hazards of the disease. City of McKeesport v. WCAB (Mietti), 746 A.2d 87 (Pa. 2000).
The three year period to file a claim petition under WCA Section 315, 77 P.S. § 602, begins when the employee knows as the result of a medical diagnosis that he or she is totally disabled as the result of a work-related disease. Price v. WCAB (Metallurgical Resources), 626 A.2d 114 (Pa. 1993). Certain diseases can be treated as injuries rather than diseases under Pennsylvania law (for example, where there is a pre-existing disease that is aggravated by work-place exposures, that aggravation is regarded as an injury and not a disease). In the case of such claims, the discovery rule does not apply.
In the case of death claims, the lack of knowledge that the employee’s death could be caused by an occupational disease does not extend the time in which to file a death claim. Thus, the discovery rule does not apply to such claims. WCAB (U.S. Steel Corp.) v. Chobanian, 339 A.2d 126 (Pa. Cmwlth. 1975).
If an employee receives benefits for an occupational disease at the time of death, a death claim can be filed even if the death occurs more than 300 weeks after the date of the injury. But, if the employee is receiving benefits due to an injury, death must occur within 300 weeks of the date of the injury or a death claim cannot be filed. Formicola v. WCAB (City of Philadelphia), 509A.2d 434 (Pa. Cmwlth. 1986).
WCA Section 315 provides that the limitation period shall not begin to run where compensation has been paid or payments have been made in lieu of compensation until three years after the last payment. Pennsylvania courts have considered on numerous occasion what sorts of payments are payments in lieu of compensation. These payments may include regular payments from general funds, as well as sick, accident, or relief funds to which the employer contributes as long as the payments are made without the employee performing work. The employee has the burden of proving that the payments were made as compensation in order for payments to toll the statute of limitations. NUS Corp. v. WCAB (Garrison), 547 A.2d 806 (Pa. Cmwlth. 1988).
Many specific examples exist in the case law. For example, in Schiavo v. WCAB (Westinghouse Electric Corp.), 737 A.2d 832 (Pa. Cmwlth. 1989), claimant was a management employee receiving benefits under a disability plan that provided for a reduction as a result of any workers’ compensation benefits recovered. Commonwealth Court held that such disability benefits constitute payments in lieu of compensation. In Bergmeister v. WCAB (PMA), 570 A.2d 572 (Pa. Cmwlth. 1990), Commonwealth Court ruled that payments made under a short-term disability plan must be identified as not being workers’ compensation in order to be considered payments in lieu of compensation.
The three year time limitation can also be extended by actions of an employer that intentionally or even unintentionally lulled the employee into a false sense of security.
The Pennsylvania Workers’ Compensation Act provides compensation for any health or medical problem occurring in the course of employment; as well as compensation for traumatic injuries, cumulative trauma injuries, occupational diseases, aggravations of pre-existing injuries, aggravations of pre-existing diseases, psychiatric or psychological claims including stress claims, and any type of health problem the imagination of a claimant’s lawyer and a claimant’s physician can relate to work.
The Pennsylvania Workers’ Compensation Act is perhaps unique in defining an “injury” compensable under the Act as an “injury.” Specifically, WCA Section 301(c)(1), 77 P.S. § 411(1) defines an injury as “an injury to an employee, regardless of his previous physical condition, arising in the course of his employment and related thereto…”. This includes aggravation, reactivation, acceleration, or death resulting from the injury. Pennsylvania courts have declined to define “injury” in more detail. Instead they have concentrated on the question of whether the “injury” is related to employment. In WCAB (Squillacioti) v. Bernard S. Pincus Co., 357 A.2d 707 (Pa. Cmwlth. 1976) aff’d, 388 A.2d 659 (Pa. 1978), Commonwealth Court declined “to delineate an ecumenical definition of ‘injury’.” The Supreme Court concluded further that no technical definition of injury is warranted.
While an accidental injury causing trauma or derangement to an employee’s body is obviously compensable, Pennsylvania provides compensation for many more esoteric types of injuries. It is not necessary to pinpoint a specific event or a definable incident as long as the injury arises in the course of employment and is related to employment. Thus, work-related disability may be shown to result from the cumulative effect of recurrent trauma caused by work duties. Roberts v. WCAB (Double R Enterprises), 719 A.2d 847 (Pa. Cmwlth. 1998) (foot condition); Williamette Industries v. WCAB (Lockett), 647 A.2d 665 (Pa. Cmwlth. 1994) (carpal tunnel syndrome). Pennsylvania courts have also approved compensation arising from such causes as a pulmonary disorder, arthritic knees, hemorrhoids, back problems, and epicondylitis.
Employees exposed to a serious risk of contracting a disease known to be highly contagious or infectious and possibly deadly have been “injured” for purposes of compensation under the Pennsylvania Act. Thus, in Jackson Township Volunteer Fire Company v. WCAB (Wallet), 594 A.2d 826 (Pa. Cmwlth. 1991), an ambulance worker exposed to Hepatitis B and AIDS attending victims of a crash was entitled to payment for a test to determine if the viruses were contracted. In Brendley v. Pennsylvania Department of Labor and Industry, 926 A.2d 1276 (Pa. Cmwlth. 2007), the court ruled that an employee exposed to hazardous material is entitled to payment of medical monitoring for the exposure even though he remained in good health and was asymptomatic.
Heart conditions including but not limited to heart attacks are compensable. Even transitory, non-specific conditions may be compensable under The Pennsylvania Workers’ Compensation Act. A stress related heart attack is considered to be a mental/physical case. Pre-existing heart diseases that are aggravated by exertion at work are also compensable if an actual heart attack occurs or other disabling symptoms occur as a result of the underlying disease. City of Wilkes-Barre v. WCAB (Pickett), 682 A.2d 1357 (Pa. Cmwlth. 1996). Angina brought on by physical and emotional stress is also an injury and compensable. Borough of Folcroft v. WCAB (Orsine), 647 A.2d 994 (Pa. Cmwlth. 1994). Hypertension is potentially compensable as well.
Psychological injuries are compensable under The Pennsylvania Workers’ Compensation Act. Three separate categories of such injuries are recognized:
1. Physical stimulus causing psychic injury (physical/mental injuries);
2. Psychological stimulus causing psychic injury (mental/mental injuries);
3. Psychological stimulus causing physical injury (mental/physical injuries);
A brief discussion of these three categories follows.
A post-injury or post traumatic psychological disability caused by a work related physical injury is compensable. A physical disability is not required. Rather, the Claimant need only show that a physical stimulus resulted in a mental disability, according to Commonwealth Court in Bartholetti v. WCAB (School District of Philadelphia), 927 A.2d 743 (Pa. Cmwlth. 2007).Mental/Mental –
Where the Claimant alleges a psychiatric disability due to an emotional/non-physical stimulus at work, there is a greater burden of proof, affirmed and endorsed by the Pennsylvania Supreme Court in Martin v. Ketchum, Inc., 516 A.2d 159 (Pa. 1990). The work related stress must be caused by actual objective abnormal working conditions as opposed to subjective or perceived and imagined events. Unequivocal medical evidence is required to establish that the resulting psychological/psychiatric disability is causally related to abnormal working conditions. Romanies v. WCAB (Borough of Leesport), 644 A.2d 1164 (Pa. 1994).
Alleged abnormal events must be considered in relation to the specific circumstances of a Claimant’s employment. Thus, when the employment is extremely stressful such as that experienced by police or fire fighters, the comparison is to other police or fire fighters. Washington v. WCAB (Commonwealth of Pennsylvania State Police), 11 A.3d 48 (Pa. Cmwlth. 2011). It is very difficult for individuals engaged in these types of occupations to establish the requisite abnormal working conditions when compared to others doing the same work, and the prospect of recovery of benefits in a mental/mental claim for such employees is difficult. The analysis of such claims must be based upon “content, intensity, duration and frequency of the offending behavior,” according to Pennsylvania Supreme Court in RAG (Cyprus Emerald Resources, L.P.) v. WCAB (Hopton), 912 A. 2d 1278 (Pa. 2007).
There are many cases in which courts have considered what working conditions are sufficiently “abnormal” to justify an award of benefits for a mental/mental claim. Examples include crude sexual comments by a supervisory employee causing severe emotional distress, which were the underlying facts in the RAG (Cyprus Emerald Resources) case. Others include religious and cultural harassment: Community Empowerment Association v. WCAB (Porch) 962 A.2d 1 (Pa. Cmwlth. 2008). Other abnormal working conditions include severe and constant verbal reprimands rising to the level of actual harassment, wrongfully accusing an employee of falsifying time records, and physically and verbally abusing employee who was terminated for a false reason. A dramatic change in working conditions designed to increase an employee’s workload or stress may result in a compensable mental/mental claim. An employee who was wrongfully accused of a crime by a supervisor successfully prosecuted a mental/mental claim.
Generally speaking, objective corroborating evidence to support on employee’s perception is necessary to prove the existence of abnormal working conditions. But the rule of corroboration does not apply when the alleged abnormal working condition is sexual harassment by a supervisor. These cases are highly fact specific and must be closely evaluated to determine their compensabilityMental/Physical –
Where psychological stress causes a “purely physical injury” proof of abnormal working conditions is not required. Panyko v. WCAB (US Airways), 888 A.2d 724 (Pa. 2005).
The Pennsylvania Workers’ Compensation Act was amended in 1972 to eliminate not only the “accidental injury” requirement but as part of the broadening and liberalization of compensability under the Act, WCA Section 108, 77 P.S. §27.1, was added to include occupational diseases as compensable injuries. Prior to the 1972 amendments, Pennsylvania employees who sustained work related occupational diseases were able to obtain compensation through a separate Occupational Disease Act (ODA). The ODA has never been repealed but it has been superseded since 1972 by the occupational disease provisions of The Workers’ Compensation Act. The principle differences between the old ODA and The Workers’ Compensation Act have to do with the amount of compensation payable. There are also burden of proof differences and other procedural matters, but the ODA has never been amended to increase the compensation payable and has fallen into disuse even though it has never been repealed.
WCA Section 301(c)(2), 77 P.S. §411(2) provides compensation for certain diseases enumerated in WCA Section 108. Once the presence of the disease is established under WCA Section 108, Claimants are entitled to a presumption that the disease arose out of and in the course of employment. WCA Section 301(e), 77 P.S. §413. The presumption is rebuttable. The employee must also separately prove the existence of disability as a result of the occupational disease.
Among the specifically enumerated diseases compensable under WCA Section 108 are poisoning by arsenic, lead, mercury, manganese or beryllium, poisoning by phosphorous, poisoning by methanol, carbon bisulfide, carbon monoxide, hydrocarbon distillates, poisoning by benzyl, caisson disease (compressed air), radium poisoning or disability, poisoning by or ulceration from chronic acid and related compounds, cancer or ulceration due to tar, pitch, bitumen or mineral oil or organic compounds, infection or inflammation of the skin due to oils, cutting compounds, lubricants, dust, liquids, fumes, gasses or vapor, anthrax, silicosis, asbestosis and related cancers, tuberculosis, hepatitis, Hepatitis C for specific occupations including volunteer fire fighters, volunteer ambulance personnel, volunteer rescue and lifesaving squad personnel, emergency services personnel and paramedics, Pennsylvania State Police officers or other police officers and other related occupations, diseases of the heart and lungs, byssinosis, coal workers pneumoconiosis or anthracosilicosis and silicosis.
Additionally, WCA Section 108(n) provides a catch-all section for diseases, though not enumerated, to which a Claimant is exposed by reason of employment, which are causally related to a Claimant’s industry or occupation, and the incidence of which is substantially greater in that industry or occupation than in the general population.
While some of the enumerated diseases or other diseases can also be compensated under WCA Section 301(c)(1), 77 P.S. § 411, which is the injury section, the burden of proof is greater as there is no presumption. Thus, where possible, a claimant alleging an occupational disease will proceed under Section 301(c)(2) in order to avail himself of the presumption that the disease is causally related to employment.
An injury is compensable under the Act only if it occurs within the course and scope of employment. WCA Section 301(c)(1), 77 P.S. § 411(1), sets forth the statutory requirements for course of employment. Commonwealth Court explained these requirements in WCAB (Slaugenhaupt) v. U.S. Steel Corp., 376 A.2d 271 (Pa. Cmwlth. 1977) :
Injuries may be sustained in the course of employment in two distinct situations: (1) where the employee, whether on or off the employer’s premises, is injured while actually engaged in the furtherance of the employer’s business or affairs, or (2) where the employee, although not actually engaged in the furtherance of the employer’s business or affairs (a) is on the premises occupied or under the control of the employer, or upon which the employer’s business or affairs are being carried on; (b) is required by the nature of his employment to be present on his employer’s premises; and (c) sustains injuries caused by the condition of the premises or by operation of the employer’s business or affairs thereon.
