Areas of Law > Workers' Compensation

Common Workers' Compensation Terms

Act 1

Passed in 1995, this law completely changed the hearing loss portion of the compensation act, establishing a percentage standard for hearing loss.

Act 44

Passed on August 31, 1993, Act 44 primarily concerned the payment of medical bills. It placed “caps” on the amounts doctors can charge for treatment rendered to compensation claimants. The caps are tied to Medicare reimbursement rates. Prescription costs are limited to 113% of the wholesale price of the drug. When a company pays a bill at the Act 44 rate, the doctor CANNOT hold the claimant responsible for the balance of the amount originally charged. Act 44 also established utilization review as a method for reviewing the reasonableness or necessity of medical treatment.

Act 57

Passed June 24, 1996, this law made sweeping changes to most of the worker’s compensation law. Some of Act 57 applies to all injuries. However, some of the more severe and damaging sections only apply to injuries which occurred on or after June 24, 1996. This includes certain offsets to compensation and changes in procedures for proving job availability. Therefore, different laws apply to different claimants depending on whether the injury occurred before or after June 24, 1996. Act 57 also established percentage evaluations to determine a claimant’s status as totally or partially disabled.

Act 109

This legislation makes overdue child support, or arrearages, a lien against workers’ compensation benefits, particularly settlement proceeds. In any litigated compensation case, each individual claimant must submit an affidavit verifying the non-existence of, or existence and amount of, support arrearages. In any case where payment is made to a claimant with support arrearages, arrangements must be made with the appropriate agency to address these arrears before disposition of the proceeds of the settlement or award of benefits will be permitted.

Act 147

Signed into law on November 9, 2006, this legislation primary governs the way that litigation of cases is handled, and attempts to make the workers’ compensation system move more quickly. One of the changes made was that mandatory mediation will now be involved in every case. A special “resolution court” was also initiated, so that individuals whose cases are settled can have a quick C&R hearing, rather than waiting for the case to be assigned through the normal course. Also, an Uninsured Employer’s Guaranty Fund was instituted, whereby individuals who are injured while working for a business without compensation insurance can receive wage loss benefits and medical bill payment.


Any work-related event or exposure that makes a pre-existing condition worse is an aggravation. Under the law, an aggravation of a pre-existing condition is a NEW and work-related injury.

Agreement For Compensation

Same as an NCP. This means that the employer/insurer has accepted the claim as compensable. The only difference is that both parties sign this form.

Average Weekly Wage (AWW)

When an employee is injured, his/her average weekly wage is calculated based on all wages received in the one year prior to the date of injury. The law has several different formulas for computing the average weekly wage. Once the AWW is determined, it is fixed for that injury. It is not ever increased, even if the claimant’s regular job gets a raise after the injury occurs. There are no cost of living raises in workers’ compensation benefits.


The Bureau of Workers’ Compensation is located in Harrisburg and is part of the Pennsylvania Department of Labor and Industry. The Bureau oversees and administers the workers’ compensation law.

Company Doctor List

The Workers’ Compensation Act allows (but does not require) an employer to prepare a list of designated physicians to care for injured employees after a work injury. There must be at least 6 medical providers on the list. The injured employee must treat with one or more of the 6 listed providers for 90 days from the date of the first doctor’s visit. (An employee may see his/her own doctor during the 90 days, but the company/insurer will NEVER have to pay the bill). The company cannot require any employee to treat with one specific doctor on the list. The employee may choose to see all 6 of these doctors during the first 90 days if he/she so desires. NO permission is needed from the company to switch among the listed doctors. If a listed doctor refers the claimant to another doctor who is not on the list, the referral doctor’s bills will also be paid.

Compensation Rate

The injured employee’s compensation rate is the amount of his/her weekly compensation checks. The rate is generally 2/3 of the claimant’s AWW, up to a state-wide maximum rate. The maximum rate changes every year. The benefit rate for the injury remains the same, no matter how long the injured employee remains on compensation. There are no cost of living raises or any raises of any kind. The AWW and compensation rate are fixed on the date of injury.

Compromise And Release (C&R)

Compromise and Release as mechanism by which compensation cases are settled. It is possible to completely settle a case including both wage loss and medical benefits. A case can be settled by a Compromise and Release whether the medical is settled or not. This is a matter of negotiation between the parties.

Course And Scope Of Employment

In order to be covered for compensation purposes, a claimant must be in the course of his/her employment when injured. This includes time spent on the employers’ premises and reasonable times before and after work (this gives coverage in the employer’s parking lot, etc.). An employee who is on a special mission off the employer’s premises may also be covered. The rules of coverage are much more liberal for traveling employees. An employee who is injured while in furtherance of the employer’s business, even if off premises, may also be covered. If there is any doubt, the case should be investigated for coverage.


