Articles Posted in Wage Loss Benefits

One of the frequent questions we are asked is regarding the settlement of a Pennsylvania workers’ compensation claim.  In fact, there is a page on our website just devoted to settlements.  When considering whether to settle his or her case, there are several things an injured worker should consider.  Initially, it is important to note that not every workers’ comp case settles.  Workers’ compensation benefits can end for a variety of reasons, other than a settlement.  Therefore, just because you have had a work injury in PA, do not believe you are simply entitled to a settlement.

The timing of the case is always an important consideration when considering whether to settle a case.  We do not mean timing in a strict calendar sense, as there is no magic number of months or years which must go by before a case can settle.  Instead, we are looking at the posture of the case.  Is the injured worker still in active treatment?  Is surgery, or other invasive treatment still being planned?  Is there other health coverage available?  As to the case legally, we ask whether there is a current threat to the benefits?  Whether there is current litigation, and the chances of success?  What is the employability of the injured worker?  (Considering that encompasses both physical restrictions, as well as educational and work backgrounds).  As you can see, there are many factors going into whether now is the right time to settle.

Next, the question may be the value of the case.  Again, there is no magic formula.  A settlement only works if both sides agree.  It has to be voluntary for everyone.  Unlike a personal injury case, there is no pain and suffering in a PA workers’ compensation case.  A settlement purely reflects loss of earnings, and, if applicable, future medical treatment.  Obviously, the settlement figure is something to be negotiated.

Many injured workers in Pennsylvania know not to sign a document they receive from the workers’ compensation insurance company without checking first with an experienced workers’ compensation attorney. Unfortunately, few injured workers are aware that some documents exist in the Pennsylvania Workers’ Compensation Act which can cause workers’ comp benefits to be reduced, or stopped, even if the documents are NOT signed by the injured worker.

When an injured worker returns to work in PA, he or she is still entitled to workers’ compensation benefits if there is still a loss in earnings (maybe the modified job pays less per hour, or offers fewer hours). The workers’ compensation insurance company must take some action if it wishes to reduce, or stop, weekly compensation benefits. In the old days, the workers’ compensation insurance company would have to file a Petition for Modification or Suspension, and litigate the issue. This is no longer the case.

These days, the workers’ compensation insurance company can simply file a Notification of Modification or Suspension, which contains an affidavit that the injured worker has returned to work, whether at pre-injury or reduced wages. If the Notification of Modification or Suspension is not “challenged” (appealed) by the injured worker, the Notification of Modification or Suspension has the same legal effect as if the injured worker signed a Supplemental Agreement, agreeing that the injured worker did return to work at those wages.

A common fear with an injured worker is the impact of his or her employer, or the workers’ compensation insurance carrier, filing for bankruptcy. In Pennsylvania, an injured worker need not be concerned with such a development. Whether it is the bankruptcy of the employer, or the workers’ compensation insurance carrier, in PA, workers’ compensation benefits should not be disturbed.

When a party files for bankruptcy, which is governed by Federal law, the main purpose (or at least the immediate purpose) is the protection of the “automatic stay,” provided by Section 362(a)(1) of the Federal Bankruptcy Code, 11 U.S.C. §362(a)(1). The “automatic stay” causes any collections efforts (including any litigation) to be stopped. A creditor usually must apply for permission with the bankruptcy court, in order to have the stay lifted. Only if the request is granted, and the stay is lifted, can the creditor take any action on the debt (including litigation). The automatic stay allows payments from the bankrupt party to stop. This would, of course, be catastrophic for an injured worker who relies on Pennsylvania workers’ comp benefits.

Workers’ compensation laws are State laws, as opposed to Federal law, such as bankruptcy. One of the exceptions to the “automatic stay” is an exercise of a State’s “police powers,” under 11 U.S.C. §362(b)(4). The Commonwealth Court of Pennsylvania has recently confirmed that “the administration of worker’s compensation claims by the State … is a valid exercise of a governmental unit’s regulatory power, and is exempt from the automatic stay.” Pope & Talbot v. W.C.A.B. (Pawlowski), decided on May 21, 2008. Therefore, workers’ compensation benefits in PA are usually to be paid regardless of the filing of bankruptcy. Similarly, litigation in workers’ compensation cases in Pennsylvania may continue, despite the bankruptcy filing.

Logic may make you think that if you are permanently disabled from your career as a result of a work injury, you are free to take your pension and continue receiving workers’ compensation benefits. Unfortunately, this is not the case in Pennsylvania, and whether to take a pension in a PA workers’ compensation case is a very important decision, which should only be done after discussing your particular situation with an experienced Pennsylvania workers’ compensation attorney.

When an injured worker starts taking his or her pension in PA, the workers’ compensation insurance company can argue that the injured worker is no longer entitled to workers’ compensation benefits, because the injured worker has “left the workforce.” The injured worker must then show a Workers’ Compensation Judge either that he or she is actually seeking employment or that he or she is not capable of performing any work at all (not just the injured worker’s old job, but any job in the entire labor market) as a result of the work injury. If the injured worker does not prove one of these two things, a Workers’ Compensation Judge can suspend (stop) the injured worker’s wage loss benefits (the weekly or bi-weekly checks). The injured worker’s right to medical treatment for the injury is not affected.

The case I recently saw that brought this situation to mind, Mason v. W.C.A.B. (Joy Mining Machinery), was decided by the Commonwealth Court of Pennsylvania on March 18, 2008.

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