Navigating Workers’ Compensation Settlements in Pennsylvania: A Comprehensive Guide
Understanding the Pennsylvania workers’ compensation settlement process can be overwhelming. Knowing what goes into a fair payout is critical for ensuring you receive the maximum compensation possible. It’s also key to understanding how workers’ compensation settlement values are calculated.
At Kitay Law Offices, we understand the difficulty and uncertainty involved in this process. Our Pennsylvania workers’ compensation lawyers are here to help! This Ultimate Guide to the Pennsylvania Workers’ Compensation Settlement Process can help ensure you are on the right track. That being said, it is highly important that you consult with an experienced attorney throughout the settlement negotiation process.
Read on to learn more about how these tools can help you get the most for your work-related injury settlement.
Is there a Pennsylvania workers’ compensation settlement chart or body parts chart?
There is no official Pennsylvania workers’ compensation settlement chart. However, you can consider a number of factors to estimate your settlement value. For example, factors may include the severity of your injury, any pre-existing conditions, and whether you suffer from permanent disability. Additionally, you should also consider the medical costs associated with treating your injury and time lost from work.
On a related note, however, there is a “chart” of sorts that is related to a “specific loss.” A specific loss is an injury that results in the permanent impairment and total loss of use of a body part. This type of injury can be caused by an accident or illness that occurs on the job. Examples of specific losses include amputation, paralysis, blindness, and deafness.
Specific loss examples
An amputation is one of the most common forms of specific losses that occur in workers’ compensation cases. Importantly, an amputation may entitle you to a specific number of weeks of wage loss benefits. These benefits are paid at your Compensation Rate. In addition, you may be entitled to additional wage loss benefits if you suffer other injuries. Importantly, these other injuries must be “separate and apart” from your amputation.
As an example, however, here is a list of some body parts and the amount of weeks of benefits you may be eligible to receive if you suffer an amputation:
- Hand – 335 weeks
- Arm – 410 weeks
- Foot – 250 weeks
- Thumb – 100 weeks
- Big toe – 40 weeks
In addition to an amputation, you can receive benefits if you lose your sight or hearing. A loss of sight can result in up to 275 weeks of benefits. Further, a loss of hearing can result in up to 260 weeks of benefits.
Keep in mind that the above is not a complete list. In addition, the number of weeks of benefits is subject to change if the law is updated in the future.
What factors are considered when determining the settlement value of a workers’ compensation case?
Two of the most important factors in determining the settlement value of your workers’ compensation case are your Average Weekly Wage and your medical costs.
Average Weekly Wage
Generally, your Average Weekly Wage is calculated by looking at your four prior completed quarters of work. Your total wages from each quarter are added up and the average wage for each quarter is calculated. Then, you take the highest 3 of those 4 prior quarters and calculate the average. This gives us your Average Weekly Wage.
For example, let’s say you were injured on April 15, 2023, you worked 40 hours per week, and you made $18.00 per hour. Further, lets assume you worked in this same position and at this same pay rate for the past 2 years. In that situation, here is how we would calculate your Average Weekly Wage:
- Calculate your gross wages for the 13-week period from January 14, 2023 through April 14, 2023. If you did not miss any time during that period, you would have made $9,360.00. Your gross wages are divided by the 13-week period to provide an average of $720.00 per week.
- Same calculation, but for the 13-week period from October 14, 2022 through January 13, 2023. In this period, let’s assume you took 2 weeks of unpaid vacation. So, your gross wages would be $7,920.00, providing an average of $609.23 per week.
- We’ll do the same calculation, but for the period from July 14, 2022 through October 13, 2022. In this period, let’s assume you worked 20 hours of overtime and were paid at time-and-a-half for those hours. Your gross wages would be $9,540.00, which averages out to $733.85 per week.
- Finally, we’ll examine the period from April 13, 2022 through July 13, 2022. Here, let’s assume you missed 1 week of unpaid time. So, your gross wages would be $8,640.00 with an average of $664.62 per week.
Now, we find the 3 highest-paid periods from the calculations above and add them together. In our example, we are adding $720.00+$733.85+$664.62, which equals $2,118.47. Finally, we divide $2,118.47 by 3 (for the 3 periods of 13-weeks) and arrive at an Average Weekly Wage of $706.16.