If the employee is not actually engaged in the furtherance of the employer’s business or affairs, all of the requirements specified in WCAB (Slaugenhaupt) v. U.S. Steel Corp must be met.
Violations of a positive work order remove an employee from the course and scope of employment.
If the injury occurs while an employee is furthering an employer’s business, and if the injury meets all other requirements of the Act, it will be compensable regardless of whether it occurred on or off the employer’s premises. Scher v. WCAB (City of Philadelphia), 740 A.2d 741 (Pa. Cmwlth. 1999).
An activity that does not further the employer’s affairs will take that employee out of the course of employment and serve as a basis for the WCJ to deny the claim.
For example, in Pennsylvania State University v. WCAB (Smith), 15 A.3d 949 (Pa.Cmwlth. 2011), Commonwealth Court held that Claimant did not sustain an injury arising in the course of his employment even though he was on the employer’s premises and walking to the lunch room where he fractured both ankles after jumping down a flight of twelve stairs. The court reasoned that Claimant’s action was “wholly foreign to his employment” with a “premeditated, deliberate, extreme and inherently high-risk” act “sufficient to remove (him) from the course and scope of his employment…”
Pennsylvania courts distinguish between employees with a “fixed place of employment” versus traveling employees, for whom a much greater latitude is afforded in considering whether an injury occurred within the course of employment.
If a traveling employee is injured after setting out on the employer’s business, it is presumed that the employee was in the course of his or her employment when the injury occurred. Andrews v. WCAB (C & C Compost), 701 A.2d 1003 (Pa. Cmwlth. 1997).
Commonwealth Court summarized the law relating to traveling employees in Lenzer Coach Lines v. WCAB (Nymick), 632 A.2d 947 (Pa. Cmwlth. 1993). In that case, the court found that an employee injured in a motel bathroom while on layover was within the course and scope of his employment because he was on call to assist the bus line’s passengers whenever called upon to do so. Moreover, the employee was engaged in an activity that was reasonable and incidental to his employment duties at the time
A distinct break in the employment duties must be established in order to find that a traveling employee was not acting within the course and scope of employment. Pfizer, Inc. v WCAB (Gresham), 568 A.2d 286 (Pa. Cmwlth. 1989). Stated simply, the course of employment is much broader for a traveling employee than for a stationary employee (“fixed place of employment”).
With a stationary employee an innocent departure may take the employee outside the course of employment. For example, an injury causing death was not compensable when the employee left for purposes of putting cans in a car with the intent of later selling those cans. Pesta v. WCAB (Wise Foods), 621 A.2d 1221 (Pa. Cmwlth. 1993).
Commuting to and from work is generally not in the course of employment. This is commonly known as the “coming and going rule.” The following are exceptions to this rule:
• The employee has no fixed place of work;
• The employment contract included transportation to and from work;
• The employee is on special assignment for the employer; or
• Special circumstances are such that the employee was furthering the business of the employer.
Peterson v. WCAB (PRN Nursing Agency), 597 A.2d 1116 (Pa. 1991).
: In summary, the course of employment for a stationary employee is narrower, while that of a traveling employee is broader.
To satisfy the employment contract exception to the coming and going rule, the employee must satisfy two elements: the employee must prove that a travel allowance is related to the actual expense and time involved in the employee’s commute, and that the employer provided or controlled the means of the commute. Leisure Line, Adventure Trails, Coach USA Co., v. WCAB (Walker), 986 A.2d 901 (Pa. Cmwlth. 2009).
If an employee regularly attends a work-related monthly meeting away from the normal site of employment, that employee may not be on a special mission while returning home from that meeting and may not be in the course of employment. Action, Inc. v. WCAB (Talerico), 540 A.2d 1377, (Pa. Cmwlth. 1988) aff’d per curiam 567 A.2d 1040 (Pa. 1990).
Unless the employer impliedly or expressly requests or directs the employee to perform services at home, injuries to that employee while on trips to and from home or while performing services at home are not within the course of employment. Crouse v. WCAB (Sperry Univac), 426 A.2d 749 (Pa. Cmwlth. 1981).
Even if the employee is not actually engaged in the furtherance of the employer’s business or affairs, an injury will be compensable where the employee (a) is on the premises occupied or under the employer’s control, or upon which the employer’s business or affairs are being carried on; (b) is required by the nature of his employment to be present on the employer’s premises; and (c) sustains injuries caused by the condition of the premises or by operation of the employer’s business or affairs thereon. WCAB (Slaugenhaupt) v. U.S. Steel Corp., 376 A.2d 271 (Pa. Cmwlth. 1977).
“Premises” does not equal “property”. Where the premises of injury are either owned, leased, or controlled by the employer, thereby connecting it so closely to the employer’s business so that it becomes a component or an integral part of that business, an injury occurring in that location may be compensable. Robinson v. YMCA, 257 A.2d 690 (Pa. Super. 1969).
Commonwealth Court has consistently stated that an injury must occur “in the course of” employment to be compensable. Pennsylvania Supreme Court has taken the same position. Halaski v. Hilton Hotel, 409 A.2d 367 (Pa. 1979).
This rule was significantly changed in a heart attack case in Krawchuk v. Philadelphia Electric Co., 439 A.2d 627 (Pa. 1981), where Pennsylvania Supreme Court held that the actual manifestations of the injury need not occur in the course of employment if the circumstances or factors causing the injury occurred in the course of employment.
In deciding Krawchuk, Supreme Court attached little significance to the following language of WCA Section 301(c)(1), 77 P.S. § 411(1) : “The term ‘injury arising in the course of his employment, as used in this article,’ . . . shall include all other injuries sustained while the employee is actually engaged in the furtherance of the business or affairs of the employer.”
Mindful of Krawchuk, all earlier Commonwealth Court opinions must be carefully examined for possible inconsistencies with Supreme Court’s reasoning in that case
But in Acme Mkts., Inc. v. WCAB (Purcell), 819 A.2d 143 (Pa. Cmwlth. 2003). Commonwealth Court agreed that the employee’s back symptoms (which occurred at home while putting together a file cabinet for his wife) had a relationship to the employee’s 20 years of performing heavy physical activity for the employer. Nevertheless, the disabling injury was not compensable because it did not occur while the employee was actively engaged in the furtherance of the employer’s business or affairs.
In cases where the connection between injury and the employment is medical and where medical testimony is necessary, the medical testimony must unequivocally establish the causal connection between the injury and the employment at the time the injury occurred. Weaver v. WCAB (Pennsylvania Power Co.), 487 A.2d 116 (Pa. Cmwlth. 1985).
On the other hand, medical testimony is not necessary to meet the “related thereto” requirement where the causal connection is obvious. Morgan v. Giant Mkts., Inc., 397 A.2d 415 (Pa. 1979). This reasoning applies only to the cause of injury. Disability must still be established by unequivocal medical evidence.
In cases where the relationship between the injury and the employment is not medical, the Commonwealth Court has required a showing that the employee would not have sustained the injury “but for” the employment. WCAB (Shremshock) v. Borough of Plum, 340 A.2d 637 (Pa. Cmwlth. 1975). The “but for” rule was also applied when an employee’s injuries arose from a motor vehicle accident that occurred while the employee was commuting to physical therapy treatments for a prior work-related injury. But for the employee’s prior injury, he would not have been in his car on the way to subsequent physical therapy treatments when the accident occurred. Berro v WCAB (Terminix Int’l, Inc.) 645 A.2d 342 (Pa. Cmwlth. 1994).
Intentionally self-inflicted injury or death is not compensable. The employer or the insurance carrier must prove that the death was a suicide. WCA Section 301(a), 77 P.S. § 431. This burden is met when the WCJ accepts a permissible inference of suicide as opposed to an equally permissible inference of an accident. Garcia v. WCAB (Bethlehem Steel Corp.), 469 A.2d 585 (Pa. 1983). By extension, the intentional refusal to follow medical advice as to the amount of medication prescribed and a resulting overdose leading to death can support a finding that the death was a suicide. Halvorsen v. WCAB (Congoleum Corp.), 632 A.2d 973 (Pa. Cmwlth. 1993).
However, in McCoy v. WCAB (McCoy Catering Srvs., Inc.), 518 A.2d 883 (Pa. Cmwlth. 1986), Commonwealth Court found that a suicide death was compensable when an employee proves all of the following in what is known as the “chain of causation test”:• It occurred after there was an initial work-related injury;
• Where that injury directly caused the employee such a severe mental disturbance that it overrode normal rational judgment; and
• Where that disturbance resulted in the suicide.
Pennsylvania Supreme Court adopted the chain of causation test in Glove Security Systems Co. v. WCAB (Guerrero), 544 A.2d 953 (Pa. 1988).
Where the injury that begins the chain of causation is emotionally related, it must be caused by actual objective employment events and not by mere subjective, perceived, or imagined events. Martin v. Ketchum, Inc., 568 A. 2d 159 (Pa. 1990).
Where an employee is receiving total disability benefits following an injury to his low back, but then voluntarily inflicts an injury to himself that places him in a vegetative state and prevents the possibility of his returning to the work force, benefits are suspended. Curtis v. WCAB (Berley Electric Co.), 730 A.2d 528 (Pa. Cmwlth. 1999).
WCA Section 301(a), 77 P.S. § 431, provides that, “where the injury or death…is caused by the employee’s violation of law including, but not limited to, the illegal use of drugs…no compensation shall be paid…The violation of law must be either a misdemeanor or a felony.” Burns v. WCAB (State Pipe Servs., Inc.), 654 A.2d 81 (Pa. Cmwlth. 1995). Te burden of proof is on the employer to establish that the illegal use of drugs caused the injury.
The payment of compensation is not barred where the violation is only a summary offense. Rox Coal co. v. WCAB (Snizaski), 807 A.2d 906 (Pa. 2002).
It may be possible to argue in cases where intoxication is only a summary offense or is not the cause of the employee’s injury or death that, although the employee may not be disqualified under the provision of WCA Section 301(a), 77 P.S. § 431, the employee may be disqualified under the “course of employment” provision of WCA Section301(c)(1), 77 P.S. § 411(1). The specific facts of each case must be closely scrutinized.
While the employer or the insurance carrier must prove a violation of the law, there is no requirement that a conviction occur prior to finding that a violation of law caused the accident. Ogden v. WCAB (Carolina Freight Carriers Corp.), 561 A.2d 837 (Pa. Cmwlth. 1989).
The employer or insurance carrier may use the intoxication defense even if there has not been a violation of the law. WCA Section 301(a), 77 P.S. § 431.
The cause of intoxication may not be limited to alcohol. For example, the Act excludes from coverage injuries that result from the illegal use of drugs or that would not have occurred but for the intoxication of the employee.
Expert testimony that the employee’s severe intoxication was a major and substantial contributing factor to the injury has been deemed legally sufficient to meet the “but for” standard of causation. Thomas Lindstrom Co. v. WCAB (Braun), 992 A.2d 961 (Pa. Cmwlth. 2010).
The employer has the burden of proving not only that the decedent used illegal drugs, but also that the drugs caused the decedent’s death in order to bar a compensation award. City of Philadelphia v. WCAB (Cronin), 706 A.2d 377 (Pa. Cmwlth. 1998).
No benefits are payable when the injury is caused by violation of a positive order, the employee knew of the positive order before the date of injury, and the order prohibited an activity not connected with the employee’s work duties. Camino v. WCAB (City Mission), 796 A.2d 412 (Pa. Cmwlth. 2002) (finding that the employee had violated a forbidden work area rule).
To preclude benefits, the employee must have been acting outside the realm of work activities. Rox Coal co. v. WCAB (Snizaski), 807 A.2d 906 (Pa. 2002) (finding that the employee’s death was not compensable, despite having permission to drive the company vehicle, where it was the employee’s own negligence which caused his death).
Note that the exclusion of benefits for violating a positive work rule is a limited exception that is very fact-specific.
Horseplay, when limited to joking behavior occurring within the assigned work area without the intent to inflict harm, is not a violation of a positive work rule. Sysco Food Servs. of Philadelphia v. WCAB (Sebastiano), 940 A.2d 1270 (Pa. Cmwlth. 2008).
If a third person injures an employee solely for personal reasons and not for reasons related to that employee’s employment, the injury will not be deemed to have occurred within the course of employment under WCA Section 301(c)(1), 77 P.S. §411(1). As personal animus is an affirmative defense, the employer has the burden of proof. Heath v. WCAB (Pennsylvania Bd. of Probation & Parole), 860 A.2d 25 (Pa. 2004) on remand, 867 A.2d 776 (Pa. Cmwlth. 2005).
