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If your business has employees in the state of Pennsylvania, you’ll need to make sure you adhere to Pennsylvania’s Workers’ Compensation Insurance laws. Workers’ Compensation provides medical and financial benefits for employees who suffer work-related injuries or illnesses or for their survivors in the case of an employee death.
Who needs Workers’ Compensation Insurance in Pennsylvania?
Pennsylvania requires all employers who have at least one employee to obtain Workers’ Compensation Insurance. In Pennsylvania, an “employee” is generally defined as any individual who performs service for another in exchange for any sort of compensation.
The Pennsylvania Workers’ Compensation Act (WCA) defines all of the requirements for Workers’ Comp in Pennsylvania, and the Pennsylvania Department of Labor and Industry (PDLI) monitors, enforces, and administers the program. Ensuring your company is in compliance is critical, as there are serious penalties and fines for those who fail to abide by state regulations.
What employees are covered under Workers’ Compensation in Pennsylvania?
Almost all workers are covered under Workers’ Compensation in Pennsylvania. If you provide work or services for an employer, and you are not an independent contractor, you will likely be eligible for Workers’ Compensation Insurance.
The following are categories of employees that are eligible for Workers’ Comp coverage:
- Full-time, part-time, and seasonal employees
- Apprentices and interns
- Undocumented workers
- Agricultural workers who work 30 or more days a year or earn $1,200 or more a year from one employer
The following are categories of employees that are generally excluded from Workers’ Comp coverage:
- Independent contractors
- Casual employees
- Volunteers, except those of certain emergency and state services
- Domestics workers who have not elected with the PDLI to be covered under the WCA
- Sole proprietors or general partners
- Employees who have been granted a personal religious exemption
- Licensed real estate salespersons or brokers paid on a commission-only basis and qualifying as independent contractors for state and federal tax purposes
What Workers’ Compensation benefits do employees receive?
Under Workers’ Compensation in Pennsylvania, employers are required to provide the following benefits to employees who are injured in the course of employment:
- Employers are required to cover all medical expenses for reasonable surgical and medical services rendered by physicians or other health care providers.
- Employers establish a list of at least six designated health care providers. The employee is required to use these employer-appointed health care providers for a period of 90 days, but the employee may receive an additional opinion from any health care provider of their own choice if invasive surgery is prescribed. After the 90-day period, any subsequent treatment may be provided by a health care provider of the employee’s own choice.
- In addition, the employer is responsible for covering medicines, supplies, hospital treatment, services, orthopedic appliances, and prostheses.
- Employers are required to provide payment for semi-private accommodations should the employee require hospital confinement.
Total Disability Benefits
- If a physician determines that an employee is totally unable to work due to a work-related condition, he or she is eligible to receive Total Disability (TD) benefits, which provides two-thirds of a worker’s average weekly wage pre-injury.
- Temporary Total Disability (TTD) benefits are available for 104 weeks. An exam can be requested within 60 days of the end of the 104-week period. If the employee has an impairment rating of at least 35 percent, the employee is entitled to ongoing Permanent Total Disability (PTD) benefits. Partial Disability (PD) benefits are granted to employees with an impairment rating of less than 35 percent.
- The PDLI establishes minimum and maximum benefit amounts, which change yearly. For accidents that occurred in 2021, the maximum TD benefit was $1,130 per week, and the minimum benefit amount was 90 percent of the employee’s average weekly wage if that wage is $627.77 or less.
Partial Disability Benefits
- An injured employee may return to work while recovering in a partial or limited capacity. If the employee works fewer hours or receives lower wages during this time, he or she may be eligible for Partial Disability (PD) benefits.
- PD benefits provide two-thirds of the difference between the employee’s pre- and post-injury average weekly wage.
- PD benefits are available for a maximum of 500 weeks.
- The PDLI establishes minimum and maximum benefit amounts, which change yearly. For accidents that occurred in 2021, the maximum PD benefit was $1,130 per week, and the minimum benefit amount was 90 percent of the employee’s average weekly wage if that wage is $627.77 or less.
