It is well established that Section 204(a) of the Pennsylvania Workers’ Compensation Act (PA WC Act) provides, in relevant part, that “if the employee receives unemployment compensation benefits, such amount so received shall be credited as against the amount of any workers’ compensation award made under Section 306 of the Act.” The Commonwealth Court of Pennsylvania recently addressed the issue of whether a credit for the Federal Pandemic Unemployment Compensation (FPUC) benefits an injured worker received in accordance with the Coronavirus Aid, Relief, and Economic Security (CARES) Act in Giles J. Cannon, Inc., v. Walker (WCAB), No. 1108 C.D. 2021 (Pa. Cmwlth. 2022).

In Walker, the Employer argued that it should have received a credit pursuant to Section 204(a) of the PA WC Act for FPUC benefits that were received by the Claimant. The Claimant admittedly received both unemployment compensation (UC) benefits under both Pennsylvania law and FPUC benefits pursuant to the Federal CARES Act. The Claimant disputed the Employer’s assertion that the Employer was entitled to a credit for Claimant’s FPUC benefits. The WCJ concluded that Employer was absolutely entitled to a credit for Claimant’s FPUC benefits. Thereafter, the Claimant appealed to the Workers’ Compensation Appeal Board (WCAB). The WCAB’s Order affirmed in part and reversed in part the WCJ’s Decision and reversed the determination that Employer was entitled to a credit for Claimant’s FPUC benefits.

Thereafter, the Employer filed a Petition for Review with the Commonwealth Court of Pennsylvania. The Employer argued that the WCAB erred by concluding that it is not entitled to a credit for Claimant’s FPUC benefits by maintaining that the Claimant’s FPUC benefits qualified as “unemployment compensation” pursuant to Section 204(a). The Employer also contended it was  entitled to a credit for Claimant’s FPUC benefits pursuant to the plain language of Section 204(a) because  the CARES Act characterizes FPUC benefits as “unemployment compensation.”

In holding that the Employer was not entitled to a credit for the Claimant’s FPUC benefits that were received in accordance with the Federal CARES Act, the Court noted that the CARES Act referenced FPUC benefits separately from UC benefits, permitted persons not otherwise eligible for UC benefits to receive FPUC benefits, and provided for federal reimbursement of amounts that a state paid for FPUC benefits. The Court concluded that these unique features rendered FPUC benefits “sufficiently distinct” from the type of benefits contemplated’ under Section 204(a) of the Act and that granting a credit would result in disparate treatment between those who are permitted to collect FPUC by virtue of having lost their jobs, and those who may not because they were  burdened with an injury in addition to being unemployed.

While this case did not end successfully for the employer, it emphasizes that employers must be vigilant in sending the Bureau Verification Forms (LIBC-750, 756 and 760) every six months to  injured workers to complete and return within thirty days. These forms require the injured workers report any receipt of benefits (including unemployment compensation) from which the employer can properly assert an offset credit under Section 204(a) of the PA WC Act to reduce future exposure on the claim.

Zachary M. Rubinich is a partner in our Philadelphia office. He focuses his practice on the defense of insurance carriers, self-insured entities and third-party administrators against workers’ compensation claims in Pennsylvania. Based on his extensive experience, the Pennsylvania Bar Association has certified him as a Workers’ Compensation Law Specialist. Zach has handled all aspects of litigation before workers’ compensation judges, the Workers’ Compensation Appeal Board, the Commonwealth Court and the Pennsylvania Supreme Court. Zach has been appointed to the following American Bar Association Tort Trial and Insurance Practice (TIPS) leadership positions: Vice-Chair of the Litigation and Trial Practice Committee; Vice-Chair of the Appellate Advocacy Committee; member of the Ethics and Professionalism Standing Committee; and member of the CLE Board Committee. He is the Past Chair of the ABA TIPS Workers’ Compensation and Employers’ Liability Law Committee from 2018-2019. He served as Vice-Chair of this WC committee from 2015-2018 and 2020-present. In addition, Zach served as Vice-Chair of the 2017-2018 American Bar Association Standing Committee for Diversity and Inclusion and is a Member of Rawle & Henderson’s DE&I Committee. Zach has been rated AV Preeminent by Martindale-Hubbell for the tenth consecutive year in 2022. He was selected as a Pennsylvania Super Lawyer by Super Lawyers from 2019-2021 and as a Pennsylvania Rising Star by Super Lawyers from 2010 to 2014. Zach was recognized as an International Advisory Experts (IAE) Award recipient in 2019 for his accomplishments as a workers’ compensation attorney in Pennsylvania. In addition, he was inducted as a Fellow of the College of Workers’ Compensation Lawyers Class of 2020.