.Similarly, the employer must establish that a sexual assault was for reasons personal to the assailant. Hershey v. Ninety-Five Assocs., 604 A.2d 1068 (Pa. Super. 1992)
WCA Section 301(a), 77 P.S. §431, further provides that no compensation shall be paid if the injury or death solely occurs as a result of military activities, whether from the United States, a foreign power, or as a result of sabotage
An employee who retires voluntarily from the work place and is not forced into a compulsory retirement because of a disabling occupational injury or disease, is not entitled to benefits for disability which occurs after retirement. Republic Steel Corporation v. WCAB (Petrisek), 640 A.2d 1266 (Pa. 1994). But an employee has not voluntarily retired and withdrawn from the labor market if the retirement is caused by the work injury. Schmidt v. WCAB (Fetch), 594 A.2d 812 (Pa.Cmwlth. 1991). If an employee testifies unequivocally that he has retired and has no intention of seeking further employment, the employer is relieved of the burden of proving availability of suitable employment in order to obtain a suspension of benefits. Vitelli v. WCAB (St. Johnsbury Trucking Company), 630 A.2d 923 (Pa.Cmwlth. 1993).
An employee seeking the continuation of disability benefits after retirement must show that he is seeking employment after retirement or that he was forced into retirement because of the work related injury. SEPTA v. WCAB (Henderson), 669 A.2d 911 (Pa. 1995). To overcome a petition to suspend benefits, the employee must establish that he or she was forced to retire from all gainful employment and not just from the pre-injury job. Pries v. WCAB (Verizon Pennsylvania), 903 A.2d 136, (Pa.Cmwlth. 2006). To prove retirement, the employer must establish by the totality of all circumstances that the employee has voluntarily chosen not to return to the work force. City of Pittsburgh v. WCAB (Leonard), 18 A.3d 361 (Pa.Cmwlth. 2011). An employee collecting Social Security old age retirement benefits and a union pension is presumed to have voluntarily removed himself permanently from the work force and must establish that he has made good faith efforts to find subsequent work, or that his work-related injury made him incapable of working at any job in the entire relevant labor market. Duferco Farrell Corp. v. WCAB (Zuhosky), 989 A.2d 63 (Pa.Cmwlth.2010). An employee who planned to retire before the work injury occured is nevertheless entitled to continue receiving weekly compensation benefits where the employee also demonstrates that he or she had no intention of permanently retiring from the entire labor market after retirement from the job with the time-of-injury employer. Bryn Mawr Hospital v. WCAB (O’Connor), 701 A.2d 805 (Pa.Cmwlth. 1997).
The Pennsylvania Workers’ Compensation Act provides a series of different methods to calculate an Average Weekly Wage (AWW). The AWW is calculated as of the date of injury, not the date of disability. In an occupational disease case, the date of injury is the date of last exposure for purposes of calculating benefits. Alpine Group v. WCAB (DePellegrini), 858 A.2d. 673 (Pa.Cmwlth. 2004).
The various calculation methods in the Pennsylvania Act found at WCA Section 309, 77 P.S. §582, are based on whether the claimant is a salaried employee (paid by the week, the month, or annually), or an hourly employee. If the claimant is an hourly employee, then the Act provides a series of alternate methods based upon the duration of employment
The Average Weekly Wage, once calculated, never changes for a specific date of injury. Similarly, the compensation rate for total disability, which is based upon the AWW, never changes. There is no cost of living increase. The Act provides for payment of compensation at the lower wage scales at a rate equal to 90% of the AWW, with most wage ranges payable for total disability at a rate equal to 662/3% of the AWW with a maximum weekly benefit rate. Although there is no cost of living adjustment, the Pennsylvania Department of Labor and Industry annually publishes a new compensation rate schedule which invariably increases the maximum rate
In a specific loss case (amputation or loss of use), the AWW is calculated as of the date of the traumatic occurrence rather than the date the injury becomes a specific loss. Roadway Express, Inc. v. WCAB (Siekierka) 708 A.2d 132 (Pa.Cmwlth. 1998). But where there is a progressive diminution in the use of an affected body part that was not originally amputated, which results in an amputation years after the original injury, this constitutes a separate compensable specific loss injury and the employee is entitled to specific loss benefits based upon the wage on the date of the amputation.
The Pennsylvania Workers’ Compensation Act was amended in 1966 to eliminate prior calculation methods which provided a series of alternate calculations that did not depend upon length of employment. In a series of cases since then, Pennsylvania Supreme Court has stated that the general principle of the 1996 amendments was an attempt to ensure that the calculation of wages would be a more accurate and realistic measure of what the employee could have expected to earn had the employee not been injured, in order to ensure that the employee is not overcompensation and the employee not overburdened. Colpetzer v. WCAB (Standard Steel), 870 A.2d 875 (Pa. 2005).
A bonus is considered wages under Section 309 for purpose of computing the AWW, to be pro-rated over the entire year rather than credited in the quarter paid. Lane Enterprises, Inc. v. WCAB (Patton), 644 A.2d 726 (Pa. 1994).
Profit-sharing payments may constitute wages for purposes of calculating the AWW in certain scenarios. Similarly, exercised stock options may constitute wages. Overtime must be included in determining the pre-injury average weekly wage. Vacation pay must be attributed to the entire year and pro-rated on an annual basis in determining the AWW and cannot be allocated entirely in the quarter in which it was paid. Unemployment benefits are not included in the calculation of the AWW. However, supplemental unemployment benefits (SUB) paid pursuant to a collective bargaining agreement as a result of services performed, are included in the calculation of the AWW. Bucceri v. WCAB (Freightcar America Corp.), 31 A.3d 95 (Pa. Cmwlth. 2011). Mileage reimbursement, fringe benefits, and wage increases after the date of injury are not included in the calculation of AWW.
Total disability is provided for in WCA Section 306 (a), 77 P.S.§511. Pennsylvania is a “wage loss state,” meaning that compensation benefits are payable generally so long as there is a wage loss attributable to the injury. An employee is entitled to be paid wage loss benefits at the total disability rate when the employee is either totally impaired from performing any and all occupations or is unable to perform the job held at the time of injury.
An employee is entitled to be paid wage loss benefits at the total disability rate when the employee is either totally impaired from performing any and all occupations or is unable to perform the job held at the time of injury. When an employee proves an inability to do the same type of work as at the time of injury, the employer has the burden to prove other work is reasonably available that the employee is physically and vocationally capable of performing; otherwise, the employee is entitled to compensation at the total disability rate. Compensation will not be paid for any period in which the employee is receiving wages equal to or greater than the employee’s prior earnings.
No compensation is paid during the first 7 days after disability begins. But if disability lasts 14 days or more, compensation is paid for the first 7 days. However, compensation for total disability, though characterized as “temporary total disability,” is potentially unlimited in duration. The Act provides various means to alter the disability status from total to partial disability but it is always the employer’s burden of proof to effect that change of status. Otherwise, the claimant remains totally disabled and entitled to continue receiving benefits at the TTD rate.
Partial disability is provided for in WCA Section 306(b), 77 P.S.§512. Any disability less than total is partial disability. The claimant can continue to receive partial disability for a period of up to 500 weeks.a). Impairment Rating
A major conceptual change in the Pennsylvania Workers' Compensation Act was adopted in June 1996, with the Act 57 amendments. These amendments included a procedure to alter a claimant's status from total disability to partial disability based upon an Impairment Rating alone, whereas historically since its adoption in 1915 as a wage-loss based system, a Pennsylvania claimant's benefits could only be modified to partial disability by proof of an available job the claimant could perform despite the injury.The Act 57 amendments added to the Pennsylvania Workers' Compensation Act Section 306 (a.2), 77 P.S. §511.2, which provided that after an employee has received 104 weeks of total disability benefits, the employer may require the employee to submit to an impairment rating evaluation to determine the "degree of impairment" as measured by "the most recent edition" of the AMA Guides to the Evaluation of Permanent Impairment. WCA Section 306(a.2) provided that unless the parties agreed upon an impairment rating examining physician from a list of physicians certified by the Bureau of Workers' Compensation, the employer must file a form with the Bureau of Workers' Compensation called "Request For Designation of Impairment Rating Physician." The Bureau would then assign a physician at random from a list of physicians licensed in Pennsylvania which it has certified as qualified to conduct such evaluations. The statutory plan then required the employer to make the appointment, provide all relevant medical records, and to ensure the claimant's attendance. WCA Section 306 (a.2) further provided that if the employee's "percentage of permanent impairment of the whole body resulting from the compensable injury" is less than 50% as determined by the IRE physician, the benefit status can be converted from total disability to partial disability, with the 500-week limitation as prescribed in WCA Section 306(b).
The Act, as amended, provided that in certain situations, the benefit status could be changed automatically: thus, if the IRE request was filed by the employer within 60 days of the claimant's receipt of 104 weeks of total disability benefits and the result was an impairment rating of less than 50%, the employer was entitled to file a Notice of Change of Disability Status form. This resulted in an automatic change in status to partial disability and began the 500-week limitation period. But if the employer's request for IRE was submitted after the 60-day period following the Claimant's receipt of 104 weeks of total disability benefits and the impairment rating was less than 50%, the employer was required to file a petition to modify benefits and offer expert testimony for a ruling by a WCJ. Gardner v. WCAB (Genesis Health Ventures) and Wal-Mart Stores, Inc. v. WCAB (Rider), 588 A.2d 758 (Pa. 2005). Importantly, under either scenario, the change of status based upon an impairment rating of less than 50% did not change the claimant's compensation rate, merely the benefit status, from total disability to partial disability.
b). Impairment Rating Procedure Ruled UnconstitutionalHowever, almost twenty-one years to the day after the Act 57 amendments became effective, Pennsylvania Supreme Court ruled that the statutory plan described above violates the Pennsylvania Constitution. In Protz v. WCAB (Derry Area School District, A.3d, (Pa. 2017), the court concluded that the language of WCA Section 306(a.2) requiring that the impairment rating examination must be conducted under the "most recent edition" of the AMA Guides is an unconstitutional delegation of legislative authority to a private, non-governmental agency, in this case, the American Medical Association.
The court observed that at the time the Pennsylvania Workers' Compensation Act was amended by adding WCA Section 306(a.2), the 4th Edition of the Guides was in effect. Over the years, the AMA subsequently promulgated a 5th Edition as well as a 6th Edition. Supreme Court noted that Article II, Section 1 of the Pennsylvania Constitution states that "[t]he legislative power of this Commonwealth shall be invested in a General Assembly which shall consist of a Senate and a House of Representatives." A "natural corollary" to this clause of the Pennsylvania Constitution is the "tenet that the General Assembly cannot delegate 'to any single branch of government or to any other body or authority' the power to make law," the court reasoned.
The court further reasoned that "[b]y any objective measure, the authority delegated to the AMA in Section 306(a.2) of the Workers' Compensation Act" is so broad and unbridled that it violates the non-delegation clause of the Pennsylvania Constitution. Supreme Court noted that, "The General Assembly did not favor any particular policies relative to the Guides' methodology for grading impairments, nor did it prescribe any standard to guide and restrain the AMA's discretion to create such a methodology. Without any parameters cabining its authority, the AMA would be free to: (1) concoct a formula that yields impairment ratings that were so inflated that virtually every claimant would be deemed to be at least 50% impaired; or (2) draft a version of the Guides guaranteed to yield impairment ratings so miniscule that almost no one who undergoes an IRE clears the 50% threshold; or (3) do anything in between those two extremes. The AMA could add new chapters to the Guides, or it could remove existing ones. It could even create distinct criteria to be applied only to claimants of a particular race, gender, or nationality." While Supreme Court commented that it has no reason to believe or suspect that the AMA would exercise its authority in such an arbitrary or unreasonable manner, the potential that it could do so, or that it could revise the Guides whenever it wants, as frequently or infrequently as it chooses, has the effect of giving "the AMA de facto, unfettered control over a formula that ultimately will determine whether a claimant's partialdisability benefits will cease after 500 weeks."For these reasons and others elaborated in its Opinion, Supreme Court concluded that "Section 306 (a.2) is unconstitutional in its entirety," and essentially struck it from the WC Act. The effect of the court's Opinion in Protz, has yet to be fully ascertained.
At a minimum, Protz requires that any pending requests for the appointment of an IRE physician or any pending petition to modify disability benefits to partial status based upon an IRE physician's opinion that a Claimant is less than 50% impaired, must be withdrawn. In fact, within days of the court's Opinion in Protz, the Bureau of Workers' Compensation posted a notice on its website that it would no longer appoint IRE physicians upon the request of employers.