We still have one more step, however. This is because the Pennsylvania Workers’ Compensation Act does not pay you your Average Weekly Wage. Instead, we have to find your Compensation Rate. Let’s look at the table:
In our example, your Average Weekly wage of $706.16 falls into the bottom category for injuries occurring in 2023. So, your Compensation Rate is 90% of your Average Weekly Wage. Your Compensation Rate, therefore, is $635.54 per week.
The above tells us how much you should receive from Workers’ Compensation for each week you miss from work. Also, keep in mind that there are other methods of calculating your Average Weekly Wage and Compensation Rate. This is because the method used depends on the nature of your work, how long you have been at the job, and other factors.
If you are expecting to have high medical costs in the future due to your work injury, it is likely that the settlement value of your case could be higher. This is because the settlement should provide financial support for any future medical costs you may incur as a result of your work injury.
When calculating your settlement, insurance companies will look at all reasonable and necessary expenses related to your injury, including current and anticipated future medical expenses. Therefore, if you anticipate having high medical costs in the future such as surgeries or injections, it’s important to keep those estimated costs in mind when negotiating your settlement amount. Additionally, you should include long-term care costs like home health aides that may be needed down the line.
Is there a formula or guideline for calculating the settlement value of a workers’ compensation case in Pennsylvania?
There isn’t a specific formula or guideline for calculating the exact settlement value of a workers’ compensation case in Pennsylvania. Settlement values can greatly vary depending on the unique circumstances of each case. However, there are several factors that are commonly taken into account when determining the settlement value. These factors may include:
- Severity and nature of the injury sustained;
- Medical expenses incurred as a result of the injury;
- Extent of any permanent disability or impairment;
- Impact of the injury on the claimant’s ability to work and earn wages;
- Duration of temporary disability benefits;
- Estimated future medical expenses related to the injury; and
- Claimant’s age and work history.
Consult with an experienced workers’ compensation attorney to ensure you get the best settlement possible.
Can I negotiate the settlement value of my workers’ compensation case with my employer or their insurance company in Pennsylvania?
Yes, you can negotiate the settlement value of your workers’ compensation case. Importantly, the initial settlement offer may not always represent the full and fair compensation you deserve for your injury. Negotiation is often a key part of the process to ensure that you receive an appropriate settlement amount.
During the negotiation process, you and your attorney will argue for a higher settlement value. Supporting evidence may include medical records, expert opinions, and more.
Throughout the negotiation process, it is crucial to maintain a professional and objective approach. Keep in mind that the goal is to reach a fair and acceptable agreement for both parties involved.
Should I accept the initial settlement offer for my workers’ compensation case in Pennsylvania?
The first settlement offer you receive is typically not the best possible offer. So, it is best to consult with an experienced attorney before settling your case. While the initial offer may appear reasonable, it may not fully account for all the damages you have suffered. The workers’ compensation insurance carrier is not looking out for your best interests.
Before accepting any settlement offer, consider the following:
- Evaluate your case thoroughly: Ensure that you have a comprehensive understanding of the extent of your injuries, medical expenses, lost wages, and any potential long-term effects on your ability to work and earn income.
- Seek professional advice: Consult with a knowledgeable workers’ compensation attorney who can provide objective guidance on whether the initial offer is fair and adequate in light of the specifics of your case.
- Consider long-term implications: Keep in mind that accepting a settlement typically means releasing your employer and their insurance company from any future claims related to your injury. It is crucial to assess whether the settlement offer accounts for any ongoing or future medical expenses and wage losses you may experience.
- Negotiation potential: Remember that the initial offer is often just a starting point for negotiations. You and your attorney may be able to present evidence and arguments supporting a higher settlement value.
It is crucial to carefully evaluate the initial settlement offer and seek professional advice. As a result, you can make a more informed decision about the settlement value of your case.
What happens if I don’t agree with the settlement value offered for my workers’ compensation case in Pennsylvania?
If you do not agree with the settlement value offered for your workers’ compensation case in Pennsylvania, you can negotiate.
However, not all workers’ comp claims resolve in a settlement. In that situation, you can allow the Workers’ Compensation Judge to decide your case. When you do, however, be aware of what the judge can and cannot do under the law.
Typically, a Pennsylvania Workers’ Compensation Judge is allowed to decide the following:
- Determine whether you suffered a “work injury” under the law;
- Compel payment of medical bills related to your work injury;
- Award monetary compensation for the time you missed from work due to your work injury;
- Decide when you have “fully recovered” from a work injury;
- Cut off your medical or wage loss payments; and
- Award penalties against your employer if they presented an “unreasonable contest” to your claim for workers’ compensation benefits.
