The Pennsylvania Supreme Court recently issued a crucial decision in the case of Jackiw v. Soft Pretzel Franchise (January 22, 2025) that changes how benefits are calculated for specific loss claims under Pennsylvania Workers' Compensation law.  

Workers' compensation benefits in Pennsylvania generally fall into distinct categories depending on the type and extent of an injury.  Two of the most common categories are temporary total disability benefits and specific loss benefits.  Temporary total disability benefits are what most people think of when they hear about workers’ compensation.  These benefits replace lost wages for workers who are unable to work because of an injury.  They are typically calculated as two- thirds of the worker’s average weekly wage, subject to a minimum and maximum set by state law.

Specific loss benefits, on the other hand, are a bit different.  These benefits apply when a worker loses a specific body part, like a hand, leg, or foot, or loses the use of a body part permanently.  Instead of being tied to how much time the worker is unable to work, these benefits are based on a fixed schedule of compensation in the Workers' Compensation Act.  For example, the law says that losing a forearm entitles a worker to 370 weeks of benefits, plus up to 20 weeks for a healing period, regardless of whether the worker can still work or not.  This fixed schedule reflects the recognition that such permanent losses deserve compensation even if the worker can continue earning a living.

The question in the Jackiw case was how to calculate the weekly amount for specific loss benefits.  The worker in this case, Ms. Jackiw, lost her right forearm in a work-related accident.  Everyone agreed that this was a specific loss injury, and she was entitled to 390 weeks of benefits (370 weeks for the loss and 20 weeks for healing).  The disagreement arose over how to determine her weekly benefit amount.  Ms. Jackiw argued that her weekly benefit should be calculated using the rules for specific loss benefits in the Workers' Compensation Act, which would give her a higher weekly payment.  Her employer argued that the benefits should be calculated like temporary total disability benefits, which would result in a lower weekly payment.

The Supreme Court sided with Ms. Jackiw.  The Court explained that specific loss benefits have their own set of rules for calculating weekly payments, and these rules are separate from the ones used for temporary total disability benefits.  According to the Court, specific loss benefits are meant to compensate workers for the permanent nature of their injuries, and the calculation should reflect that.  This means that in some cases, like Ms. Jackiw’s, the weekly benefit for a specific loss injury could be higher than what the worker earned before the injury.  In Ms. Jackiw’s case, her average weekly wage before the injury was $322.05, but under the specific loss calculation, her weekly benefit was $540.50.  This amount is based on the law’s requirement that specific loss benefits must not be less than 50% of the Statewide Average Weekly Wage (SAWW), which at the time was $1,081 so the minimum benefit she is entitled to receive under the law is $540.50.  If her benefit had been calculated under the total disability wage loss formula, it would have fallen under 90% of the average weekly wage calculation, as provided in Section 306(a).  Since 90% of her average weekly wage of $322.05 equals approximately $289.85, this would have been the amount she received under the total disability formula. This demonstrates the significant difference in benefit calculations between specific loss and total disability claims.

This decision reinforces the distinction between temporary total disability benefits and specific loss benefits. It highlights the idea that specific loss injuries are unique and deserve a separate calculation that considers the severity and permanence of the injury.  For those managing workers' compensation claims, this decision serves as a reminder to carefully consider how specific loss benefits are calculated and to ensure compliance with the law as clarified by the Supreme Court.

If you have any questions about this case, please contact A.J. Palutis, Esq. at apalutis@c-wlaw.com or (717) 390-3020.

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The information in this article is provided for general informational purposes only and may not reflect the current law in your jurisdiction.  By reading this article, you understand that there is no attorney-client relationship between you and Cipriani & Werner, P.C. or any of our attorneys.  No information contained in this article should be construed as legal advice from Cipriani & Werner, P.C. or the individual authors.