Court Opinion

ID: 5175601
Source: CourtListenerOpinion
Date Created: 2022-01-03 14:09:46.574833+00
Date Added: 2024-06-11T08:26:16.326883
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Carbon Lehigh Intermediate Unit #21, :
                  Petitioner         :
                                     :
     v.                              : No. 750 C.D. 2021
                                     : ARGUED: December 13, 2021
Kimberly Waardal (Workers’           :
Compensation Appeal Board),          :
                  Respondent         :

BEFORE:       HONORABLE ANNE E. COVEY, Judge
              HONORABLE MICHAEL H. WOJCIK, Judge
              HONORABLE ELLEN CEISLER, Judge

OPINION BY JUDGE CEISLER                     FILED: January 3, 2022

       Carbon Lehigh Intermediate Unit # 21 (Employer) petitions this Court for
review of the July 6, 2021 order of the Workers’ Compensation Appeal Board
(Board) affirming the decision of a workers’ compensation judge (WCJ) who denied
Employer a credit against its payment of workers’ compensation benefits for Federal
Pandemic Unemployment Compensation (Pandemic Compensation) benefits
Kimberly Waardal (Claimant) received pursuant to Section 2104(b)(1) of the
Coronavirus Aid, Relief, and Economic Security (CARES) Act, 15 U.S.C. §
9023(b)(1).1 The sole issue raised on appeal is whether Pandemic Compensation
under the CARES Act constitutes unemployment compensation (UC) for which an

       1
        Section 2104 of the CARES Act pertinently provided that any state could enter into an
agreement with the United States Secretary of Labor (Labor Secretary) for the payment of
Pandemic Compensation in the amount of $600 per week.
employer may receive credit towards its payment of workers’ compensation under
Section 204(a) of the Workers’ Compensation Act (Act).2 After review, we affirm.

                                           I. Background
       Enacted on March 27, 2020, the CARES Act provided financial assistance to
individuals affected by the COVID-19 public health emergency declared by the
United States Secretary of Health and Human Services on January 27, 2020. Such
individuals included those who were unable or unavailable to work due to closure of
their “place of employment . . . as a direct result of the COVID-19 public health
emergency[.]”3 Section 2104(b)(1) of the CARES Act provided that, upon execution
of an agreement between a state and the Labor Secretary, individuals otherwise
entitled to receive UC benefits would be paid “regular compensation” in the amount
determined under state law, plus an additional amount for Pandemic Compensation.4
Per Section 2104(b)(2) of the CARES Act, Pandemic Compensation could be made
payable at the same time as, or separately from, any payment of “regular
compensation.”5 Individuals not otherwise eligible for “regular compensation,” such
as those who were self-employed, could receive Pandemic Unemployment

       2
         Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 71(a). Section 204(a) of the Act
relevantly provides that the amount of UC benefits received by an injured employee “shall be
credited against” any award of workers’ compensation benefits.

       3
           Section 2102(a)(3)(A)(ii)(I)(jj) of the CARES Act, 15 U.S.C. § 9021(a)(3)(A)(ii)(I)(jj).

       4
         For weeks of unemployment ending on or before July 31, 2020, eligible individuals could
receive $600 weekly Pandemic Compensation. 15 U.S.C. § 9023(b)(3)(A)(i). This amount was
reduced to $300 weekly for weeks of unemployment beginning after December 26, 2020, and
ending on or before September 6, 2021. 15 U.S.C. § 9023(b)(3)(A)(ii).

       5
           15 U.S.C. § 9023(b)(2).