In a subsequent case decided by commonwealth Court, Whitfield v. WCAB (Tenet Health System Hahnemann), 188 A.3d 599 (Pa. Cmwlth. 2018) the court addressed the retroactivity issues arising from Protz. In Whitfield, the Claimant was injured in 2002 and began receiving TTD benefits thereafter. In 2006, the Claimant underwent to an IRE pursuant to the 5th Edition of the AMA Guides, which resulted in a determination of a 44% impairment as a result of a WCJ issued an Order modifying the Claimant’s disability status from total to partial disability as the date of the IRE in connection with the Defendant’s modification petition. In the litigation of the Defendant’s modification petition, Claimant did not raise or preserve as an issue a dispute as to the constitutionality of the IRE process.
Claimant’s partial disability benefits expired by operation of law n July 2015. Several months later, Claimant filed a Petition to Reinstate total disability benefits. Her Petition was denied by a WCJ who determined that she had waived the right to challenge the constitutionality of the IRE by failing to do so during the initial litigation to change her status. Commonwealth Court reversed, concluding as a threshold matter that Claimant may file a petition to Reinstate within three years of the last payment of compensation pursuant to section 413(a) of the Act. WCA 413(a), 77 P.S 771-773. Commonwealth Court concluded that a Claimant seeking to reinstate benefits after an unconstitutional IRE is not obliged to show a change in earning power because the employer was not required to show a change in earning power when the Claimant’s status was modified to partial from total. claimant meets the burden of proof merely by presenting testimony of benefits. Commonwealth Court expressly stated that it was not applying Protz retroactively to invalidate all prior IREs, although the Supreme Court purported to strike the entire IRE sections from the Act in Protz.
Left unanswered is whether the expired 500-week partial disability period precludes additional partial disability benefits in the future or if the prior period is void and no longer counts as partial disability. Under Protz, the expired 500-week partial disability period should be treated as total disability, allowing Claimant yet another 500-week partial disability period in the future. since Commonwealth Court asserts in Whitfield that does not apply Protz retroactively the question is unanswered.
c). New Impairment Rating Legislation – October 2018To overcome Supreme Court’s Decision in Protz, in October 2018 the Pennsylvania General Assembly enacted a revised Impairment Rating section. New Section 306(a.3) of the Act, WCA §306(a.3), 77 P.S. §511.3, is identical to former §306(a.2) in most respects, but there are significant changes that will be the subject of future litigation. First, because one of the problems perceived by Supreme Court in Protz was the changing nature of the AMA Guides, the General Assembly designated permanent use of the 6th Edition of the AMA Guides, Second Printing, as the basis for impairment rating evaluations. The 6th Edition, unlike the original 4th Edition in effect when Act 57 was adopted in 1996, includes a chapter on mental and behavioral disorders, addressing another of Supreme Court’s perceived problems with the original legislation
The threshold for change of status to partial disability has also been changed. In every instance where the original IRE statute required a fifty (50%) percent threshold for a change of status, the language in new Section 306(a.3) has been changed to reduce that threshold to thirty-five (35%) percent. Thus, new Section 306(a.3)(2), states, “[I]f [the] determination [of an Impairment Rating Evaluation] results in an impairment rating that meets a threshold impairment rating that is equal to or greater than thirty (35%) percent impairment . . . the employee shall be presumed to be totally disabled and shall continue to received total disability compensation benefits under Section 306(a).” Any impairment rating of less than thirty-five percent results in a change of status to partial disability.
The mechanism for requesting an Impairment Rating and the procedure for changing Claimant’s benefit status remains the same as in the prior Section 306(a.2). That is, if an IRE is requested within sixty days of the expiration of 104 weeks of temporary total disability, the change in status will relate back to the first day after 104 weeks, but the Claimant must be given 60 days notice of the change.
An even more important provision of the new law pertains to the question of retroactivity. The General Assembly provided that the new statute is effective immediately as of the date it was signed by the Governor on October 24, 2018. It was specifically given retroactive effect, counting all past weeks of both partial disability and total disability in the periods allowable under Section 306(a.3). Subsection (2) of the law specifically provides, “For the purposes of determining the total number of weeks of partial disability compensation payable under Section 306(a.3)(7) of the act, an insurer shall be given credit for weeks of partial disability compensation paid prior to the effective date of this paragraph.” Subsection (1) of Section 3 of the Act provides for the same effect of weeks of total disability paid prior to the effective date of the new law. It states, “For the purposes of determining whether an employee shall submit to a medical examination to determine the degree of impairment and whether the employee has received total disability compensation for the period of 104 weeks under Section 306(a.3)(1) of the act, an insurer shall be given credit for weeks of total disability compensation paid prior to the effective date of this paragraph.” In practice, this means, for example, that if a Claimant had been paid 103 weeks of temporary total disability benefits on October 24, 2018, the date the law was signed by the Governor, as of October 31, 2018, that employee would have been paid 104 weeks of temporary total disability, and the employer and insurer would be entitled that date to request an IRE.
There is little doubt that these retroactivity provisions will be challenged in the courts.
The words “vocational rehabilitation” do not appear in The Pennsylvania Workers’ Compensation Act. A claimant is never required to go through a vocational rehabilitation program and an employer and carrier are not entitled to compel the claimant to undergo such rehabilitation. What generally was called vocational rehabilitation was essentially eliminated in 1996 when The Pennsylvania Workers’ Compensation Act was amended. Prior to that point, what was known was “vocational rehabilitation” was actually a job search conducted by a vocational specialist seeking to match up claimant up with open and available jobs, a process that rarely succeeded but often led to settlement. The following discussion touches on the various methods of changing a claimant’s status to partial disability other than the IRE and thereby reducing the compensation rate at the same time as starting the 500-week maximum period for payment of partial disability benefits.
If an employee returns to work at wages less than the AWW, benefits are payable at a rate equal to 2/3 of the difference between AWW and the new wage, but not in excess of the maximum compensation payable for the year of injury. When benefits are thus modified, claimant remains entitled to receipt of partial disability benefits. United Cerebral Palsy v. WCAB (Emph), 673. A.2d 882 (Pa. 1996).
For injuries which occur on or after June 24, 1996, WCA Section 306(b)(2), 77 P.S. §512(2), added a new way to calculate “an earning power” in order to modify benefits. Section 306(b)(2) provides that, “Earning power shall be determined by the work the employee is capable of performing and shall be based upon expert opinion evidence which includes job listings with agencies of the department, private job placement agencies, and advertisements in the usual employment area. Disability partial in character exists if the employee is able to perform his or her previous work or can, considering the employee’s residual productive skill, education, age, and work experience, engage in any other kind of substantial gainful employment that exists in the usual employment area in which the employee lives within the Commonwealth of Pennsylvania. ”
In Phoenixville Hospital v. WCAB (Shoap), 81 A.3d 830 (Pa. 2013), Pennsylvania Supreme Court addressed both the substantive and procedural requirements of the earning power assessment prescribed by Section 306(b)(2). For context, before the Pennsylvania WC Act was amended in 1996 to provide for modification based upon an earning power assessment, the role of vocational experts was created by case law. The leading case was a 1987 Opinion of Pennsylvania Supreme Court, Kachinski v. WCAB (Vepco Construction Company), 532 A.2d 374 (Pa. 1987). In Kachinski, Supreme Court ruled that an employer seeking to modify a claimant’s benefits to partial disability “where the claimant has regained some functional abilities and is capable of returning to some measure of gainful employment,” is required to demonstrate the following:
1. The employer who seeks to modify a claimant’s benefits on the basis that he has recovered some or all of his ability must first produce medical evidence of a change in condition.
2. The employer must then produce evidence of a referral (or referrals) to a then open job (or jobs) which fits in the occupational category for which the claimant has been given medical clearance, e.g., light work, sedentary work, etc.
3. The claimant must then demonstrate that he has in good faith followed through on the job referral(s).
4 If the referral fails to result in a job, then claimant’s benefits should continue.
This procedure was thought to have been eliminated as a result of the 1996 amendments to the Act providing for a new definition of “earning power” as set forth above. In the Phoenixville Hospital case, Supreme Court considered whether an employer, relying upon a vocational expert’s earning power assessment under Section 306(b)(2), could succeed in modifying a claimant’s benefits where the claimant does not receive an actual offer of employment.
Supreme Court observed that the Pennsylvania legislature “did not explicitly abrogate Kachinski with its amendment of Section 306(b), nor did it state or explicitly suggest that Section 306(b) was to be interpreted in tandem with Kachinski.” In resolving the various disagreements arising under Section 306(b), the court observed first that “Section 306(b) does not require that the claimant be offered a job in order to establish the claimant’s earning power, except in the case where the employer has an appropriate opening.” Instead, earning power under Section 306(b) is established by proof of the claimant’s ability to engage in existing “substantial gainful employment” and “not on whether he or she actually receives a job offer.” Relying on the phrase “substantial gainful employment that exists,” the court ruled that to prove a claimant’s earning capacity the employer must present “evidence that potential employers are in search of an employee (as evidenced by, among other things, job listings, placement agencies, or advertisements) within the claimant’s physical, medical and vocational restrictions.” Earning power must be proven by jobs which are actually open and that the claimant is capable of filling, “not simply the existence of jobs that are already filled with individuals having the same physical, medical and vocational restrictions as the claimant.” Because there must be “proof of substantial gainful employment... based on the existence of meaningful opportunities for the claimant to obtain employment,” there must also be a mechanism “for providing the claimant with notice of the existence of these jobs, which thus provides a serious opportunity to secure employment.”
Thus, a vocational expert engaged in an earning power assessment must promptly and simultaneously with the identification of open jobs provide the claimant with written notice of the job openings in order for the claimant to have an opportunity to apply for the job. Furthermore, the court reasoned, “It would be directly relevant for a claimant to show that an employer rejected the claimant’s job application precisely because the work is incompatible with the claimant’s residual productive skills, education, age, or work experience.” The statutory concept of “substantial gainful employment which exists” would be meaningless, the court reasoned, “with respect to a claimant’s actual medical and vocational circumstances unless the jobs identified by the employer’s expert witness, which are used as the employer’s proof of earning power under Section 306(b), remain open until such time as the claimant is afforded a reasonable opportunity to apply for them.”
“Evidence that the claimant pursued but failed to obtain gainful employment with the employers identified by the expert witness is undeniably relevant to rebut the employer’s argument that the positions identified were proof of the potentiality of the claimant’s substantial gainful employment.” A claimant must be afforded the opportunity to show that he or she did not obtain employment because the position identified by the employer’s expert witness was already filled by the time the claimant had a reasonable opportunity to apply for it. “If the job is already filled, it does not ‘exist,’ to afford Section 306(b)’s language as commonly understood meaning.”
Therefore, a vocational expert retained under Section 306(b)(2) of the Act must identify, from sources enumerated in the Act itself, actual open jobs which a claimant has the opportunity to obtain, and prompt written notice of those job openings must be provided to the claimant. The claimant then has the burden of proving that he or she applied and was rejected, as well as the reason for the rejection. This differs from the pre-1996 amendment version of modification under Kachinski, because Kachinski required a job offer whereas now the claimant has the burden of proving why he did not obtain employment.
WCA Section 306(b)(3), 77 P.S. §512(3), requires that when an insurer receives medical evidence that the employee is able to return to work in any capacity, the insurer must provide prompt written notice on a form prescribed by the Department of Labor and Industry to the employee that states all of the following: the nature of the employee’s physical condition or change of condition; the employee has an obligation to look for available employment; proof of available employment opportunities may jeopardize the employees right to receive ongoing benefits; the employee has the right to consult with an attorney in order to obtain evidence to challenge the insurer’s contentions. This form is known as a “Notice of Ability to Return to Work.” Issuance of this Notice is a condition precedent to obtaining a modification or suspension of employee’s benefits. Summit Trailer Sales v. WCAB (Weikel), 795 A.2d 1082 (Pa. Cmwlth. 2002). What is or is not “prompt written notice” is evaluated on a case-by-case basis, but notice sent after a job offer is made is not sufficient and does not obligate the employee to even look for work. Secco, Inc. v. WCAB (Work), 886 A.2d 1160 (Pa. Cmwlth. 2005).
The Pennsylvania Workers’ Compensation Act does not require an employer to create a job in order to return an injured worker to employment. However, if the employer has a specific job open that the employee is capable of performing both physically and vocationally, the employer must offer the job to the employee or the employer may not avail itself of other remedies to reduce compensation based upon earning power. Eidem v. WCAB (Gnaden-Huetten Memorial Hospital), 746 A.2d 101 (Pa. 2000). Thus, an employer attempting to modify compensation benefits based upon an earning power assessment must establish that it does not have any open and available work that the claimant is capable of performing or it may not proceed with its modification petition.