While the above is not an exhaustive list, you may notice something very important that is missing. The judge CANNOT award you any compensation for your pain and suffering due to your work injury.
This is a major difference between civil law and the Pennsylvania Workers’ Compensation Act. Under Pennsylvania law, you are not entitled to any compensation for your pain and suffering related to a work injury. Further, a Pennsylvania Workers’ Compensation Judge cannot award you any additional compensation for your pain and suffering.
So, ensure you discuss this important topic with your workers’ compensation lawyer. It is an important distinction to make between civil law and workers’ compensation law in Pennsylvania because it can significantly affect the settlement value of your case.
What is a mediation and how can it help with settlement negotiations?
Mediation is a process that can be used to resolve disputes in workers’ compensation cases in Pennsylvania. The process involves bringing together the parties involved in the dispute, including the injured worker, the employer, and their respective attorneys, to discuss and negotiate a resolution. The goal of mediation is to reach an agreement that is satisfactory to all parties involved.
The mediation process typically begins with each party submitting a written statement outlining their position on the issue at hand. The mediator is, typically, a Workers’ Compensation Judge who is different from the one who is actually handling your case. This is important because you can be sure that anything said during the mediation will have no effect on the ultimate outcome of your case if it does not settle.
During the mediation, both sides can present evidence and make arguments for their positions. The mediator will also provide guidance and advice throughout the negotiation process.
If an agreement is reached during mediation, it must be approved by a judge before it can be enforced. This approval ensures that it meets all legal requirements. If no agreement is reached during mediation, your case will continue and will eventually be decided by the judge who is handling your case.
Time Limits and Deadlines for Settling a Workers’ Compensation Case in Pennsylvania
In Pennsylvania, there are no specific time limits for settling a workers’ compensation case. However, there are important deadlines related to filing claims and appealing decisions. Being aware of these timeframes is crucial to ensure that you preserve your rights under the Pennsylvania Workers’ Compensation Act.
Key deadlines to keep in mind include:
- Reporting the injury: You should report your workplace injury to your employer as soon as possible, ideally within 21 days of the injury. The maximum time allowed for reporting an injury is 120 days from the date of the incident or the date you become aware of the work-related nature of the injury.
- Filing a Claim Petition: If your employer or their insurance company denies your claim or fails to provide appropriate benefits, you may file a Claim Petition with the Pennsylvania Bureau of Workers’ Compensation. You should do this within three years from the date of the injury.
- Appealing a decision: If you disagree with a decision made by a Workers’ Compensation Judge, you have 20 days from the date of the decision to file an appeal to the Workers’ Compensation Appeal Board.
While there are no specific time limits for settling a case, it is generally in the best interest of all parties involved to reach a resolution as efficiently as possible. Delays in settling a case can prolong uncertainty and financial strain.
Options for Lump Sum Settlements in Pennsylvania Workers’ Compensation Cases
Yes, you can receive a lump sum settlement for your workers’ compensation case in Pennsylvania. A lump sum settlement, often referred to as a Compromise and Release Agreement, involves the injured worker agreeing to resolve their workers’ compensation claim in exchange for a one-time payment, which is either from the employer or their insurance company.
In a lump sum settlement, both parties negotiate and agree upon a specific amount that is intended to cover the injured worker’s current and future medical expenses, wage loss benefits, and any other relevant damages related to the workplace injury. It is important to note that by accepting a lump sum settlement, you are typically giving up your right to pursue any future claims related to your injury.
Understanding the Risks Involved in Negotiating Workers’ Compensation Settlements in Pennsylvania
The risks that apply when negotiating a workers’ compensation settlement in Pennsylvania vary with each case. However, the two most common petitions that are involved in any case are a Claim Petition and a Termination Petition. Examining each of these will help explain the most common risks involved in settling your case.
If your employer initially denies your Pennsylvania workers’ compensation claim, your attorney will be able to file a Claim Petition. This petition places your case before a Workers’ Compensation Judge in court. Typically, your petition is alleging the following:
- You were injured;
- Your injury was reported to your employer in a timely manner;
- Your injury occurred within the course of your employment;
- You have incurred medical expenses related to your work injury that you want your employer to pay; and
- You have missed time from work as a result of your work injury and you want your employer to compensate you for that missed time.