Specific Loss Benefits
- Employees who permanently lose certain body parts and functions may be entitled to a specific loss award. Body parts that are covered include hands, forearms, arms, feet, lower legs, legs, eyes, thumbs, toes, and even the loss of hearing.
- Specific loss benefits are paid without regard to the amount of time lost from work and whether the employee returns to work.
- Injured employees are compensated for specific losses based on two-thirds of their pre-injury wage, multiplied by the number of weeks established for the loss in question.
- Serious and permanent disfigurement to the face, head, or neck area may entitle the worker to compensation of two-thirds of wages for a maximum period of 275 weeks.
- Employers must cover funeral expenses up to $7,000.
- A worker’s surviving dependents may be eligible to receive up to 66 and two-thirds percent of the deceased employee’s average weekly wages, up to the maximum set by the PDLI. For accidents that occurred in 2021, the maximum benefit was $1,130 per week.
- The spouse of a deceased employee is eligible to receive death benefits for the rest of their life unless they remarry. In that case, the spouse is eligible to receive a lump-sum payment of 104 weeks.
- Children are eligible to receive benefits until they turn 18, or 23 if they are enrolled in college, university, or trade school. Any child who is physically or mentally incapacitated is eligible to receive benefits for the rest of their lives.
What are the penalties for breaking Pennsylvania Workers’ Compensation laws?
Failure to adhere to the Workers’ Compensation laws set out by the WCA can result in significant fines and even imprisonment. In order to avoid any costly penalties, it’s important to consult the WCA or your insurer to ensure you are in compliance. Below are the major ways in which companies can be penalized:
Failure to Maintain Coverage
- Failure to secure Workers’ Compensation Insurance can result in a third-degree misdemeanor conviction, punishable by a fine of up to $2,500 fine, up to one year of imprisonment, or both.
- If it is determined that the failure to comply was intentional, the employer may face a third-degree felony conviction, punishable by a fine of up to $15,000, up to seven years imprisonment, or both.
- Each day of failing to secure adequate coverage can be counted as a separate offense, meaning additional jail time and penalties are possible.
- Employers may also be ordered to pay restitution to injured employees, which may include compensation owed, attorney’s fees, and interest.
- Employers who commit Workers’ Compensation fraud may face civil penalties of $5,000 for the first violation, $10,000 for the second violation, and $15,000 for each subsequent violation. Employers may also be ordered to pay court costs and reasonable attorney fees to the prosecuting authority.
- Employers may also face criminal penalties for Workers’ Compensation fraud, including a third-degree felony charge, punishable by a fine of up to $15,000, up to seven years imprisonment, or both.
- Fraudulent activities include understating payroll and misclassifying employee job codes in order to reduce premiums.
How much does Workers’ Compensation Insurance cost in Pennsylvania?
According to the National Academy of Social Insurance Workers’ Compensation Report (November 2020), the average employer cost for Workers’ Compensation in Pennsylvania was $1.35 per $100 of covered wages. This figure is estimated across all insurers and all industries, so the cost to your particular business may vary.
How does the Workers’ Compensation claims process work in Pennsylvania?
The claims process in Pennsylvania begins with the employee. If an employee suffers a work-related injury or illness, he or she must report the condition to the employer in writing within 21 days of the injury or accident. Any delay in reporting may result in delays in the claims process or denial of the claim.
Employers must provide a report to the PDLI and their insurer for any worker injury that results in a disability lasting longer than one day. Reports of worker fatalities must be filed within 48 hours, and all other injury reports must be filed within seven days.
Employers must promptly investigate the incident and approve or deny the claim within 21 days of being notified of the accident. If the claim is approved, the insurer must begin paying benefits to the injured employee within 21 days of being notified of the accident.
If a claim is denied, the employer or insurer must notify the employee in writing, along with any applicable medical providers and the PDLI. Employees have up to three years to file a claim petition to dispute a denial.
Pennsylvania Workers’ Compensation Insurance Resources
For more information on Pennsylvania Workers’ Compensation laws and requirements, please visit the following resources: