No Credit For Workers’ Comp Insurer For “Time Served” Before Conviction

Once an injured worker proves an entitlement to workers’ compensation benefits in PA, only certain things allow a Pennsylvania workers’ comp insurance company to stop paying those benefits.   Some of the more common things would be convincing a Workers’ Compensation Judge (WCJ) that the injured worker has fully recovered, has returned to working at pre-injury wages, or has left the labor market for reasons unrelated to the work injury.  Another basis for the stoppage of workers’ compensation benefits in PA is incarceration.

Under Section 306(a.1) of the Pennsylvania Workers’ Compensation Act (Act), “Nothing in this act shall require payment of compensation under clause (a) or (b) for any period during which the employe is incarcerated after a conviction . . . “  While this sounds simple, as with many things, there can be disagreements on the application.

Recently, the Commonwealth Court of Pennsylvania issued a decision in the case of Sadler v. Workers’ Compensation Appeal Board (Philadelphia Coca-Cola).  Here, the injured worker was receiving PA workers’ compensation benefits.  He was charged with a crime, and could not afford bail.  As such, he was incarcerated.  This, of course, would not allow a stoppage of workers’ comp benefits, since the incarceration did not come “after a conviction.”

Where it gets interesting is what happened next.  The injured worker pled guilty to the crime, and was sentenced to time served (525 days).  Since he was then released from incarceration, arguably, none of that time was served “after a conviction.”

The PA workers’ compensation insurance carrier still filed a Petition for Suspension, alleging that the guilty plea then made the time already served “after a conviction,” for which a credit should be given.  Litigation before a WCJ was successful for the insurance company, as the WCJ agreed this was “incarceration after a conviction” on these facts.  Appeal to the Workers’ Compensation Appeal Board (WCAB) only modified the decision of the WCJ to allow a credit against future workers’ comp benefits.

The Commonwealth Court of PA, however, saw things differently, and reversed the Suspension.  Using the words of the Act, the Court said that the injured worker served no time “after a conviction.”  Instead, he served the time because he could not afford bail.  The fact he was later credited for “time served” after the plea (conviction) did not change the facts.  The Court felt that the legislature could have written the law to accomplish this effect, but failed to do so.

The Court noted that the legislature did not use wording such as that found in another state, Rhode Island.  That statute provided, “an injured worker is not entitled to WC benefits ‘for any period during which the employee was imprisoned as a result of a conviction of a criminal offense,’ which ‘includes credit for time-served, such that the time served becomes a period served as the result of a conviction.’”  The Commonwealth Court of PA felt it incorrect to write such language into a law that did not contain those words.

This case also had an interesting issue with the calculation of the Average Weekly Wage (AWW) when the injured worker was employed less than 13 calendar weeks.  The Act says that, in such a case, the AWW is “the hourly wage rate multiplied by the number of hours the employe was expected to work per week under the terms of employment.”    And, we know from prior cases that the WCJ is the ultimate Finder of Fact.  So, the WCJ found the Employer witness more credible than the injured worker.

However, the Findings of Fact by a WCJ must be based on substantial competent evidence.  The WCJ found that the injured worker was expected to work 40 hours per week.  This was based on the Employer’s witness testifying “it was . . . four ten-hour shift[s],” except the WCJ then disregarded the remainder of that answer, “but it was explained to [Claimant] that there could and probably would be overtime because it was the busy time of the year when he was hired.”  Indeed, a further clarification, when asked if the overtime was guaranteed, the witness answered, “[i]n the busy season more than likely yes, because it was busy.”  As such, the Commonwealth Court of PA remanded the case back to the WCJ to recalculate the AWW, to consider the overtime that was ignored.

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