Compensation is available for scars from work-related injuries. Scars are a specific loss and are compensated without regard to any wage loss or lost time for the injury. Scars are compensable on the face or neck only (including surgical scars on the front or back of the neck). Compensation for scars ranges from 2 weeks (paid at the employee’s compensation rate per week) to 275 weeks. The scar must be permanent, unsightly and disfiguring to be compensable; most scars are considered to be disfiguring and most are considered to be permanent after 6 months or more.

Earning Power

Disability under the Pennsylvania workers’ compensation law is defined in terms of loss of earning power. If the claimant is off work, he/she has no earning power and is disabled. If the injured employee is working but making less money, then he/she has suffered a partial loss of earning power and is partially disabled. Partial disability is measured based on whether the injured claimant has the capacity to earn wages at some level of work, regardless of whether he/she has actually been hired for any job. (See Labor Market Surveys).

Final Receipt

When an injured employee returns to work with no wage loss, the employer/insurer may ask him/her to sign a final receipt. This means that the claimant is fully recovered from his/her injury. Ordinarily, unless the claimant is sure that he/she is fully recovered, these forms should NOT be signed. If a claimant does sign a final receipt, he/she has 3 years to file to set aside the final receipt. Even if a final receipt is signed, medical bills should continue to be paid for three years.


Act 57 added fraud provisions to the workers’ compensation law. If a claimant is found to be collecting compensation when he/she is not entitled to it, the employer or insurer may file fraud charges (criminal charges) against the claimant. There are also fraud provisions which apply to insurance companies.

Good Faith

The workers’ compensation law puts a duty of acting in good faith on all parties. However, it is claimants who are most often accused of bad faith in failing to follow-up with recommended medical care or in failing to apply for jobs in good faith. A finding of bad faith behavior could result in a suspension of the claimant’s compensation payments.

Impairment Rating Evaluation (IRE)

A new type of medical exam established by Act 57. Once an injured worker has been on total disability compensation for 2 years, the insurance company can request an impairment rating exam by a physician agreed to by the parties or selected by the Bureau. The doctor will examine the claimant and arrive at a percentage of disability (using only the disability from the work injury). If the claimant is less than 50% disabled (which will be most cases), disability is automatically converted from total to partial disability (with a maximum length of 500 weeks). This conversion happens even though the claimant’s condition has not changed and he/she has not returned to any type of work. This does not result in a change in benefit amount, but affects the duration of benefits (see partial disability).

Independent Medical Examination (IME)

This is a medical examination scheduled by the employer or insurer. The employer or insurer is entitled to have a compensation claimant examined twice per year. The company must pay for the evaluation and can select a doctor of its choice.


Any injury or disease suffered by an employee related to work, regardless of the employee’s previous physical condition. This includes any injury or diseases that aggravates, accelerates, or reactivates a pre-existing condition.

Insurer/Third Party Administrator

In Pennsylvania, an employer can purchase workers’ compensation insurance through an insurance company. In the alternative, an employer can choose to be self-insured. A self-insured employer may choose to administer its compensation program on its own or it may choose to hire a company to administer the program for it (third party administrator). The administrator merely does the day-to-day work of the program. All decisions and all of the money come from the self-insured employer. The Bureau has strict rules on the financial security of self-insured employers.

Job Development

This was the way vocational consultants assisted employers/insurers to get claimants off total compensation pre-Act 57. In the job development process, the vocational rehabilitation person finds actual jobs within the claimant’s ability to work (sedentary, light, etc.) and sends the injured workers to apply for the jobs. The injured worker stays on total compensation unless and until he/she is actually hired for a modified duty job. Only then are benefits converted from total disability to partial disability. If the employer/insurer could prove the employee acted in bad faith to sabotage the job development process, they could file a petition and ask for a suspension of benefits based on claimant’s bad faith. This method of job development and placement applies only to injuries which occurred before 6/24/96. Act 57 completely changed these sections of the workers’ compensation law.

Labor Market Survey

This is the new method employers or insurers use to try to get an injured claimant off total disability compensation. First, the employer/insurer will find an IME doctor who will release the injured claimant for some level of work (sedentary, light, etc.). Act 57 then requires the time of injury employer to return the injured claimant to work, if there is an open job he/she can perform. If there is not, the employer/insurer may undertake a labor market survey to convert the claimant from total to partial benefits. Here, the vocational consultant does a survey of jobs available in the area using the newspaper ads, the unemployment job listings, etc., to determine if jobs are open in the area using the level of work for which the claimant has been released (sedentary, light, etc.). The consultant makes a listing of those jobs, their hours, and their rate of pay. The employer/insurer then files a petition against the claimant seeking to take credit for what those surveyed jobs pay against the claimant’s average weekly wage. The claimant is never sent to apply for these jobs and does not have to actually be hired by anyone for his/her benefits to be reduced. The labor market survey applies only to injuries occurring on and after 6/24/96.

