Employer Insights

Pennsylvania Workers' Compensation - The Complete Guide for 2024

by Katie Westenberger, on Jan 22, 2024 2:00:14 PM

In Pennsylvania, employers must have a policy and be covered by workers’ compensation insurance. Here is everything employers in Pennsylvania need to understand in order to maintain compliance with state workers’ compensation laws.

Pennsylvania workers’ compensation is an insurance system that protects both Pennsylvania employers and employees in the event of on-the-job injuries or illness. Employees will be covered for costs related to workplace injuries and illness. In the meantime, employers are protected from potential lawsuits related to workplace incidents.

Pennsylvania employers are required to provide employees with workers’ compensation coverage, regardless of whether they are full-time, part-time, or seasonal employees.

Pennsylvania Workers’ Compensation Overview

Pennsylvania Workers’ Compensation Law was first enacted in 1915 and defines employers' obligation to provide workers’ compensation coverage and specifies compensation for employees who are injured as a result of employment without regard to fault. According to this law, Pennsylvania employers are required to purchase workers’ compensation insurance from an authorized carrier or otherwise self-insure.

Which Employees are Entitled to Workers’ Compensation Insurance in Pennsylvania

Employers must provide workers’ compensation starting on the first day of employment for all of their employees including full-time, part-time, and seasonal workers, with a few exceptions. 

Employees that fall into the following categories are not covered by Pennsylvania workers’ compensation:

  • Volunteer workers
  • Railroad workers
  • Longshoremen
  • Federal government employees
  • Most domestic workers
  • Casual workers whose employment is casual in character and not in the regular course of the business of the employer
  • Agricultural workers who work less than 30 days or earn less than $1,200 in a year
  • Workers who have exemptions based on religious beliefs or executive status within a corporation
  • Self-employed individuals - also known as sole proprietors - are not required to have workers’ compensation coverage. However, they can still choose to get coverage for themselves
  • LLCs where only the employees are members of the LLC
  • Executive officers who have been granted exclusion by the Department of Labor & Industry
  • Certain licensed real estate salespersons or associate real estate brokers

Pennsylvania Workers’ Compensation Reporting Process

Employees who suffer from any work-related injury or illness should notify their employer within 120 days of the date it occurs in order to receive benefits. Employees will then receive the workers’ compensation paperwork from their employer and must fill it out, then send it back to their employer. 

Once the paperwork from the injured employee is received, the employer will contact their insurance carrier to officially file a workers’ compensation claim. The insurance adjuster assigned to the claim will then review all the available evidence to either approve or deny the claim.

Within 21 days of the injury being reported, the employee will find out if their claim has been approved or denied.

If liability for the injury has been denied the employer must issue a Notice of Workers’ Compensation Denial (LIBC-496) to the injured employee. Once denied, the injured employee may seek legal advice to pursue a claim through the litigation system.

If liability for the injury has been accepted within 21 days of the injury being reported, a Notice of Compensation Payable (LIBC-495) will be issued to the injured employee. Further, once the Notice of Compensation Payable has been received, the appropriate EDI transaction and Statement of Wages must be filed with the Bureau of Workers’ Compensation by the employer.

Once the employer has accepted liability, an Agreement for Compensation (LIBC-336) will be issued to the injured employee as well.

Pennsylvania Workers’ Compensation Benefits

In the event of work-related injury or illness, employees are eligible to file a workers’ compensation claim and receive the following benefits:

  • Compensation for lost wages caused by missing work
  • Reimbursement for costs related to emergency and ongoing medical treatment, such treatments can include but are not limited to:
    • Doctors visits
    • Surgeries
    • Treatments
    • Prescriptions
    • Hospital expenses
  • Death benefits when the employee dies as a result of a work-related injury or illness (paid to the dependent(s) of the employee)
  • In the case of loss of the permanent use of all or part of the employee’s thumb, finger, hand, arm, leg, foot, sight, hearing, or serious and permanent disfigurement on their head, face, or neck, then the employee may be entitled to Specific Loss Benefits

Pennsylvania Workers’ Compensation Rates for 2024

Payments for lost wages are equal to approximately two-thirds of the employee’s average weekly wage, up to a weekly maximum of $1,325.00. Additionally, 50 percent of workers’ compensation wage-loss benefits can be offset if an employee is receiving Social Security (old age) benefits, severance pay, unemployment compensation, or the employer-paid portion of a retirement pension. Please take note that the given law does not allow for a cost-of-living increase.

The wage loss benefits will be payable on the eighth day after injury. Once the employee has missed 14 days of work, the employee will receive retroactive payment for the first seven days.

The employee will receive the payment regularly until the employee returns to work at a wage level that equals to or more than their earnings level prior to the injury and provides a notice to the employer or insurer.

Pennsylvania Workers’ Compensation Posting Requirements

Employers must post a workers’ compensation notice in an easily accessible place with the name, address, and telephone number of the insurer or other appropriate parties to address regarding workers’ compensation claims or to request information.

Penalties of Non-Compliance for PA Workers’ Comp

Employers in Pennsylvania that are required to provide workers’ comp coverage will be subject to penalties when they fail to meet compliance requirements.

Penalties include:

  • Responsibility for reimbursing all costs, interests, penalties, and fees that were paid by the Uninsured Employers Guaranty Fund in relation to the claim.
    • For uninsured employers
  • Face civil and criminal risks for failing to maintain continuous workers’ compensation coverage.

Misdemeanor convictions can result in a $2,500 fine and up to one year in prison. Felony convictions can result in a $15,000 fine and up to seven years in prison.

Uninsured Employers Guaranty Fund

If for whatever reason an employer is not insured, injured employees may file a claim with the Uninsured Employers Guaranty Fund.

Workers’ Compensation Audits

In the state of Pennsylvania, workers’ compensation insurance premiums are based on estimated calculations of factors such as total payroll, class distribution of that payroll, business risk, employee classifications, and more. Whether your business has self-insured workers’ compensation insurance or insurance from the State Worker’ Insurance Fun (SWIF), you will be audited annually. Audits also take place when you cancel your workers’ compensation policy.

To ensure that the auditing process is as accurate as possible, it is important to have the proper records on hand.

Records Needed for Workers’ Compensation Audits in Pennsylvania

When preparing for a workers’ compensation audit in Pennsylvania, it is important to have the following documentation ready:

  • Tax Reports
  • Payroll Records
  • Profit and Loss Statements (Expense Section)
  • Cash Disbursement Journal
  • General Ledger
  • Check Register (Check Stubs)
  • Certificates of Insurance
  • Corporate Minutes (If applicable)

Protect Your Employees & Safeguard Your Business

Running a business in Pennsylvania is not an easy job. Employers will need to ensure compliance all around and protect both their employees and the business from potential compliance risks related to workers’ comp.

Get started by consulting a Pennsylvania HR service provider and get the workers’ compensation insurance that suits your needs and safeguards your business.

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Topics:Pennsylvania Labor Laws

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