                                                  2
Assistance under Section 2102 of the CARES Act, the total amount of which
included the Pandemic Compensation provided for in Section 2104(b)(3) of the
CARES Act. States are entitled to reimbursement by the federal government for
Pandemic Unemployment Assistance paid to eligible individuals under Section 2102
of the CARES Act and for the “total amount of [Pandemic Compensation]” paid,
plus administrative costs.6
      In the instant matter, the parties have not disputed the underlying facts. On
May 19, 2017, Claimant suffered a work-related injury during the course and scope
of her employment as a substitute teacher, for which Employer accepted liability
through issuance of a notice of compensation payable. Certified Record (C.R.), Item
No. 11, WCJ Decision, Finding of Fact (F.F.) Nos. 1, 3. At the time of her injury,
Claimant was concurrently employed as an in-home care attendant. F.F. No. 2.
After a period of total disability, Claimant returned to her pre-injury job for
Employer, with restrictions. F.F. No. 9. Claimant’s restrictions prevented her from
returning to her concurrent position as an in-home care attendant. Id. On February
25, 2020, Employer filed petitions to modify and suspend Claimant’s benefits on the
basis that she had returned to work. C.R., Item Nos. 2-3.
      After Claimant was laid off from her substitute teaching position on March
13, 2020, she filed a petition seeking reinstatement of her total disability benefits.
Id., Item No. 7. Thereafter, she began collecting weekly UC benefits, as well as the
additional Pandemic Compensation made available under Section 2104(b)(1)(B) of
the CARES Act. WCJ Decision, F.F. No. 11. In its response to Claimant’s
reinstatement petition, Employer sought a credit for benefits it paid to Claimant, or

      6
          See 15 U.S.C. §§ 9021(f)(2)(A), 9023(d)(1)(A).

                                               3
paid on Claimant’s behalf, to the extent permitted under the Act.7 C.R., Item No. 9.
In a September 1, 2020 decision, the WCJ granted Claimant’s reinstatement petition,
as she was unable to return to her concurrent employment due to her continued
disability and she was laid off from her position with Employer through no fault of
her own. WCJ Decision at 5. While the WCJ agreed Employer was due a credit for
the UC benefits Claimant received, the WCJ disagreed that Employer was entitled
to a similar offset for the Pandemic Compensation she received under the CARES
Act. Id. The WCJ noted that the $600 weekly Pandemic Compensation was
unrelated to the amount of a recipient’s wages. Id. Furthermore, as Pandemic
Compensation was intended to act as a “general economic stimulus in response to
the [COVID-19] pandemic,” the WCJ felt that converting those funds into a credit
for Employer would “largely defeat the purpose of the CARES Act.” Id. The WCJ
directed that Employer resume its payment of total disability benefits upon
exhaustion of its credit for Claimant’s UC benefits.
       Employer appealed to the Board solely on the issue of its entitlement to a
credit for Claimant’s receipt of Pandemic Compensation under the CARES Act.
C.R., Item No. 12. Claimant appealed the WCJ’s decision on the basis that, despite
having succeeded in her reinstatement petition, the WCJ failed to award litigation
costs.8 Id., Item No. 14. In an April 15, 2021 decision, the Board remanded the
matter to the WCJ on the issue of costs but affirmed the WCJ in all other respects.
Id., Item No. 16, Board Decision at 9. Citing this Court’s decision in Dietrich

       7
           Employer also sought supersedeas, which the WCJ granted in a May 13, 2020
interlocutory decision because the amount of Claimant’s UC benefits exceeded the amount of total
disability benefits due. C.R., Item Nos. 9-10.

       8
         Section 440(a) of the Act, added by the Act of February 8, 1972, P.L. 25, provides that a
successful claimant shall be awarded a reasonable sum for costs. 77 P.S. § 996(a).

                                                4
Industries, Inc. v. Workers’ Compensation Appeal Board (Shank), 725 A.2d 252 (Pa.
Cmwlth. 1999), in which we disallowed a credit under Section 204(a) for federally
funded trade readjustment allowance (TRA) benefits a claimant received under the
Trade Act of 1974 (Trade Act),9 the Board agreed that Employer was not entitled to
a credit for Claimant’s federally funded Pandemic Compensation. Board Decision
at 4-6. One member of the Board dissented, opining that Pandemic Compensation
was a UC benefit subject to a credit under the plain language of Section 204(a) of
the Act. Id. at 9.
       Following remand,10 the WCJ issued a second decision in which he noted that
the parties had resolved the sole issue regarding litigation costs and that “[t]he
immediate appeal to the Commonwealth Court concerning” Employer’s right to a
credit for Claimant’s Pandemic Compensation “would materially advance the
litigation.” C.R., Item No. 18. Employer appealed to the Board, reiterating its prior
contention that the WCJ erred in failing to give Employer a credit in the amount of
Claimant’s Pandemic Compensation. Id., Item No. 19. The Board affirmed the WCJ
and made final its prior order dated April 15, 2021. Id., Item No. 21. This appeal
followed.11

       9
       19 U.S.C. §§ 2101 - 2497b. Pertinently, the Trade Act established a program to assist
American workers adversely affected by an increase in imports.

