June 2021 Case of the Month - Pennsylvania: Gross - Not Net - STD Credit is Now the Law
West Penn Allegheny Health System v. WCAB (Cochenour),
___ A.3d ___, filed April 16, 2021 (Pa.Cmwlth. 2021)
Facts
Claimant filed a Claim Petition in which she alleged that she sustained injury as a result of jostling while riding an employer-owned shuttle from a parking lot to her office location to start her workday. She sought recognition of a work injury, payment of wage loss benefits, medical bills, and counsel fees. Testimony was presented which called the incident itself into question and also which established that Claimant received short-term disability benefits for the period during which she was out of work. Taxes were deducted from the short-term disability benefits before they were paid to the Claimant. Ultimately, the WCJ granted the Claim Petition. He granted the employer a credit for the short-term disability benefits received, but only for the net amount.
Employer appealed on multiple grounds to the WCAB which affirmed the WCJ both as to the occurrence of the injury and as to the amount of the short-term disability credit. Employer argued on appeal to the Commonwealth Court that the credit for short-term disability benefits should be in the gross amount rather than the net amount received by the Claimant after deduction for taxes.
Holding
The Commonwealth Court affirmed the grant of the Claim Petition but reversed the WCAB with regard to the short-term disability credit. The Court, relying on Station v. WCAB(Pittsburgh Steelers Sports, Inc.), 608 A.2d 625 (Pa. Cmwlth. 1992), held that to the extent that non-pension disability benefits paid to the Claimant were funded by an Employer, the Employer would be entitled to a credit for the gross amount, rather than the net. The Employer, in this case, was granted a credit against wage loss benefits for the gross amount of short-term disability benefits paid to the Claimant.
Impact on Claim Handling
Oftentimes when a Claim is denied and subjected to litigation, an injured worker will apply for and receive short-term disability benefits from their Employer. While it has long been established that an Employer/Carrier is entitled to a credit for such benefits, the practice has been to award a credit for the net amount rather than gross amount paid. The best practice after Cochenour is to ensure that a statement is received and presented to the WCJ which documents the gross amount of short-term disability benefits paid to an injured worker before the deduction of taxes.
Disclaimer: This post does not offer specific legal advice, nor does it create an attorney-client relationship. You should not reach any legal conclusions based on the information contained in this post without first seeking the advice of counsel.