Pa. Supreme Court – No Workers’ Comp Credit for Furlough

On April 9, 2010, in Kelly v. Workers’ Compensation Appeal Board (US Airways Group, Inc.), the Pennsylvania Supreme Court ruled that a furlough allowance is not a “severance benefit” under Section 204(a) of the Pennsylvania Workers’ Compensation Act, 77 P.S. § 71. Consequently, the Supreme Court – in a unanimous decision by Justice Baer – ruled that the employer was not entitled to a credit against the workers’ compensation payments for the furlough allowance it simultaneously paid to Claimant. The Court noted that, crucial to its analysis was the fact that the furlough allowance, like sick or vacation leave, is something to which the Claimant would have been entitled regardless whether he had been injured. Therefore, an employer of an employee injured at work cannot pay for the resulting disability with the employee’s sick or vacation pay; similarly, an employer cannot force the employee to bear the costs of his work-related injury by exhausting his accrued furlough allowance. This is a logical decision that is based squarely upon a straight analysis of the Pennsylvania Workers’ Compensation Act and the enabling regulations. Congratulations to attorney Larry Chaban for his success.

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