Once you file your Claim Petition, the court process begins. And as part of that, your employer will be allowed to send you to an Independent Medical Evaluation (IME). The IME will typically occur within about 45 days after your case has been put into the court process.
Your IME is a one-time medical appointment, paid for by your employer, where you are evaluated by a healthcare professional. The IME doctor will then examine you and write a report. Most often, the report will be favorable to your employer. Typically, it states that you either never suffered a work injury or that you have already recovered.
Importantly, your case will not remain in court forever. If you do not reach a settlement agreement, your case will typically be decided by the Workers’ Compensation Judge about 1 year after it was initially put into court.
As a result of the above important events, we can examine some common risks to consider during the settlement negotiation process.
The judge may decide that you never suffered a work injury
Unfortunately, there is always a risk that the judge may believe that you never suffered a work injury. If the judge makes that decision, you would not be entitled to any workers’ compensation benefits at all. That means your employer would not have to pay for any of your medical bills and would not have to pay you anything for the time you missed from work. In other words, you get $0.
Depending on the evidence in your case, your attorney will be able to advise you on how great the risk is that the judge may find you did not suffer a work injury. This can be a significant risk.
You may be found to have recovered as of the date of the Independent Medical Evaluation
In this situation, the Workers’ Compensation Judge may decide that you did suffer a work injury and that your injury did cause you to miss time from work. This is great news and means that you are entitled to received both medical and wage loss benefits as a result of your work injury.
However, in this situation the judge may also find that you had recovered as of the date that you attended the Independent Medical Evaluation (IME). Therefore, you would only receive compensation for that “closed period” of time.
For example, let’s assume you were injured on January 1, 2023 and that you began missing time from work immediately. Let’s also assume that your Compensation Rate was $500 per week. Further, let’s assume that your IME occurred on March 2, 2023 and that the judge would be making a decision on your case in December 2023 if you are unable to settle your case before that time.
In our example, if the judge finds that you have recovered as of the date of your IME, you will only be able to receive wage loss benefits that cover the period of time from January 1, 2023 through March 1, 2023. That period of time is approximately 8 weeks. Therefore, you would only receive $4,000.00 as a result of the judge’s decision. However, if you waited until December 2023 for the judge to make that decision, you would have already been out of work for 11 months!
In this case, it is clearly not worth being out of work for 11 months to only receive $4,000.00 in wage loss benefits. This is a huge risk that did not work out in our favor.
The judge may issue a fully favorable decision
The best result possible if your case does not settle is when the Workers’ Compensation Judge issues a fully favorable decision. This would mean that the judge found the following:
- You suffered an injury in the course of your employment;
- Your injury was timely reported;
- Your employer is responsible for paying medical and wage loss benefits related to your work injury;
- You had not yet fully recovered from your work injury as of the date of the IME; and
- Your employer is responsible for continuing to pay your medical and wage loss benefits into the future (until something else may change with your case).
In this situation, you would receive wage loss benefits covering the entire time you have been out of work due to your injury. In addition, your employer would be required to pay for the medical expenses you have incurred due to your work injury. Most importantly, these benefits would continue into the future until a date yet to be determined.
And while there is no set end date on the payment of your wage loss and medical benefits in this circumstance, keep in mind that your employer is allowed to challenge your benefits as many times as they want. In other words, it is highly likely that your case will end up back in court again at some point in the next several months.
Then, you will have to fight to keep your benefits from being terminated. This brings us to the next common situation where we evaluate risk when negotiating a settlement in a workers’ compensation case.
You employer will file a Termination Petition when your claim has already been accepted, but your employer wants to stop paying benefits. In filing a Termination Petition, your employer is putting your case in court and in front of a Pennsylvania Workers’ Compensation Judge. The petition will allege that you have fully recovered from your work injury and that you are able to return back to your full-duty work, without any restrictions.
Request for Supersedeas
Within the first few weeks of the Termination Petition being filed, an initial hearing will occur. During this hearing, your employer will request that the judge grant “supersedeas.” This fancy legal term is, essentially, your employer alleging that they have enough evidence at this early stage of the case that the judge should stop your wage loss benefits immediately.
Your workers’ compensation lawyer will argue against this request for supersedeas. And while it is relatively rare for a judge to grant the request for supersedeas, there is still a risk that it may happen. Therefore, there is a risk that your wage loss benefits may stop within a matter of a few weeks after your employer files a Termination Petition.
