Unemployment Compensation Benefits Not Includable in Average Weekly Wage for PA Workers’ Compensation

The calculation of the Average Weekly Wage (AWW) under the Pennsylvania Workers’ Compensation Act has been explained previously on this blog. Generally, assuming the injured worker had been working for his or her employer for more than a year before the work injury, the AWW is calculated by taking the average earnings of the injured worker for the highest three quarters in the year immediately before the injury.

Occasionally, we have a question regarding whether the injured worker has been “employed” for more than a year before the injury, perhaps due to layoffs. The Supreme Court of Pennsylvania Courts told us in 2005, in Reifsnyder v. Workers’ Compensation Appeal Board (Dana Corp), that despite periods of layoff, the term of “employment” continued. In that matter, Mr. Reifsnyder was considered to have zero earnings for the weeks he was laid off, for the purposes of calculating his AWW.

Also in 2005, the Supreme Court of Pennsylvania told us, in Colpetzer v. Workers’ Compensation Appeal Board (Standard Steel), that when an injured worker is disabled by a work injury in the one year period prior to another work injury, the AWW for the subsequent injury should include the AWW from the previous injury for any periods the worker was disabled by the previous injury.

One area left unexplored, until now, was whether the receipt of unemployment compensation benefits, received in the year prior to a work injury, is includable in the AWW. To the surprise, and great disappointment, of injured workers in PA, and the attorneys representing injured workers in PA, The Commonwealth Court of Pennsylvania has found that unemployment compensation benefits are not to be included in the AWW when received in the year before a work injury.

In Lenzi v Workers’ Compensation Appeal Board (Victor Paving), the Court found that the Pennsylvania Workers’ Compensation Act does not provide for inclusion of unemployment compensation benefits in the calculation of the AWW, so they cannot be considered.

It is difficult to reconcile these cases logically. The injured worker maintained his employment throughout the period of the year before the injury, under Reifsnyder. However, here, the injured worker received unemployment compensation benefits in lieu of working for the weeks in which he was laid off. The Lenzi case concludes that the injured worker gets credit for zero earnings for the weeks he was laid off, despite the fact that he received the unemployment compensation benefits for those weeks. Indeed, it is difficult to understand how the receipt of workers’ compensation benefits, in Colpetzer, is different, fundamentally, than the receipt of unemployment compensation benefits.