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Payment of Wage Loss Benefits and Acceptance of Your Claim

In a previous article we discussed how an employer can “rent” a claim by temporarily paying medical benefits to the injured worker. The payment of those medical benefits does not mean that the Employer is accepting your injury as compensable under the Pennsylvania Workers’ Compensation law. Wage loss benefits are treated differently. If an insurance company makes a wage loss benefit payment or if an employer makes a payroll payment in lieu of the insurance company recognizing the claim and paying benefits this can act as a de facto Notice of Compensation Payable. In other words, even if the Employer tries to deny payment of benefits later, the fact that they paid wage loss benefits may protect your workers’ compensation claim and your right to future benefits.

Payments in lieu of compensation are any voluntary or informal compensation, apart from those provided for in the Workers’ Compensation Act, paid with the intent to compensate for a work-related injury. NUS Corporation v. WCAB (Garrison), 547 A.2d 806 (Pa. Cmwlth. 1988). It is the intent of the payment, not the receipt thereof, which is relevant. Id. Therefore, if a payroll check is issued following a work injury out of course, for instance a salaried employee gets a check due to accounting not being notified of the injury and missed time, it may not be an acceptance of the work injury. However, if a workers’ compensation carrier issues a wage loss check or an employer issues a payroll check fully aware that the missed time was for a work-related injury it did not to report to its carrier, the injury then should become officially accepted.

In Mosgo v. WCAB (Tri-Area Beverage, Inc.), 480 A.2d 1285 (Pa. Cmwlth. 1984), an employer made compensation payments to an injured employee, but claimed to reserve the right to discontinue payments pursuant to the results of its investigation of the injury. The employer in Mosgo failed to file a Notice of Workmen’s Compensation Denial within twenty-one days after notice of the employee’s disability (wage loss). The Commonwealth Court then held the following:

[the employer] may not profit by [its] delinquency in failing to carry out the mandates of Sections 406.1 and 407, [it is] estopped to disavow [its] acceptance of liability and must, therefore, be held bound by agreement to pay compensation with the same legal effect as would apply if [it] had formally complied with the Act and the applicable Rules and Regulations of the Department….

Id., 480 A.2d at 1289. This case law was later reaffirmed in Kelly v. WCAB (DePalma Roofing and SWIF), 669 A.2d 1023 (Pa. Cmwlth. 1996).

As is evident from the above, it is vital that a work-related injury be formally recognized by the Bureau of Workers’ Compensation and the injured worker be protected from the negative ramifications that flow from the work injury. The law allows an insurance company to “rent” a claim by paying medical benefits which usually lulls the injured worker into a false sense of security. If your claim has not been formally recognized, or is improperly recognized, you should contact an experienced Pennsylvania workers’ compensation attorney immediately to know your rights.

Ira H. Weinstock, P.C. is located in Harrisburg, PA and serves clients in and around Southeast Pennsylvania. Contact our experienced Harrisburg attorneys today, we can travel if necessary.

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