Assuming the request for supersedeas is denied, you will continue receiving your wage loss benefits while your case moves through the court process. Again, if you do not settle your case, the judge will eventually make a decision approximately 1 year after your case goes into court. By the time the judge makes a decision, therefore, you would have continued to receive about 52 weeks of your wage loss benefits.
The big risk, however, is that the judge may grant the Termination Petition. If so, that means the judge is stopping both your wage loss and medical benefits completely. You can think of this like a light switch. Before, your benefits were on, but now they are turned off. Alarmingly, you benefits stop the same day that the Workers’ Compensation Judge issues their decision. There is no time to prepare and no warning. This is a huge risk.
What happens after I agree to settle my case?
Under Pennsylvania law, all settlements must be approved by a Workers’ Compensation Judge. Once you have verbally agreed to settlement terms, a court hearing will be scheduled with the judge. Most often, the hearing will occur within about 2-4 weeks from the date you agree to a settlement.
Compromise & Release Agreement
Prior to the hearing, your attorney and the attorney for your employer will agree on the specific written terms that will be included on settlement documents. We call these documents a Compromise & Release Agreement. This Compromise & Release Agreement (C&R) must be used in all workers’ compensation settlements in Pennsylvania.
Once the documentation is in order, you will review the C&R with your lawyer. Your attorney will ensure that you understand all the terms of the agreement. This includes what you are receiving, what you are giving up, and the effect the settlement will have on your future rights.
Most commonly, you will be agreeing to receive a lump sum of money in exchange for closing your workers’ compensation case forever. This means you will never be able to reopen your case and ask for any additional wage loss or medical benefits related to your work injury. This remains true even if your injury gets worse in the future.
Once you understand and agree to all of the terms in your C&R, you will sign the documents and they will be sent to the judge in advance of your hearing. In addition, your lawyer will prepare you for the hearing itself. In other words, your attorney will review some of the questions that will be asked of you during the hearing.
The C&R Hearing
The hearing to get your settlement approved is commonly called the “C&R Hearing.” At this hearing, the Workers’ Compensation Judge and the attorneys will ask you questions. The goal of the questions is to ensure that you:
- Understand the terms of the settlement;
- Are voluntarily agreeing to settle your case; and
- Understand the consequences your settlement will have on your future rights.
To be clear, the judge is not allowed to give you his or her opinion regarding the value of your case. The judge is also not allowed to tell you whether they believe the settlement is a good deal or a bad deal for either you or your employer. Instead, the judge is required to approve your settlement if they believe you meet the criteria explained above.
How long until I get my money after settling my workers’ compensation case in Pennsylvania?
Generally, it can take up to about 30 days to receive your settlement funds after the judge approves your Pennsylvania workers’ compensation settlement. If it takes longer than that, you will want to speak with your attorney. Your attorney may be able to take action to speed up the process. Thankfully, however, it typically only takes a couple of weeks for you to receive your settlement funds.
Do I have to pay tax on my workers’ compensation settlement funds in Pennsylvania?
In Pennsylvania, workers’ compensation benefits are exempt from taxes under state law and are not considered taxable income. According to the federal tax code, 26 U.S.Code §104(a)(1), and IRS Publication 525, page 18, these benefits are tax-free if they are received as compensation for occupational injuries or sickness under a workers’ compensation act or a similar statute.
The rationale behind this rule is that such settlements, awards, and benefits are not actual “income” but rather compensation for something lost. This aligns with the principle that taxes are applied only to profits, while expenses can be deducted. For example, when selling a house, taxes are assessed on the increase in value, excluding the initial cost that is recovered.
Similarly, workers’ compensation benefits serve to restore an injured worker to their pre-injury status, compensating them for their physical loss, rather than providing additional income.
Consult with your attorney throughout the settlement negotiation process
As you can see, there are a number of risks to consider throughout the workers’ compensation settlement negotiation process. Further, these risks change with the facts of each case and also can fluctuate depending on the petition(s) that are being litigated in court.
Importantly, there is no such thing as a Pennsylvania workers’ comp settlement chart. Anything you may find on the internet to that effect is incorrect at best, and misleading at worst. Instead, it is important to consult with an experienced workers’ compensation attorney throughout the settlement negotiation process. The risks you face will be different from every other injured worker in Pennsylvania.