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Employer Credit for Pandemic Compensation Denied

On January 3, 2022, a panel of the Commonwealth Court of Pennsylvania issued its Opinion in the case of Carbon Lehigh Intermediate Unit No. 21 v. Kimberly Waardal (WCAB), 750 C.D. 2021, in which the employer requested a credit against workers’ compensation benefits not only for unemployment compensation benefits the claimant received, but also pandemic compensation under the CARES Act implemented by the Federal Government in response to the Covid-19 Pandemic.

The facts as outlined in the court’s opinion are not in dispute, although some are unnecessary for purposes of this interpretation.  It would be sufficient to say that the workers’ compensation judge (WCJ) denied employer’s request for a credit for pandemic compensation while granting a credit for “regular” unemployment compensation benefits.

The judge reasoned that the pandemic compensation was not in any way based on the amount of a claimant’s earnings which, of course, is different from regular state-implemented unemployment compensation benefits or workers’ compensation benefits.

The WCJ also noted that the additional pandemic compensation (originally $600.00 per week but subsequently reduced to $300 per week prior to phase out), was in the nature of a general economic stimulus benefit from which all workers who were either unable or unavailable to work due to the pandemic would benefit.  The language of the CARES Act allowed payment of pandemic compensation simply on the basis of workers whose places of employment were closed due to the Covid-19 pandemic.

There was also an additional provision in the CARES Act which allowed for payment of these benefits to self-employed individuals, a category of worker which obviously may  not otherwise be entitled to unemployment or workers’ compensation benefits.

The employer’s appeals to the WCAB and Commonwealth Court resulted in orders affirming the WCJ.  The Commonwealth Court further reasoned that funding of the pandemic benefits was the critical issue in determining whether a credit should be permitted.  The federal government, under the CARES Act, was responsible for funding the pandemic compensation.  Once the pertinent agreement was executed between the state and the U.S. Secretary of Labor, the state would pay the benefits with reimbursement thereafter being made to it by the federal government.

The court also noted that the purpose behind Section 204(a) of the Workers’ Compensation Act, which allowed for the unemployment compensation credit (as well as various other credits and off-sets), was to prevent the payment of duplicate benefits by an employer.  Since pandemic compensation was in no manner directly funded by the employer, a credit against workers’ compensation could not logically be applied.

Finally, the court noted that if the credit were to be granted, an improper distinction would be created between injured and uninjured workers out of work due to the pandemic.  Those who had not suffered a work-related injury would be able to receive full unemployment compensation and pandemic compensation without reduction.  The category of injured workers, however, would receive “less” than their uninjured counterparts because of the additional credit.

There was reference made to a prior decision by the Commonwealth Court involving similar credit issues under the “Trade Act of 1974” which was designed to help workers impacted by imports.  Using similar reasoning related to the source of funding (here also by the federal government), the court declined to grant that employer a credit.  Dietrich Industries, Inc. vs. WCAB (Shank), 725 A.2d 252 (Pa. Commonwealth, 1999).

As the Carbon Lehigh case was just decided, it is too soon to tell whether a Petition for Allowance of Appeal will be submitted to the Supreme Court of Pennsylvania.