An employer is not required to establish earning power outside of its own place of employment by means of an expert opinion from a vocational expert under WCA Section 306(b)(2) where actual jobs would have been offered to the employee had the employee not lost her job as well as a nursing license as a result of professional misconduct. Harvey v. WCAB (Monongahela Valley Hospital), 983 A.2d 1254 (Pa. Cmwlth. 2009), app. Denied, 995 A.2d 355 (Pa. 2010).
Different rules apply to injuries which occurred before June 24, 1996. In the case of such injuries, Pennsylvania Supreme Court’s opinion in Kachinski v. WCAB (Vepco Construction Company), 532 A.2d 374 (Pa. 1987) applies to job offers under Section 306(b)(2). Although Kachinski was the basis of significant, complicated and extensive litigation before The Pennsylvania Workers’ Compensation Act was amended n 1996, few cases remain subject to its strictures and requirements.
In order to accurately assess the earning power of an employee, the insurer may require the employee to submit to a vocational interview conducted by a vocational expert approved by the Department of Labor and Industry but selected by the insurer. The Bureau of Workers’ Compensation has enacted regulations prescribing the qualifications to be approved as a vocational expert for purposes of conducting earning power assessments. Although the expert must meet these qualifications, pre-approval of an expert by the Department of Labor and Industry is not required. Caso v. WCAB (School District of Philadelphia), 839 A.2d 219 (Pa. 2003).
The purpose of a vocational expert’s involvement in a case is to identify work generally available in the employee’s pre-injury economy or usual employment area which the employee is both physically and vocationally capable of performing. Rebeor v. WCAB (Eckard), 976 A.2d 655 (Pa. Cmwlth. 2009). If the employee no longer lives in the Commonwealth of Pennsylvania, then usual employment area where the injury occurred applies to the vocational expert’s survey. Riddle v. WCAB (Allegheny City Electric, Inc.), 981 A.2d 1288 (Pa. 2009).
WCA Section 306(c), 77 P.S. §513, provides that compensation may be paid for loss of use or amputation of specified members of the body, hearing impairment greater than 10%, loss of vision in one or both eyes, and disfigurement. Pennsylvania workers’ compensation practitioners refer to these injuries as “specific losses.” Compensation for a specific loss is paid without regard to loss of earning power and even if the employee loses no time from work whatsoever. Lente v. Lucci, 119 A. 132 (Pa. 1922). Thus, a specific loss is considered an exclusive remedy which precludes consideration of any disability that normally flows from such an injury. Matthies Coal Company v. WCAB (Henry), 538 A.2d 590 (Pa. Cmwlth. 1988).
The various enumerated body parts other than vision and hearing in Section 306(c) are compensated the same whether the loss is by amputation or loss of use. However, compensation for loss of use requires that the loss be permanent and that the loss be for all practical intents and purposes, although 100% uselessness is not required. U.S. Steel Corporation v. WCAB (Peacock), 454 A.2d 1180 (Pa. Cmwlth. 1983).
.The “all practical intents and purposes” test requires a loss more severe than an industrial loss, but not total uselessness. Wise v. WCAB (City of Philadelphia), 810 A.2d 750 (Pa. Cmwlth. 2002). Medical evidence is required to establish a permanent loss of use for all practical intents and purposes. The testimony of Claimant alone is not sufficient
Specific loss benefits survive even termination of employment for cause. Scott v. WCAB (Ames True Temper, Inc.), 957 A.2d 800 (Pa. Cmwlth. 2008).
Generally, benefits for a loss of use are paid at the total disability rate. The average weekly wage for a specific loss case is calculated as of the date of the traumatic occurrence if compensation is for loss of use rather than amputation. Walton v. Cooper Hosiery Co., 409 A.2d 518 (Pa.Cmwlth. 1980).
The Pennsylvania Workers Compensation Act provides a schedule of weeks for each loss of use depending upon which part of the body is lost or amputated. WCA Section 306(c)(1)-(24), 77 P.S. §513. If there is more than one specific loss, the number of weeks compensated for each is cumulative. WCA Section 306(c)(21), 77 P.S. §513(21).
Compensation for loss of use is followed by a healing period under The Workers’ Compensation Act, which also varies depending upon the nature and extent of the loss. However, healing periods are not cumulative and only one, the longest applicable, is payable. WCA Section 306(c)(25), 77 P.S. §513(25).
Total disability benefits and specific los benefits for the same injury cannot be paid concurrently. Rather, benefits for a specific loss, whether by amputation or loss of use, are payable at the end of a period of total disability.
This occurs where a specific loss results in disability that is separate and distinct from that which normally follows the injury. In such a situation, benefits for total disability are allowed in addition to benefits for specific loss, but cannot be paid concurrently. Richardson v. WCAB (American Surfpak), 703 A.2d 1069 (Pa. Cmwlth. 1997).
However, an employee who sustains a specific loss and is partially disabled from injuries separate and apart from the specific loss sustained in the same accident, may receive payment for both concurrently as long as the combined amount does not exceed the maximum compensation payable for the year of injury. Sharon Steel Corporation v. WCAB (Frantz), 790 A.2d 1084 (Pa. 2002).
WCA Section 306(c)(23), 77 P.S. §513(23), provides that where an employee loses both hands, both arms, both feet, both legs, or both eyes, there is a presumption of total disability and such benefits, calculated under Section 306(a) of the Act,77 P.S. §511, are to be paid unless the Workers’ Compensation Appeal Board determines otherwise. In such a situation, the Board has the discretion to determine that an employee is totally disabled even if the employee has returned to work and is receiving wages.
There is no Second Injury Fund in Pennsylvania. But there is a “Subsequent Injury Fund,” which is rarely invoked. Where an employee suffers a second specific loss of a certain type after having suffered a similar loss previously, even if the first loss was non-work-related, and is totally disabled as a result, compensation for total disability is paid by the Commonwealth of Pennsylvania during the time of total disability following the expiration of specific loss payments for the second injury. WCA Section 306.1, 77 P.S. §516.
Following is the schedule for Loss of Use/Amputation injuries at WCA Section 306(c), 77 P.S. Section 513:
Section of Act
|Nature of Injury||Benefit Period||Healing Period|
|306(c)(1), 77 P.S. § 513(1)||Hand||335 weeks||20 weeks|
|306(c)(2), 77 P.S. § 513(2)||Forearm||370 weeks||20 weeks|
|306(c)(3), 77 P.S. § 513(3)||Arm||410 weeks||20 weeks|
|306(c)(4), 77 P.S. § 513(4)||Foot||250 weeks||25 weeks|
|306(c)(5), 77 P.S. § 513(5)||Lower leg||350 weeks||25 weeks|
|306(c)(6), 77 P.S. § 513(6)||Leg||410 weeks||25 weeks|
|306(c)(9), 77 P.S. § 513(9)||Thumb||100 weeks||10 weeks|
|306(c)(10), 77 P.S. § 513(10)||First finger||50 weeks||6 weeks|
|306(c)(11), 77 P.S. § 513(11)||Second finger||40 weeks||6 weeks|
|306(c)(12), 77 P.S. § 513(12)||Third finger||30 weeks||6 weeks|
|306(c)(13), 77 P.S. § 513(13)||Fourth finger||28 weeks||6 weeks|
|306(c)(17), 77 P.S. § 513(17)||Great toe||40 weeks||12 weeks|
|306(c)(18), 77 P.S. § 513(18)||Other toes||16 weeks||6 weeks|
Disfigurement of the head, face or neck, if serious, permanent, and unsightly, and not usually incident to the employment, is a specific loss and compensated for a period of not to exceed 275 weeks as determined by the agreement of the parties or at the discretion of a workers’ compensation judge. This is the only specific loss section which provides discretion to a workers’ compensation judge to award the number of weeks of compensation. WCA Section 306(c)(22), 77 P.S. §513(22). There is no healing period for disfigurement or scarring
WCA Section 306(c)(7), 77 P.S. §513(7), provides that loss of use of an eye is determined on the basis of the employee’s eyesight without the use of corrective lenses, which includes both glasses and contact lenses. Addy Asphalt Company v. WCAB (Sebastianelli), 591 A.2d 11 (Pa. Cmwlth. 1991). Where the eye has been injured, but not destroyed, the test to determine whether compensation should be awarded for specific loss is whether the eye was lost for all intents and purposes. Loss of all practical intents and purposes will be found where the injured eye does not contribute materially to the employee’s vision in conjunction with the uninjured eye Rohan & Haas v WCAB (Frederick), 414 A.2d 163 (Pa. Cmwlth 1980). The loss of an eye is not permanent if surgery will restore some or all of the eye’s function. Joyce Western Corp. v. WCAB (Fichtorn), 542 A.2d 990 (Pa. 1988).
Hearing loss is compensable under WCA Section 306(c)(8), 77 P.S. §513(8). The Act uses the AMA Guides to the Evaluation of Permanent Impairment to establish the percentage of complete loss benefit weeks to which an employee may be entitled as a specific loss. The maximum number of weeks for complete loss of hearing in one ear is 60; for both ears 260.
Under the premise that long-term exposure to hazardous occupational noise will affect both ears, the percentage of impairment in hearing is calculated according to the binaural formula. Hearing loss due to causes other than long-term exposure, such as acoustic trauma or head injury, is measured as a loss in one or both ears. WCA Section 306(c)(8)(ii), 77 P.S. §513(8)(ii). The binaural formula must be used where loss in only one ear is caused by long-term exposure to hazardous occupational noise.
If impairment is calculated at a percentage equal to or less than 10%, no benefits are payable. If the percentage is equal to or more than 75%, there is a presumption that the impairment is total and complete. The employee bears the burden of proving that the hearing loss was caused by the employment.
WCA Section 435, 77 P.S. §991, provides for monetary penalties. The penalty may not exceed 10% of the amount awarded, but it may be increased for unreasonable delay. The maximum penalty amount that can be awarded or an unreasonable or excessive delay is 50%. Interest, payable pursuant to WCA Section 406.1, 77 P.S. §717.1, constitutes a portion of the total amount upon which penalties can be assessed. Becerra v. WCAB (Leaseway Systems), 586 A.2d 485 (Pa. Cmwlth. 1991).
The imposition of penalties and the amount of penalties is discretionary. In order to assess penalties, there must be a specific finding by the WCJ as to whether there was a violation of the Act. However, such a finding does not mandate the imposition of a penalty. In seeking a penalty, it is the employee’s burden to produce evidence of a violation of the Act. The Act does not require that an employee suffer economic harm before penalties are imposed; instead, it permits the imposition of penalties to give the WCJ the power to assure compliance with the Act. Thus, a WCJ’s refusal to award penalties for a technical violation of the Act does not constitute an abusive of discretion. Ostrawski v. WCAB (UPMC Braddock Hospital), 969 A.2d 15 (Pa. Cmwlth. 2009).
The Department of Labor and Industry, the Workers’ Compensation Appeal Board, and any court that may hear any proceeding arising out of The Workers’ Compensation Act, has the power to impose penalties for the violation of the Act, the Rules and Regulations. Frompovicz v. WCAB (Palsgrove), 642 A.2d 638 (Pa. Cmwlth. 1994). Due process requires that notice and a hearing must be provided to any party on the issue whether penalties are to be imposed. Edmond v. WCAB (Devon Apparel, Inc.), 402 A.2d 715 (Pa. Cmwlth. 1979).
WCA Section 406.1, 77 P.S. §717.1, provides for the accrual of 10% interest on all due and unpaid compensation for the date each installment is due. For wage loss benefits, interest accrues on the 22nd day after the employer has notice or knowledge of the employee’s disability. For medical expenses, interest is allowed on medical expenses from the date the claim is presented.
If the employee is successful in whole or in part in a litigated claim, reasonable costs must be awarded for witnesses, necessary medical examination, and the value of unreimbursed lost time to attend proceedings. The successful employer / insurer is not entitled to an award of litigation costs.
The customary fee for an employee’s attorney is 20% of the benefits.
Where the employee succeeds in a litigated case, WCA Section 440, 77 P.S. §996, mandates reasonable counsel fees be awarded against he employer as a cost in addition to compensation unless the employer meets its burden of establishing facts sufficient to prove a reasonable basis for the contest. The WCJ must award counsel fees unless the employer establishes a reasonable contest, even if the employee has not requested that counsel fees be assessed against the employer. The reasonableness of an employer’s contest depends upon whether the contest was prompted to resolve a genuinely disputed issue or merely to harass the employee.
When counsel fees are requested, employee’s counsel normally submits a quantum meruit application.
Where death results from an injury or occupational disease under the Act, weekly compensation benefits and burial expenses are provided. The Act caps reimbursement of funeral / burial expenses at $3,000.00.