       10
          A May 7, 2021 petition for review filed by Employer in response to the Board’s April
15, 2021 remand order was quashed by this Court on the basis that the April 15, 2021 order was
interlocutory and not immediately appealable. See Carbon Lehigh Intermediate Unit # 21 v.
Waardal (Workers’ Comp. Appeal Bd.) (Pa. Cmwlth., No. 488 C.D. 2021, filed July 6, 2021).

       11
           Our review of workers’ compensation matters is limited to determining whether a
constitutional violation or error of law has occurred and whether findings of fact are supported by
substantial evidence. Cruz v. Workers’ Comp. Appeal Bd. (Kennett Square Specialties), 99 A.3d
(Footnote continued on next page…)

                                                5
       The sole issue before this Court is whether Pandemic Compensation under the
CARES Act is equivalent to UC benefits for which Employer is entitled toa credit
under Section 204(a) of the Act.

                                             II. Discussion
       Section 204(a) of the Act provides that, where an employee receiving
workers’ compensation benefits is also receiving UC benefits, the employer paying
workers’ compensation benefits is entitled to a credit in the amount of UC benefits
received. 77 P.S. § 71(a). Section 204(a) also entitles an employer to a credit for
50% of a claimant’s “old age” Social Security benefits12 and for severance and
pension payments made to a claimant, to the extent such payments are funded by the
employer directly responsible for paying workers’ compensation. Id.
       In Shank, the precedent relied upon by the Board, the claimant, Glenn Shank
(Shank) received sickness and accident benefits following a lower back injury he
sustained during the course and scope of his employment, along with UC benefits
and TRA benefits, which “were intended to supplement state unemployment
insurance benefits.” Shank, 725 A.2d at 253. Shank’s receipt of TRA benefits was
subject to various statutory requirements, including exhaustion of his entitlement to
“unemployment insurance benefits.”13 Id. Shank and his employer reached an
agreement for the payment of workers’ compensation on January 21, 1997, after
which Shank’s employer sought a credit against its workers’ compensation

397, 405-06 (Pa. 2014). When the issue under review is a question of law, our standard of review
is de novo, and our scope of review is plenary. Id.

       12
          See 42 U.S.C. § 402. The employer’s credit does not apply to old age Social Security
benefits paid prior to the compensable injury. 77 P.S. § 71(a).

       13
            See 19 U.S.C. § 2291(a)(3)(b).

                                                 6
obligation in the amount of Shank’s UC and TRA benefits. A WCJ granted the
credit for Shank’s sickness and accident and UC benefits but disallowed a credit for
his TRA benefits. Shank’s employer appealed to the Board, which affirmed the
WCJ.
       In analyzing the employer’s right to a credit under Section 204(a), we
recognized that TRA benefits, which were intended to supplement UC benefits, were
funded entirely by the federal government, as was the cost of administering the TRA
program. Shank’s employer argued that the funding source for Shank’s TRA
benefits was irrelevant, as Section 204(a) made no such distinction when mandating
a credit for a claimant’s receipt of UC benefits. We disagreed, noting that an
employer’s credit against its obligation to pay workers’ compensation stems from
its payment of “regular stated amounts, out of its own general funds or from sick
or accident benefits,” which do not constitute “wages or salary for work performed,
but [which are paid] in relief of the employee’s incapacity to work.” Id. at 254
(emphasis in original) (internal citations omitted). Further, we noted that TRA
benefits were not among the types of payments delineated in Section 204(a) from
which an employer could seek a credit towards its workers’ compensation
obligation, and we recognized that, where certain items are specifically designated
in a statute, omissions are understood to be excluded. Having concluded that TRA
benefits were “distinct from the type of benefits contemplated” under Section 204(a)
of the Act, we affirmed the Board. Id.
       Instantly, in support of its right to a credit for Claimant’s receipt of Pandemic
Compensation, Employer essentially resurrects the argument we rejected in Shank –
that Section 204(a) makes no distinction as to the funding source of a claimant’s UC
benefits. Employer suggests that this omission stems from the fact that UC benefits

