Commonwealth Court Determines IOD Benefits Do Not Amount to Constructive Compliance
The Commonwealth Court determined that an employer was in violation of the Pennsylvania Workers' Compensation Act by failing to pay benefits on a workers' compensation judge's order that granted benefits. In City of Philadelphia v. WCAB (Sherlock), the claimant was injured while on duty and filed a claim petition seeking workers' compensation benefits. The claimant's employer did not respond to the petition, and the workers' compensation judge awarded the claimant's benefits. The employer did not file an appeal against the order, but failed to pay any workers' compensation benefits. The claimant then filed a penalty petition against the employer, alleging that the employer violated the Pennsylvania Workers' Compensation Act (the Act) by refusing to pay the workers' compensation benefits awarded by the workers' compensation judge. The employer aruged that it had complied with the order because they paid the claimant Injured On Duty (IOD) benefits based on the claimant's special civil service agreement. The workers' compensation judge sided with the employer and denied the claimant's penalty petition.
The claimant then appealed to the Workers' Compensation Appeal Board (WCAB) where the decision was reversed. The WCAB stated that 1) the claimant's IOD benefits did not amount to compliance with the judge's order and 2) there was no dispute that the employer failed to pay any workers' compensation benefits pursuant to the first judge's order, and this was a clear violation of the Act. The case was remanded back to a workers' compensation judge for further findings limited only to the issue of whether penalties, litigation expenses, and attorney fees should be assessed against the employer for violation of the Act.
On remand, the workers' compensation judge decided that by refusing to pay workers' compensation benefits, the employer was in violation of the act. The judge found further that the employer's continuing refusal to pay benefits was "unreasonable and amounted to excessive delay, entitling the claimant to an increased penalty." The judge awarded the claimant's penalty petition and assessed a fifty-percent penalty against the employer. The WCAB affirmed this decision stating that the IOD benefits did not amount to constructive compliance with the order, and the Court felt that the fifty-percent penalty was appropriate for the employer's ignorance of the judge's order to pay workers' compensation benefits.
