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The Pennsylvania Commonwealth Court Explains That, Although a Claimant's Average Weekly Pre-Injury Wage Figure Was Increased Because of Overtime Pay, He Is Not Necessarily Entitled to Wage Loss Benefits Once He Returns to Work and Overtime Is Then Unavailable, If Overtime Is Also Unavailable at That Time to His Similarly Employed Co-Workers Across-the-Board


June 17, 2011

Background Facts of Case

Claimant sustained a work injury in October, 2006.  He was thereafter paid total disability benefits appropriately under the terms of a Notice of Compensation Payable.  Prior to the injury, he worked overtime, and, of course, his overtime pay was included in his average weekly pre-injury wage figure calculation, from which his corresponding weekly benefits rate was derived.  On March 20, 2007, claimant returned to work without physical restrictions, and his wage loss benefits payments were Suspended.  As of September, 2007, overtime work was no longer available to claimant because of a downturn in the economy adversely affecting the employer.  In fact, overtime work was eliminated for all employees there.  Claimant earned approximately $211 less per week without the overtime pay, in comparison with his average weekly pre-injury wage figure.  In November, 2007, claimant filed a petition seeking parti­al disability benefits payments (i.e., two-thirds of the difference between his average weekly pre-injury wage figure and his current pay per week), effective March 20, 2007, alleging that his work injury had caused him a reduction in his earning power.  This matter was litigated before a Workers' Compensation Judge (WCJ). 

First of all, in reviewing the medical opinion evidence, the WCJ agreed that claimant had returned to work without physical restrictions.  (An independent medical examination physician concluded that claimant had no physical restrictions.  Claimant's treating physician said that claimant should not lift more than 50 pounds and that he may require occasional lifting assistance, but it was further noted that sometimes claimant had even needed such assistance pre-injury.  Therefore, the WCJ determined that, currently, claimant had no real physical restrictions attributable directly to the work injury.)  Although the WCJ concluded that claimant was indeed eligible for partial disability benefits from March 21, 2007 through September 30, 2007, the WCJ then ordered a Suspension effective October 1, 2007.  He noted that, at that point, overtime work was no longer available to any employee at claimant's company.

On appeal, the Workers' Compensation Appeal Board (WCAB) reversed the finding of Suspension.  Employer appealed this holding to the Pennsylvania Commonwealth Court.

Commonwealth Court's Holding

The Commonwealth Court decided that claimant's loss of earnings, in comparison with his average weekly pre-injury wage figure, effective October 1, 2007, was no longer due to the work injury.  Therefore, the Court held that a Suspension of benefits was proper from that point onward.  Overtime work hours were unavailable across-the-board to all the employees of claimant's company as of October 1, 2007.  True, claimant had not recovered physically from his work trauma, and there were some residuals remaining from his occupationally-related biceps injury.  However, these residuals did not cause any new physical restrictions in the context of his regular pre-injury job duties.

In any event, the Court concluded that if claimant were permitted to collect partial disability benefits under this set of circumstances, his receipt of workers' compensation indemnity benefits, combined with his wages, would exceed the current wages of his similarly employed co-workers, in violation of Section 306(b)(1) of the Pennsylvania Workers' Compensation Act, as amended.  Section 306(b)(1) discusses the concept of partial disability, and the last half-sentence of this provision is relevant to the issue involved in this case:  " . . .in no instance shall an employe receiving compensation under this section receive more in compensation and wages combined than the current wages of a fellow employe in employment similar to that in which the injured employe was engaged at the time of the injury."

The Court stated that in order for any partial disability benefits payments to be reinstated, claimant would have to prove his earning power again became adversely affected by residuals of the work injury.  For instance, if overtime work became available, he would have to establish that medically, his condition, attributable to the occupational injury, precluded his performance of overtime work.  Again, though, the downturn in employer's current economic circumstances was the factor that led to claimant's diminished wages, effective October 1, 2007, compared to his average weekly pre-injury wage figure, not any residual of the occupational injury.

Lesson

The last sentence of Section 306(b)(1), quoted above, is somewhat obscure.  However, in investigating whether an injured worker is potentially entitled to partial disability benefits once he returns to work, it is important to determine the actual cause of any wage loss he is experiencing in comparison with his pre-injury earnings level.  Is the cause due to residuals of the occupational injury, precluding work paying higher wages, or precluding overtime pay, for the type of work or activities claimant performed pre-injury?  Or, is a reduction in pay due to economic circumstances at the employer that also adversely affect claimant's similarly employed co-workers, in the same fashion?  If the unavailability of overtime for the claimant who has returned to work is not due to residuals of his work injury, but instead results from overtime being eliminated for the claimant and all his similarly employed co-workers, then, under Section 306(b)(1), that claimant would be unentitled to partial disability benefits based on a lack of overtime pay earned, although such overtime pay was used to compute his average weekly pre-injury wage figure.  In other words, in this situation, the claimant's post-injury earnings have not been reduced, in comparison with his pre-injury earnings, due to the work injury.  Therefore, a Suspension of benefits under the circumstances is appropriate under the last sentence of Section 306(b)(1).  Accordingly, when an individual returns to work in a similar situation, the cause of any reduced earnings must be fully analyzed to ascertain whether the standard under Section 306(b)(1) would apply to preclude partial disability benefits eligibility.