                                           7
are funded by multiple employers and, therefore, such benefits do not come from
one specific employer, but rather from a larger pool of funds. Employer suggests
that one could “theoretically” calculate the precise proportion of an employee’s UC
benefits that are attributable to her employer’s contributions. Employer Br. at 19.
The General Assembly chose not to require such a calculation, however, and instead
rendered any benefits designated as “unemployment compensation” subject to the
credit provisions in Section 204(a). Employer distinguishes our holding in Shank on
the basis that the TRA benefits considered in Shank were subject to different criteria,
including the exhaustion of unemployment insurance benefits.
      Employer also relies on Costa v. Workers’ Compensation Appeal Board
(Carlisle Corp.), 958 A.2d 596 (Pa. Cmwlth. 2008), which concerned whether a
claimant’s workers’ compensation award must be reduced by the amount of his UC
benefits, regardless of whether his employer had requested such an offset.
Employer’s reliance on Costa largely stems from a footnote, in which we stated that
an employer was not required to prove which portion of a claimant’s UC was funded
by the employer, “as opposed to employees through their payroll taxes or the federal
government.” Id. at 601 n.7. The footnote also recognized the difference between
an employer’s right to a credit for the total amount of UC paid to a claimant and its
right to a credit for a claimant’s receipt of pension benefits, the latter of which is
limited to the amount of pension benefits that were funded by the employer. Id.
While instructive, the Costa footnote merely recognizes that an employer may only
seek a pension credit to the extent it funded the pension. It does not stand for the
proposition that Employer has an unfettered right to a credit for Claimant’s receipt
of Pandemic Compensation.

                                          8
      We are similarly unpersuaded by Employer’s attempts to distinguish this
matter from our holding in Shank. It is noteworthy that Pandemic Compensation is
available to individuals who are not otherwise eligible to receive “regular” UC
benefits, and the CARES Act provides for federal reimbursement of the amounts
paid by a state for Pandemic Compensation. Furthermore, Pandemic Compensation
is referenced separately from “regular compensation” throughout the relevant
provisions of the CARES Act. These distinctions render Pandemic Compensation
sufficiently “distinct from the type of benefits contemplated” under Section 204(a)
of the Act. Shank, 725 A.2d at 254. We recognize that Section 204(a), which was
last amended in 1996, did not contemplate the benefits at issue here. It is clear,
however, that the General Assembly has not seen fit to amend Section 204(a) in the
two decades following our decision in Shank to specify that the credit provisions of
Section 204(a) of the Act encompass the types of federally funded benefits at issue
in Shank and the instant matter.
      Ultimately, the legislative intent behind Section 204(a) is to prevent an
employer from having to pay “duplicate benefits for the same loss of earnings[.]”
(emphasis added) (internal citations omitted). Allegheny Ludlum Corp. v. Workers’
Comp. Appeal Bd. (Bascovsky), 977 A.2d 61, 67 (Pa. Cmwlth. 2009). Disallowing
a credit for Pandemic Compensation that is wholly paid for by another entity does
no disservice to the overall purpose of Section 204(a), nor does it place Employer in
the position of “paying duplicate benefits for the same loss of earnings.” Indeed, a
contrary decision would result in disparate treatment between two distinct groups of
unemployed individuals – those who are permitted to collect Pandemic
Compensation by virtue of having lost their jobs, and those who may not because
they are burdened with an injury in addition to unemployment.

                                         9
For these reasons, we affirm the Board.

                               __________________________________
                               ELLEN CEISLER, Judge

                                 10
         IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Carbon Lehigh Intermediate Unit #21, :
                  Petitioner         :
                                     :
     v.                              : No. 750 C.D. 2021
                                     :
Kimberly Waardal (Workers’           :
Compensation Appeal Board),          :
                  Respondent         :

                                 ORDER

     AND NOW, this 3rd day of January 2022, the July 6, 2021 order of the
Workers’ Compensation Appeal Board is hereby AFFIRMED.

                                   __________________________________
                                   ELLEN CEISLER, Judge