WCA Section 307, 77 P.S. §561, identifies dependents entitled to weekly benefits and generally includes widow, widower, and children under the age of eighteen. The class of dependents is determined as of the date of death
Any otherwise lawful common-law marriage entered into prior to January 1, 2005, is valid and the term widow / widower includes common-law spouses. Statutory law provides that no common-law marriage contracted after January 1, 2005, will be valid. 23 Pa.C.S. §1103. But the statute is not retroactive.
A widow / widower who is not living with the decedent at the time of death must actually be dependent and receiving a substantial portion of her support from him. The substantial support testifies equally to either spouse when assessing there is proof of dependency for entitlement to compensation. White v. WCAB (Good Shepherd Rehabilitation Hospital), 666 A.2d 1129 (Pa. Cmwlth. 1985).
Children under the Act include all natural living and posthumous children, whether legitimate or illegitimate. Other described children must be members of the decedent’s household at the time of death or the decedent must intend to function as a parent and assume the day-to-day responsibilities of a parent. Illegitimate children can qualify for benefits even though they are neither members of the decedent’s household nor supported by the decedent.
A parent or sibling of a decedent can be considered a dependent under certain circumstances.
The amount of benefits is determined by the Act on the date of the injury. WCA Section 307, 77 P.S. §561, provides various percentages of the pre-injury average weekly wage of the decedent payable to the various classes.
A widow is entitled to benefits for life unless she remarries, in which case she is entitled to “dower” of 104 weeks as a lump sum. Benefits are payable to eligible children and siblings until age eighteen unless they are dependent because of disability, in which case compensation will continue during the child’s disability. If and while a child is a full-time student in an accredited educational institution, compensation is payable until age twenty-three.
WCA Section 306(f.1), 77 P.S. §531, provides for the payment of medical benefits. Medical benefits are payable even when there is no loss of earnings or no compensable disability. There is no waiting period for medical benefits.
When a claim is accepted, the employer or insurer must make payment of medical expenses within thirty days of the receipt of bills and records from the health-care provider, unless the employer disputes the reasonableness or necessity of the treatment and submits the bills in question for utilization review (UR). The UR Process is prescribed at WCA Section 306(f.1)(5), 77 P.S. §531(5).
Medical bills are paid pursuant to the cost containment regulations. A medical provider is not permitted to hold the employee liable for medical expenses incurred for treatment of a work-related injury nor may the provider bill or attempt to recover from the employee the difference between the provider’s charge and the amount paid by the employer under the cost containment regulations.
The employer may deny payment of medical expenses without the filing of a petition if the medical expenses are for treatment not causally related to the work injury. However, an employer that unilaterally stops paying an employee’s medical bills based solely on causation assumes the risk of exposure to possible penalty liability contingent upon a WCJ’s ruling concerning the causal relationship to the medical expenses.
Travel expenses incurred by the employee to obtain medical treatment that is or can be provided locally will not be reimbursable. The employer is required to pay long distance travel costs for medical treatment in accordance wit the Internal Revenue Code Standard for Mileage Rate.
The employer’s voluntary payment of the employee’s medical bills is not an admission of liability.
Requests for payment of medical bills must be made either on Form CMS-1500 or the UB92 form. Until a provider submits bills on one of the specified forms, insurers are not required to pay for the treatment billed. WCA Section 306(f.1)(2), 77 P.S. §531(2) requires providers to file periodic medical reports with the employer of the injured employee on the prescribed Bureau form (LIBC-9) and relieves employers from payment of a provider’s treatment until this report is filed. Until the provider submits the bills and required medical reports on the prescribed forms, the employer is not obligated to pay for the treatment. All payments of bills submitted with the appropriate records must be paid in thirty days unless disputed on causal relationship grounds or through utilization review.
A Claimant who refuses reasonable medical or healthcare services forfeits all right to compensation for any injury or any increase in incapacity shown to have resulted from the refusal. The procedure for asserting this right is the filing by the Employer of a petition to suspend benefits. WCA Section 306(f.1)(8), 77 P.S. §531(8). In a previous version of this section of the Act, forfeiture was to be regarded as a suspension of benefits. Once the reason for the suspension no longer exists, benefits can be reinstated. Stuart Painting Company v. WCAB (Asvestas), 611 A.2d 787 (Pa. Cmwlth. 1992). Thus, a Claimant whose benefits have been suspended (“forfeited”) suffers that suspension only during the pendency of the refusal.
The burden of proof is upon an employer seeking a forfeiture of benefits to prove that the employee refused medical or health services which are reasonable. However, an employee’s inability to submit to medical treatment for reasons beyond the employee’s control does not constitute a refusal of treatment to justify a forfeiture of benefits. Furthermore, forfeiture is not appropriate unless there is unequivocal evidence that the employer authorized the treatment at issue. Mackintosh-Hemphill v. WCAB (Banicki), 541 A2d 1176 (Pa.Cmwlth.1980). Accordingly, the recommended practice upon receipt of evidence that an employee has refused treatment which would be beneficial in helping to improve or restore some measure of earning power is for the employer or its insurance carrier to specifically offer in writing to provide and pay for the treatment in question.
Any refusal of reasonable medical care that will result in decreasing disability or restoring some measure of earning power is a basis for ordering a forfeiture of benefits. Muse v. WCAB (Western Electric Company), 522 A.2d 533 (Pa. 1987). The “Muse test” has been applied in many situations. There is no type of treatment which is theoretically unavailable as a basis to seek suspension or forfeiture of benefits, including surgery. Pennsylvania courts have developed a risk/benefit analysis pertaining to the offered treatment. If the evidence establishes that the recommended treatment involves minimal risk to the patient and offers a high probability of success, even proposed surgery is reasonable. In Joyce Western Corp. v. WCAB (Fichtorn), 542 A.2d 990 (Pa. 1980), this test was applied to defeat a claim for loss of use benefits resulting from an eye injury where there was surgery available to restore or improve the injured workers’ eye sight (lens implant).
Thus, in determining whether recommended treatment is reasonable, Pennsylvania courts consider (1) whether it is highly probable that the treatment will cure the problem, or (2) whether it is highly probable that the medical treatment will enhance the employee’s prospect for gainful employment. Kneas v. WCAB (Cross Country Clothes), 685 A.2d 248 (Pa.Cmwlth. 1996). If the expert testimony does not detail the degree of success and the potential risk of proposed treatment, it does not provide a sufficient basis upon which to suspend benefits.
Even if the recommended medical treatment will only partially reduce claimant’s disability, the employer is still entitled to a suspension of benefits. An employer is not required to demonstrate the availability of work within the employee’s predicted limitations following the medical treatment. Bereznicki v. WCAB (Eat ’N Park Hospitality Group), 989 A.2d 46 (Pa.Cmwlth. 2009). Many different cases have been published in recent years addressing particular types of treatment and the particular facts and circumstances pertaining to an employee’s refusal of such treatment. Each case must be analyzed closely on it own facts.
“Where an employe has received payments for the disability or medical expense resulting from an injury in the course of his employment paid by the employer or an insurance company on the basis that the injury and disability were not compensable under this Act, in the event of an agreement or award for that injury, the employer or insurance company who made the payments shall be subrogated out of the agreement or award so paid, if the right to subrogation is agreed to by the parties or is established at the time of hearing before the [Workers’ compensation judge] or the Board.” WCA Section 319, 77 P.S. §671.
Group health insurance carriers are covered under this clause of Section 319. Subrogation under Section 319 is not absolute or self-executing and must be asserted with diligence at the time of hearings before the workers’ compensation judge. Independence Blue Cross v. WCAB (Frankford Hospital), 820 A.2d 868 (Pa.Cmwlth. 2003). By the same token, a request for credit must be presented by the employer to the WCJ during the initial proceedings or it will be considered waived. Toy v. WCAB (Alltel Pa., Inc.), 651 A.2d 701 (Pa.Cmwlth. 1994).
Section 319 only refers to payments by the employer or by an insurance carrier and does not provide for subrogation rights relating to payments from a union fund. WCAB (Burgerhoff) v. Branch Motor Express, 334 A.2d 847 (Pa.Cmwlth. 1975). A police and fire medical association does not qualify as an insurer and is not entitled to subrogation rights under Section 319. Holgate v. WCAB (City of Philadelphia), 521 A.2d 82, (Pa. Cmwlth. 1987).
In Whitmoyer v. WCAB (Mountain Country Meats), 186 A.3d 947 (Pa. 2018), Pennsylvania Supreme Court addressed future credit issues resulting from the second scenario contemplated by Section 319 of the Act: the distribution of net settlement proceeds, namely what is left of the recovery after the employer has been reimbursed for ‘compensation paid.’” Under Section 319, the “excess” amount must be “paid forthwith” to the claimant and treated as “an advance payment by the employer” and not as “compensation” but rather “on account of future installments of compensation.” WCA Section 319, 77 P.S. 671. Practice prior to Whitmoyer allowed Employers to apply the credit to both future indemnity benefits and medical bills, based on language in WCA Section 319 providing that the excess balance of recovery “shall be treated as an advance payment on account of any future installments of compensation.” WCA Section 319, 77 P.S. 671.
In Whitmoyer, Supreme Court concluded that the benefit plan in the Pennsylvania Workers Compensation Act provides only that weekly wage loss benefits shall be paid as “installments” so that the future credit provided by Section 319 pertains only to be future weekly wage loss benefits and not future medical benefits paid on account of the work injury.
Supreme Court held as follows: “Viewing installments of compensation’ in context, with reference to surrounding language and the overall statutory scheme, we conclude that the term is clear and unambiguous. It does not refer to medical expenses. Therefore, having satisfied its accrued subrogation lien at the time of settlement, an employer is not permitted to seek reimbursement for future medical benefits paid on account of the work injury.
Supreme Court held as follows: “Viewing installments of compensation’ in context, with reference surrounding language and the overall stator scheme, we conclude that the term is clear and unambiguous. It does not refer to medical expenses. Therefore, having satisfied its accrued subrogation lien at the time of settlement, and employer is not permitted to seek reimbursement for future medical expenses from the employee’s balance of recovery.”
Where the employer or insurance carrier to be reimbursed under Section 319 receives a benefit as the result of the injured workers’ successful litigation of a workers’ compensation case, the employee’s counsel is entitled to a pro-rata fee from the subrogated party out of the fund. Donegal School District v. WCAB (Haggerty), 798 A.2d 856 (Pa.Cmwlth. 2002).
The receipt of benefits under the Pennsylvania Motor Vehicle Financial Responsibility Law, 75 P.S. §1701, et seq. does not affect the right to receive workers’ compensation benefits.
The health insurance carrier’s subrogation right is limited to the amount the carrier can actually prove it paid on behalf of the employee. But the health insurer is subrogated to the full amount of the medical expenses it actually paid. Associated Hospital Services of Philadelphia v. Pustilnik, 439 A.2d 1149 (Pa. 1981). The cost-containment provisions of WCA Section 306(f.1)(3), 77 P.S. §531(3), do not apply and do not thereby limit the workers’ compensation defendant’s liability to the health insurer.
WCA Section 204(a), 77 P.S. §71, provides, “That if the employe receives unemployment compensation benefits such amount or amounts so received shall be credited as against [payments for total or partial disability, but not payments for loss of use/amputation, or death benefits]” Fifty per centum of the benefits commonly characterized as “old age benefits under the Social Security Act . . . shall also be credited [to the same extent]: Provided, however, That the Social Security offset shall not apply if old age Social Security benefits were received prior to the compensable injury. The severance benefits paid by the employer directly liable for the payment of compensation and the benefits from the pension plan to the extent funded by the employer directly liable for the payment of compensation which are received by the employe shall also be credited [against total or partial disability benefits]. The employe shall provide the insurer with proper authorization to secure the amount which the employe is receiving under the Social Security Act.”
If the employee and the employer each contributed toward the premiums for a sickness and accident benefit plan, the employer is entitled only to a pro rata credit of the benefits paid under the plan against the workers’ compensation payments due. School District of Philadelphia v. WCAB (March), 531 A.2d 547 (Pa.Cmwlth. 1987).
Section 204(a) does not apply to credit for death and disability insurance or a monthly disability pension received by an employee pursuant to a collective bargaining agreement because such payments constitute an accrued benefit rather than payments in relieve of an inability to work. Doborkey v. WCAB (H.J. Heinz), 655 A.2d 636 (Pa.Cmwlth. 1995). Commonwealth Court has ruled that short-term disability benefits paid to an injured employee may be set off against workers compensation benefits. Marsh v. WCAB (Prudential Insurance Company), 673 A.2d 33 (Pa.Cmwlth. 1996).
In January 2012, the Pennsylvania Supreme Court recognized the Pennsylvania Bar Associate Workers’ Compensation Law Section as a certifying organization in the area of Workers’ Compensation Law.
Certification as a “specialist” in the practice of workers’ compensation law requires the attorney to have achieved a passing score on an exam consisting of multiple choice and essay questions. The exam is administered annually. The initial certification period is 5 years.
In order to qualify to sit for and take the specialty certification examination, an attorney must establish by documentation:• that the attorney is admitted to practice in Pennsylvania,
• that the attorney has been actively engaged in the practice for a minimum of five years, and,
• that the attorney devotes a minimum of 50 percent of his / her practice to the specialty field of workers’ compensation.
The attorney must also submit a variety of documents showing active practice in the workers’ compensation law field and participation in mandatory Continuing Legal Education in workers’ compensation law.
For more information, please visit the Pennsylvania Bar Association’s website using the following link: http://www.pabar.org/
Claims professionals are not required to be licensed in Pennsylvania in order to manage and adjust workers’ compensation claims. There is no licensing or continuing education requirement.
The Pennsylvania Bureau of Workers’ Compensation is part of the Pennsylvania Department of Labor and Industry. The Bureau is led by a Director of the Bureau of Workers’ Compensation. Within the Bureau of Workers’ Compensation are two offices in which workers’ compensation cases are adjudicated and appealed.
The Office of Adjudication is headed by a Director of Adjudication. The Director is appointed by and serves at the pleasure of the Secretary of Labor and Industry. The Director is responsible for assigning a workers’ compensation judge to every matter that involves litigation.
Workers’ Compensation Judges (WCJ) are appointed by the Secretary of Labor and Industry. Pennsylvania WCJ’s are required to devote their full energy to their official duties and are not permitted to perform any work inconsistent with their duties. The Office of Adjudication assigns matters to WCJ’s for determination or adjudication under The Pennsylvania Workers’ Compensation Act (or the Occupational Disease Law, although it has fallen into complete disuse). WCJ’s are required to hold hearings and issue decisions relating to petitions.
The minimum requirements for appointment to the position of a Workers’ Compensation Judge include that an applicant must be an attorney in good standing before the Pennsylvania Supreme Court, with five years of workers’ compensation practice before administrative agencies or equivalent experience. Additionally, a course of training and instruction which includes instruction in medicine and law, followed by the successful completion of an examination, is required prior to assuming duties. A WCJ is required to complete 20 hours of continuing professional development courses annually.
These qualifications and requirements were instituted in 1996 when The Pennsylvania Workers’ Compensation Act underwent substantial revision and amendment. Prior to that date, workers’ compensation judges were known as “referees” and it was not necessary to be an attorney in order to be a referee. Non-attorney referees were “grandfathered” into the position of WCJ when the Act was amended in 1996, and there are several workers’ compensation judges still active in Pennsylvania who are not attorneys.
WCA Section 1404, 77 P.S. §2504, constitutes a Code of Ethics for WCJs. This is an extensive Code covering a full spectrum of activity including such matters as impartiality, avoidance/appearance of impropriety, ex parte communications in contested matters, conflicts, financial activity, and solicitation of funds for organizations. The Code also provides for disciplinary measures. It mandates the duty of WCJs to uphold the integrity and independence of the workers’ compensation system.
Proceedings before a WCJ are covered by the Special Rules of Administrative Practice and Procedure before Workers’ Compensation Judges, found at 34 Pa. Code Section 131.1, et seq. The Special Rules prescribe hearing procedures, time frames within which cases are to be litigated, and other matters pertaining to the procedure before WCJs
The Pennsylvania Workers’ Compensation Act provides for alternative dispute resolution. There is a “mandatory mediation” requirement. WCA Section 401, 77 P.S. §701, requires that the adjudicating WCJ must schedule a mediation prior to the deadline for submission of proposed findings of fact and conclusions of law, or legal briefs or memoranda, unless upon good cause in the WCJ’s sole discretion, mediation would be “futile.” A mediation conference is conducted by a WCJ other than the adjudicating WCJ.
There is also a voluntary mediation process. Special Rule of Administrative Practice and Procedure 131.59a allows the parties to request voluntary mediation with the adjudicating judge or any judge upon whose assistance they agree. The Rules specify that a mediation is not limited to achieving a compromise settlement, but may have as its goal narrowing of the issues by stipulation or any other amicable resolution.
All matters to be adjudicated by a WCJ in Pennsylvania are initiated by petition. All petitions and answers are required to be on forms prescribed by the Bureau of Workers’ Compensation. WCA Sections 402 and 416, 77 P.S. §§711 and 721.
The injured worker is known as a “claimant” in Pennsylvania workers’ compensation. In the event of the death of the injured worker, the “claimant” will be the dependent or dependents claiming entitlement to compensation under WCA Section 307, 77 P.S. §§561, 562.
The employer is the defendant. If insured, the employer’s insurance carrier is automatically named as a party defendant and all proceedings are against both the employer and the carrier. WCA Section 401, 77 P.S. §701. The Act requires that the carrier must assume the liability of the employer and is entitled to all of the employer’s immunities and protections. WCA Section 305, 77 P.S. §501.
In the case of Utilization Review proceedings which are not resolved at the initial level of review and are litigated by petition before a WCJ, the healthcare provider has standing to file his or her own petition. This is the only instance in which a person other than the claimant or the employer/carrier may be a party to an adjudicated workers’ compensation case in Pennsylvania. WCA Section 306(f.1)(6)(iv), 77 P.S. §531(6)(iv).
The Special Rules of Administrative Practice and Procedure also provide for very limited discovery. Generally speaking, discovery in Pennsylvania workers’ compensation is limited to the discovery of records pursuant to a records deposition procedure which is prescribed in the Special Rules. See, Pa. Code Section 131.68.
For the most part, fact witness such as the claimant, any corroborating witnesses, the defendant employer, and rebuttal witnesses testify live at hearings before workers’ compensation judges. Expert witnesses, such as physicians, generally testify by deposition and the transcripts of those depositions are admitted into evidence at subsequent hearings.
The Act provides that WCJs have broad authority to subpoena witnesses and records, and to investigate on their own motion the facts set forth in any petition, or the facts pertinent to any injury under the Act. This investigation can be conducted either before, during, or after any hearing. WCA Sections 418, 420, 436, 437; 77 P.S. §§833, 831, 992, 993. The investigatory power of a workers’ compensation judge was upheld by Pennsylvania Commonwealth Court where documents supporting a subrogation claim were submitted only at the insistence of the WCJ and after the record was closed. Risus v. WCAB (Pennsylvania State University), 922 A.2d 72 (Pa. Cmwlth. 2007).
WCJs have the power to issue subpoenas for the personal appearances of witnesses or for the production of records. However, WCJs have no enforcement authority and if the recipient of a subpoena disregards the obligation to comply, enforcement only exists in the county courts, which, in Pennsylvania, are called Courts of Common Pleas.
WCA Section 422(a), 77 P.S. §834, requires that a WCJ shall file a “reasoned decision, containing findings of fact and conclusions of law based upon the evidence as a whole which clearly and concisely states and explains the rationale for the decision so that all can determine why and how a particular result was reached. The adjudicator shall specify the evidence upon which the adjudicator relies in conformity with this Section. The adjudication shall provide the basis for meaningful appellate review.”
What constitutes a “reasoned decision” has been the subject of much appellate litigation in Pennsylvania over the years. With regard to the resolution of conflicting evidence and fact-finding, precisely what a WCJ is required to do depends upon how the witness is presented. If the witness testified live before a WCJ, a “demeanor-based assessment” can be made requiring no explanation by the WCJ, and any simple statement as to whether to not the witness is credible is sufficient for a “reasoned decision.” If the witness testified by deposition, however, the WCJ must state an “actual objective basis” for credibility determinations. Michel v. WCAB (U.S. Steel Corporation), 966 A.2d 643 (Pa. Cmwlth. 2009
The reasoned decision requirement of WCA Section 422(a) requires simply that the WCJ must state some objective reason in order to facilitate appellate review. It is important to note that in Pennsylvania the law does not require a WCJ’s decision to be “well-reasoned,” although it must be free from abusive discretion and material legal error. Green v. WCB (US Airways), 28 A.3d 936 (Pa. Cmwlth. 2011).
The broad discretion of WCJs in Pennsylvania to enter findings of fact, combined with the limited scope of appellate review, is noteworthy. It has long been the law in Pennsylvania that a WCJ is the sole finder of fact, and is free to accept or reject the testimony of any witness in whole or in part. A party is not permitted to challenge or second guess the WCJ’s reasons for credibility determinations. Unless arbitrary or capricious, a WCJ’s credibility determinations will be upheld on appeal. Hershgordan v. WCAB (Pepboys), 14 A.3d 922 (Pa. Cmwlth. 2011).
Pennsylvania appellate courts give great deference to the decision-making process and fact-finding of WCJs. Where a WCJ’s decision is sufficient for effective judicial review, such as one which includes a summary of the testimony, and there was a showing that the grounds relied upon by medical experts and witnesses found credible were identified, the judge’s decision was “reasoned” pursuant to WCA Section 422(a), and was affirmed. Bullen Cos. v. WCAB (Hausmann), 960 A.2d 488 (Pa. Cmwlth. 2008). But where a WCJ failed to reference or give any reason for rejecting relevant, uncontroverted, competent evidence, effective appellate review was precluded and a remand was required. Rosenberg v. WCAB (Pike County), 942 A.2d 245 (Pa. Cmwlth. 2008). A WCJ’s credibility determinations will be overturned, according to Commonwealth Court, “only if it is arbitrary and capricious and so fundamentally dependent upon a misapprehension of material facts, or so otherwise flawed, as to render it irrational.” Casne v. WCAB (STAT Couriers, Inc.), 962 A.2d 14 (Pa. Cmwlth. 2008). If a WCJ’s decision is determined to be not a “reasoned decision,” it will be remanded for further findings of fact.
WCA Section 402, 77 P.S. §711, states, “All proceedings before a Workers’ Compensation Judge . . . shall be instituted by claim petition or other petition as the case may be or on the Department’s own motion, and all appeals to the board shall be instituted by appeal addressed to the board. All claim petitions, requests for informal conferences and any other petitions and appeals shall be in writing and in the form prescribed by the Department.”
WCA Section 401, 77 P.S. §701, defines the term “board” as the “Workers’ Compensation Appeal Board, a departmental administrative board . . . exercising its powers and performing its duties as an appellate body independently of the Secretary of Labor and Industry and any other official of the Department.” Thus, the Board is primarily an appellate body reviewing WCJ decisions on legal issues. Gregory v. WCAB (Narvon Builders), 926 A.2d 564 (Pa. Cmwlth. 2007). However, the Board has original jurisdiction in certain specified areas.
Proceedings before the WCAB are governed by the Special Rules of Administrative Practice and Procedure before the Workers’ Compensation Appeal Board, Special Rules of Administrative Practice and Procedure before the Workers’ Compensation Appeal Board, 34 Pa. Code §111.1, et seq.
Board rules require that the grounds for appeal must be set forth with specificity. General allegations that do not specifically bring to the attention of the Board the issues on appeal are not sufficient. The only other pleading permissible before the Board is a motion to quash, which must be filed within 20 days of service of the appeal or a cross-appeal.
On appeal, a party may request a supersedeas, an interlocutory order relieving the requesting party from the obligation to comply with the workers’ compensation judge’s decision and order.An appeal may be taken on the following bases:
1) the WCJ’s order is not in conformity with the terms of the Act;
2) the WCJ committed an error of law;
3) the findings of fact of the WCJ are not supported by sufficient competent evidence;
4) the findings of fact of the WCJ are the product of fraud, coercion, or other improper conduct of any party in interest;
5) the findings of fact and conclusions of law do not clearly and concisely state and explain the rationale for the decision so as to provide the basis for meaningful appellate review. (that is, the decision is not a “reasoned decision”).
The Board will hear the appeal on the record certified from the WCJ and must affirm unless it finds that the adjudication is not in compliance with WCA Section 422(a), 77 P.S. §834 , or some other provision of the Act. Conclusions of law are fully reviewable on appeal. WCA Section 424, 77 P.S. §855. The Board may disregard findings of fact only if there is not “competent, substantial” evidence to sustain the judge’s necessary findings of fact, or if the judge’s findings of fact are insufficient or the judge failed to make a finding of fact on a crucial issue necessary for a proper application of a law.
