PA Work Comp Act allows for assessment of 50% penalty for delay in Fatal Claim Award

 

Timely benefit payment is required by the Pennsylvania Workers' Compensation Act. Section 428 of states that an employer violates the Act if it fails to make payments within 30 days of the date on which its obligation to pay arises. 

Section 430(b) of the Act specifically cautions that “any insurer or employer who . . . refuses to make any payment provided for in the WCJ’s decision without filing a petition and being granted a supersedeas shall be subject to a penalty as provided in section 435.

Only a grant of supersedeas relieves an employe/insurer of its obligation to pay an award.

 A recent appellate decision addressed the propriety of a WCJ assessment of a 50 % penalty for delay in payment of a Fatal Claim petition award. 

See: City of Philadelphia v. WCAB (Thompson) 217 C.D. 2020; May 26, 2021; (order for publication September 28, 2021) 

Factual & Procedural Background

A WCJ order granted a Firefighter Cancer Fatal Claim. The WCJ ordered Employer to pay indemnity benefits, funeral expenses, reasonable litigation costs and statutory interest. “Claimant is entitled to weekly benefits at the rate of [50%] of Decedent’s average weekly wage at the time he last worked in 2010 …”.

Employer appealed this award to the WCAB. The Board issued a denial of supersedeas.

Claimant filed a penalty petition as Employer failed to pay benefits following the WCJ’s fatal claim petition award and the Board’s order denying supersedeas.

After the penalty petition hearing, WCJ found Employer admitted that it had not paid Claimant any indemnity benefits. Instead, Employer argued that its failure to comply with the WCJ’s order and the Board’s denial of supersedeas was justified because it was unclear whether Claimant’s benefit rate was 50%, as provided for in the WCJ’s order, or 51% as provided for in the Act. Employer also asserted that it was unable to calculate Decedent’s AWW and the benefit rate.

In the WCJ penalty petition decision (rendered prior to Board remand order) WCJ rejected Employer’s arguments.  WCJ found the initial decision and order was “clear that 50% of Decedent’s AWW calculated at the time he last worked for Employer in 2010 should be paid with a statutory interest.

WCJ further found that irrespective of whether the benefit rate should have been 50% or 51% percent, this is not sufficient grounds for the Employer to blatantly disregard the WCJ order and the WCAB supersedeas denial.

WCJ stated -  while there was no earning documentation submitted in the claim petition litigation, Employer cannot credibly argue an inability to calculate an AWW and compensation rate inasmuch as wage records are within the complete control of  Employer.

Employer cannot credibly argue an inability to ascertain Claimant’s last date of work and/or retirement date as any attendance records for Claimant are within the complete control of the Employer. Any information presented by Claimant would have come directly from attendance records generated by Employer.

WCJ noted -  If a Board order calculates the wages differently than what was paid by Employer, Employer would have a Supersedeas Fund remedy for reimbursement of any overpayment.

WCJ found – the Employer arguments “to be disingenuous” as the initial WCJ order was clear and the information missing was within the control of Employer.

WCJ Penalty petition decision - Employer violated the Act. WCJ imposed a 50% penalty upon Employer for failing to comply with the WCJ order and the Board’s order denying supersedeas.

Note: the Board subsequently remanded the Employer appeal of the Fatal Claim award for the WCJ to reconsider the merits of the fatal claim petition based on intervening case law; the PA Supreme Ct decision in Sladek.

Employer appeal Penalty award to WCAB

Employer argued that Claimant had an affirmative duty to establish Decedent’s AWW and thus Employer did not violate the Act. 

WCAB- rejected Employer’s contention that the WCJ’s decision was unclear as to the date to be used to calculate the AWW and benefits due, as these issues are decided by statutory law “and the benefits due were discernable.”

WCAB - Employer presented no evidence of a good faith payment. Employer violated the Act. WCJ did not abuse her discretion in imposing a penalty.

Employer appeal of penalty petition award to Commonwealth Court

CW CT -  “It is well-settled that where an employer fails to commence payment of compensation in accordance with a WCJ’s order, the failure to make payment constitutes a violation of the Act and the employer is subject to the imposition of penalties”.

CW CT - Section 428 states that an employer violates the Act if it fails to make payments within 30 days of the date on which its obligation to pay arises. Further, section 430(b) of the Act specifically cautions that “any insurer or employer who . . . refuses to make any payment provided for in the WCJ’s decision without filing a petition and being granted a supersedeas shall be subject to a penalty as provided in section 435 … “Indeed, only a grant of supersedeas relieves an employer of an obligation to pay.” 

CW CT reviewed prior decisions assessing 50% penalties. The CW CT concluded - WCJ did not abuse her discretion in imposing a 50% penalty for Employer’s significant delay in tendering payments for indemnity benefits to Claimant after the Board denied supersedeas.

… As both the WCJ and the Board recognized, Employer was (and presumably continues to be) in possession of records that not only pertain to—but also serve as a sufficient basis to verify—Claimant’s actual wages and AWW. Employer does not assert that it did not have access to such information.

Recommendations/ Practice Pointers 

As suggested by the Appeal Board, a best practice is to issue payment of a disputed award. Only submission and grant of a supersedeas request, allows the Employer to withhold benefit payments during the pendency of one's appeal.

Denial of the supersedeas request, requires timely benefit payment. 

As a general rule, the claimant has the burden of proof to establish each element of the claim petition. This would include the first date that benefit are requested, together with submission of documentation of the average weekly wage. 

However, in this instance, the WCJ, WCAB and Commonwealth Court concluded the Employer has access to this information - such that, its explanation of its failure to commence payment, lacked merit.