Next week, the Pennsylvania House of Representatives is expected to consider H.B. 930, legislation that would significantly hike workers’ compensation costs on employers.
Specifically, H.B. 930 amends a section of Pennsylvania’s Workers’ Compensation Act that deals with permanent injuries or disfigurement, informally known as the “scar benefit.”
Under workers’ compensation law, employers are responsible for paying medical costs and wage-loss benefits for individuals who are injured on the job, regardless of fault. Current law also provides for additional benefits for various reasons, including if an injury results in a scar on the head, neck or face that produces an “unsightly appearance.”
House Bill 930 would expand the scar benefit far beyond its original purpose, an action that would unquestionably lead to higher insurance and related costs for Pennsylvania businesses. As the PA Chamber outlined in a memo to House Labor and Industry Committee lawmakers last week, this bill:
- Expands the benefit to apply to any scar located anywhere on the body.
- Increases the maximum benefit – which already increases every year – by nearly 50 percent to over $509,000; and
- Discourages return to work by paying temporary wage and scar benefits simultaneously.
The provisions of this bill may also incentivize unscrupulous attorneys representing claimants to pressure their clients into undergoing surgery (even if a less invasive course of treatment if preferable) in order to receive the additional scar benefit, of which the attorney receive a percentage.
Consider this example: John Smith is employed as a line cook at ABC Restaurant. While on the job, John mistakenly brushes up against a hot surface, lightly burning his forearm.
Under the present system, ABC Restaurant pays for any medical costs as well as wage-loss benefits equal to roughly two-thirds of his average wage if John has to miss work.
However, under H.B. 930, ABC Restaurant could be on the hook for tens or even hundreds of thousands of dollars in additional benefits, as well as higher litigation costs. John may also be encouraged by his attorney to stay out of work as long as possible since he can receive both wage and scar benefits simultaneously, possibly pushing his benefits beyond the amount he earns in wages.
The workers compensation system is intended to fairly compensate injured workers while helping employers avoid catastrophic costs. However, H.B. 930 would unfairly disrupt this balance, to the detriment of employers and especially small businesses already strained by persistent inflation, supply chain disruptions, workforce shortages and an uncertain economic outlook.