The WCAB has broad discretionary power to order a remand in the interest of justice. Cudo v. Hallstead Foundary, Inc. 539 A.2d 792 (Pa. 1989). WCA Section 419, 77 P.S. §852 provides that the Board may remand to a WCJ to take additional evidence if the WCJ’s findings are not supported by substantial evidence or where the WCJ failed to make findings on a critical issue for proper application of the law. The Board may go so far as to assign a case to a new WCJ on remand under WCA Section 419. When a matter is remanded to a WCJ, the judge must confine the proceedings solely to the issues presented on remand by the Board. Riley v. WCAB (DPW/Norristown State Hospital), 997 A.2d 382 (Pa. Cmwlth. 2010). Where the remand directs the WCJ to explain the rationale for credibility determinations, the WCJ is not precluded from reversing the original decision according to Reineart v. WCAB (Stroh Companies), 816 A.2d 403 (Pa. Cmwlth. 2003).
In certain limited matters, the Board has original jurisdiction. Some matters as to which the Board had original jurisdiction were superseded or deleted as a result of the 1996 amendments to The Workers’ Compensation Act, commonly known as Act 57. However, the Board has original jurisdiction over a Petition for Appointment of a Guardian Under Section 307 of the Act, WCA Section 307, 77 P.S. §542. The Board has original jurisdiction for a Petition Under Section 317, WCA Section 317, 77 P.S. §603, which is a petition relating to trustee payments.
WCA Section 425, 77 P.S. §856, provides that the Board may grant a rehearing de novo before the Board itself, or remand the case for rehearing before a judge, where it appears that the judge’s award that disallows the compensation was capricious or caused by fraud, coercion, or other improper conduct by any party in interest.
WCA Section 426, 77 P.S. §871, 771 provides that the Board, upon petition of any party and upon cause shown, may grant a hearing when the Board has made a previous award that disallows the compensation or any other order or ruling where the Board has sustained or reversed an action of the WCJ. A petition for rehearing must be presented not more than 18 months after the Board has taken final action. So long as the petition for rehearing is filed within the 18 month period, the Board has jurisdiction to act even if it does not do so within the time limit set in WCA Section 426, of 18 months. Rice v. WCAB (Rockwell International Corporation/Spring Division), 580 A.2d 1011 (Pa. Cmwlth. 1991).
If a matter has been appealed to Commonwealth Court, and a final order entered by the court, the Board is divested of jurisdiction and cannot grant a rehearing even within the 18-month period. If a rehearing is granted during the pendency of judicial review, the Board is required to notify the reviewing court of its order granting rehearing. The grant or denial of a rehearing is generally within the discretion of the Board. The Board will be reversed on appeal to Commonwealth Court only for abuse of discretion. Payne v. WCAB (Elwyn, Inc.), 928 A.2d 377 (Pa. Cmwlth. 207).
Pennsylvania Commonwealth Court is the tribunal which hears administrative and statutory appeals. Any party may appeal a final order of the Board to Commonwealth Court pursuant to Section 702 of the Administrative Agency Law,2 Pa. C.S. §702. Commonwealth Court reviews Board decisions, not WCJ decisions. A quirk in the Act, however, permits an appeal from a determination of a hearing officer on a fee review dispute to be filed directly with Commonwealth Court and to by-pass the Board. WCA Section 306(f.1)(5), 77 P.S. §531(5). The form of appeal is called a Petition for Review. The appeal process is governed by the Pennsylvania Rules of Appellate Procedure.
Commonwealth Court’s scope of review is similar to that of the Board. Findings of Fact will be affirmed if there is substantial, competent evidence in the record which supports them even if the court would have found the facts otherwise. Conclusions of law are fully reviewable on appeal. Thus, Section 706 of the Administrative Agency Law, provides that an “appellate court may affirm, modify, vacate, set aside, or reverse any order brought before it for review, and may remand the matter and direct the entry of such appropriate order or require such further proceedings to be had as may be just under the circumstances.” Further, the scope of review is defined in Section 704 of the Administrative Agency Law,2 Pa. C.S. §702 as follows:
The court shall affirm the adjudication unless it shall find that the adjudication is in violation of the constitutional rights of the appellant, or is not in accordance with law, or that the provisions of subchapter ASA of Chapter 5 (relating to practice and procedure of Commonwealth agencies) have been violated in the proceedings before the agency, or that any finding of fact made by the agency and necessary to support its adjudication is not support by substantial evidence.
The standard of review on questions of law is de novo and plenary. Pitt Ohio Express v. WCAB (Wolff), 912 A.2d 206 (Pa. 2006). Whether the record contains competent evidence to support the award is an issue of law fully reviewable based upon the entire record. Substantial evidence for purposes of appeal to Commonwealth Court, is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Gibbs v. WCAB (Armco Stainless & Alloy Products), 861 A.2d 938 (Pa. 2004). The court is not permitted to re-weigh the testimony and determine the facts even if it would have reached a contrary decision. Supervalu, Inc. v. WCAB (Bowser), 755 A.2d 715 (Pa. Cmwlth. 2000). The court may not reject the WCJ’s credibility determination on appeal. The court’s review is limited to determining whether the findings of fact are supported by substantial evidence.
The Pennsylvania Supreme Court hears appeals as a matter of discretion. Any party aggrieved by an award of Commonwealth Court may file a Petition for Allowance of Appeal.
The Workers’ Compensation Act requires mediation to be scheduled no later than 30 days prior to he date set for filing of legal briefs, unless, upon good cause shown, the WCJ determines that mediation would be “futile.” Normally, mandatory mediation is scheduled following the first hearing held in the case. WCA Section 401, 77 P.S. §701.
The Special Rules of Administrative Practice and Procedure before Workers’ Compensation Judges provide that mandatory mediation will not be assigned to the adjudicating judge. All parties must either attend mandatory mediation in person or be available by telephone. Parties participating in the mediation must have the authority to accept, modify, or reject settlement proposals.
This process is similar to mandatory mediation, except that if the parties both consent, the adjudicating WCJ can mediate his or her own case. There are both advantages and disadvantages to the adjudicating mediating the case, especially if the case does not settle and goes to decision.
Voluntary mediation may also be requested by the parties when they prefer to mediate with a different non-adjudicating WCJ over the WCJ who was selected for mandatory mediation. For a voluntary mediation to occur, both parties must consent to the selection of the mediating WCJ.
For claims that are not in litigation, the parties can file a form with the Bureau requesting an informal settlement conference. The parties can request a specific WCJ to conduct the settlement conference.
Attorney representation at the informal conference is limited, with representation of the employer being permitted only when the employee has counsel.
Scope of Settlement.
WCA Section 449, 77 P.S. §1000.5, authorizes the parties to settle by compromise and release agreement any and all liability which is claimed to exist under the Act on account of injury or death. Prior to the enactment of Section 449, parties were not permitted to settle a workers’ compensation claim.
A standard form provided by the Bureau entitled “Compromise and Release Agreement by Stipulation Pursuant to Section 449 of The Workers’ Compensation Act” (LIBC-755) must be used for settlement of Workers’ Compensation cases.
A Compromise and Release Agreement can be used to settle the indemnity portion of the claim only, the medical portion of the claim only, or both indemnity and medical portions of the claim.
A Compromise and Release Agreement must be presented to a WCJ at a hearing for approval. The claimant is required to testify at this hearing. The WCJ cannot approve the settlement unless (1) the WCJ determines that the claimant understands the full legal significance of the agreement; (2) the agreement must be explicit with regard to the payment, if any, or reasonable, necessary, and related medical expenses; and (3) no compromise and release may be considered for approval unless a vocational evaluation of the employee is completed by a qualified vocational expert. This requirement can be waived by the parties.
Following the presentation of the Compromise and Release Agreement at a hearing, a WCJ will issue a written order approving the settlement. Either party has 20 days from the date of the written order to appeal that determination to the Workers’ Compensation Appeal Board. However, a Compromise and Release Agreement will not be set aside unless there is a showing of abuse of discretion, fraud, misrepresentation, concealment, or mutual mistake of fact at the time of settlement, and the appeal period is not intended as a time for Claimant to change his mind. North Penn Sanitation, Inc. v. WCAB (Dillard), 850 A.2d 795 (Pa. Cmwlth. 2004).
In Armour Pharmacy v Bureau of Workers compensation/Fee Review Hearing Office (National fire Insurance Company of Hartford), ____ A.3d ____ (Pa. Cmwlth. 2018), Commonwealth Court considered whether a Compromise and Release Agreement approved by a WCJ, which purported to relieve bot the Employer and the Claimant from the payment of any obligation to pay for unpaid compound cream bills prescribed by the Claimant’s physician and provided by Armour Pharmacy, precludes the pharmacy from nevertheless seeing payment through the Fee Review process. In concluding that the C&R Agreement did not relieve the Employer and its carrier from the obligation to pay for the compound cream bills, the court reasoned that neither the physician nor the pharmacy were parties to the Compromise and Release Agreement. According to the court, “The scope of 44(a) is limited to ‘parties interested’ that wish to ‘compromise and release any and all liability’…This does not include the provider. “
Thus, the parties to a C&R Agreement must address disposition of any unpaid bills by negotiating with the providers, if the intent of the C&R is to settle all liability from the employer and carrier. The court agreed that the provider’s due to process rights under the Act, except in accordance with due process of law.” The court observed that, prior to the settlement of the claim, the Employer did not deny the bills for the compound cream as unrelated to the work injuries nor resort to the utilization renew process to determine if the compound cream and the bills were reasonable and necessary. The court concluded that the “Claimant had no authority to ‘release’ employer from its liability from Pharmacy because Claimant was not ‘the person with the claim’… The parties to a C&R Agreement can bind each other, but they cannot release themselves from liability to a person who is not party to the C&R Agreement and who has given neither notice nor opportunity to be heard on the C&R Agreement.”
Every employer liable for workers’ compensation benefits in Pennsylvania must either insure through a licensed insurance company authorized to write workers’ compensation insurance in Pennsylvania, or through the Pennsylvania State Workers’ Insurance Fund, or qualify by law as a self-insurer.
WCA Section 305(a)(1), 77 P.S. §501(a)(1), requires, “Every employer liable under this act to pay compensation [to] ensure the payment of compensation in the State Workers’ Insurance Fund, or in any insurance company, or mutual association or company, authorized to ensure such liability in this Commonwealth, unless such employer shall be exempted by the [Department of Labor and Industry] from such insurance. Such insurer shall assume the employer’s liability hereunder and shall be entitled to all of the employer’s immunities and protection [under the Act].”
An employer failing to comply with the requirement to insure or qualify as a self-insurer “shall, upon conviction in the court of common pleas, be guilty of a misdemeanor of the third degree. If the failure to comply with this section is found by the court to be intentional, the employer shall be guilty of a felony of the third degree. Every day’s violation shall constitute a separate offense. A judge of the court of common pleas may, in addition to imposing fines and imprisonment, include restitution in his order: Provided, That there is an injured employee who has obtained an award of compensation. The amount of restitution shall be limited to that specified in the award of compensation.” WCA Section 305(b), 77 P.S. §501(b)
WCA Section 305(d), 77 P.S. §501(d), provides that if any employer “fails to secure the payment of compensation . . . as provided” above, “the injured employee or his dependents may proceed either under this act or in a suit for damages at law . . . “
Generally, if an employee or the employee’s dependents elect to bring an action at law “to recover damages for personal injury in the course of his employment, or for death resulting from such injury,”The Pennsylvania Workers’ Compensation Act provides that certain common law defenses are not available to the uninsured employer as a penalty for failing to insure. The defenses precluded include that the injury was caused in whole or in part by the negligence of a co-worker, that the employee had assumed the risk of injury, or that comparative or contributory negligence of the employee is the cause of the injury “unless it be established that the injury was caused by such employee’s intoxication or by his reckless indifference to danger.” However, the burden of proof as to this defense is upon the Defendant and is a question of fact to be determined by a jury. WCA Section 201, 77 P.S. §41.
Additionally, WCA Section 202, 77 P.S. §51, provides that the uninsured employer shall be liable for the negligence of its employees while they are working within the scope of their employment. “[Such] employee shall be the agents and representatives of their employers and their employers shall be responsible for the acts and neglects of such employees. . . “
The Pennsylvania Legislature created an Uninsured Employers Guaranty Fund (UEGF) available to pay claims for injuries occurring on and after January 8, 2007. WCA Section 1601, 77 P.S. §2701, et seq. The Fund is not an insurance company. Thus, the Fund is not liable for penalties or counsel fees as is any other insurance company or defendant.
The Act requires that before a claim petition may be filed seeking benefits from the Fund, the employee must first file a notice of claim against the uninsured employer. The UEGF is specifically authorized to institute a civil action to recover all sums paid, including counsel fees and defense costs, from the uninsured employer in the event of a decision granting the claim petition.
The creation of the Uninsured Employers Guaranty Fund raises a question whether an injured worker may pursue both a claim against the UEGF and, under WCA Section 201, and file a civil suit against the uninsured employer, thus creating a subrogation interest on behalf of the Fund.