Light/Modified Duty

Any job a claimant is performing after an injury may be light or modified duty if the claimant still has restrictions as a result of the work injury and is not yet able to return to his/her pre-injury job without any restrictions. The job does not have to be classified as light duty in the collective bargaining agreement. ANY job that is less strenuous than the pre-injury job is light or modified duty if claimant is performing it because he/she cannot return to full duty. A claimant who has returned to his/her regular job but is performing that job with restrictions or on a limited basis is performing modified work.

Medical Treatment

Any medical treatment rendered to an injured employee which is reasonable, necessary, and related to the injury is the responsibility of the company or its insurer. This includes doctor or chiropractor bills, prescriptions, braces, etc. It also includes modifications to vehicles or homes if the injury requires these.


Compensation is modified (changed or reduced) when the claimant returns to work at light duty, but still has some wage loss as a result of the injury. A modification petition can be filed by the employer/insurer when it has made a light duty job available to the claimant (or based upon an Act 57 labor market survey), even if the claimant has not actually returned to light duty work.


An employee must notify the employer when he/she knows, or reasonably should know, that he/she has suffered an injury or disease related to work. Notice must be provided within 120 days of when the employee knows, or should know, of the relationship between the injury and his /her work. If notice is provided within the first 21 days, then the injured employee will receive compensation from the date of the injury. If notice is given from day 22-120, then compensation is payable from the date of notice.

Notice Of Compensation Denial

This form means that the employer/insurer has denied the claim. When an injured employee receives this form, a claim petition should be filed for compensation. An employer or insurer must accept or deny a claim within 21 days. Claimants should pay careful attention to item #4 on the denial form. If an “item #4 denial” is received, the claimant should call an attorney even if medical bills are being paid.

Notice Of Compensation Payable (NCP)

This is the form that means an injury has been accepted as compensable. The injured employee should receive a copy of this form and keep it in a safe place. Unless an NCP has been issued, the claim has NOT been accepted. (See also Agreement for Compensation).

Notice Of Temporary Compensation Payable

A temporary NCP allows the insurer to pay compensation to an injured employee while the claim is being investigated. Temporary compensation can be paid for up to 90 days. A temporary NCP does NOT mean the claim has been accepted or that the injured employee has an open compensation claim. These TNCP’s should be carefully watched. The claim can still be denied within 90 days.

Occupational Disease

Any disease contracted by an employee in the course of his/her employment. The Occupational Disease Act, a part of the overall workers’ compensation statute, lists certain diseases such as pneumoconiosis (black lung) or asbestosis. However, disease compensation is not limited to the listed diseases. Compensation is available for any other disease caused, aggravated, accelerated or reactivated by the claimant’s employment.

Open Compensation Claim

The only way a claimant has an open and accepted claim is to have a Notice of Compensation Payable (NCP) or Agreement for Compensation. It is important to remember that payment of medical bills does NOT mean that the claimant has an open and accepted compensation claim. If no claim petition is filed or no NCP or Agreement is received by the claimant, the 3 year statute of limitations will bar the claim both for cash compensation AND for payment of medical bills. Therefore, if the injured employee misses no work but the company is paying medical bills voluntarily, the company can STOP paying medical bills 3 years and 1 day after the injury (or three years and one day after the end of a period of temporary compensation) unless the employee takes steps to get an NCP or to file a protective claim. Just having a claim number is NOT enough.

Partial Disability

Again, the issue is wage loss. A claimant is partially disabled if he/she is working with restrictions and earning less in wages than at the time of the injury. Partial disability is paid for a maximum of 500 weeks.


A petition is the document filed with the Bureau to begin a workers’ compensation case. Types of petitions include: Claim; Reinstatement; Set Aside Final Receipt; Termination; Suspension; Modification; Review. The petition filed is assigned to a Workers’ Compensation Judge for hearing and decision.

Pre-Existing Condition

Any previous physical condition of the claimant, whether work-related or not, is a pre-existing condition.

Specific Loss

A loss of, or loss of use of, a particular body part. The statute gives specific values to loss of, or loss of use of: fingers, hand, forearm, arm, toes, foot, lower leg, whole leg, sight, hearing, or disfigurement (scars on the face or neck including surgical scars). A claimant who has a specific loss does not need to be disabled or have a wage loss to receive compensation. Specific loss compensation is paid even if the claimant is working at full wages.

Statute Of Limitations (Time Limits)

The statute of limitations is different from notice. If no notice is given within 120 days, no claim can be successful. A claim must have proper notice AND be filed within the time limits to be successful. The time limits are different for injury claims and for disease claims. They are:

Injury Claims - A petition must be filed within 3 years of the date of injury. This applies to payment of both compensation and medical bills.

Disease Claims - Death or disability must occur within 300 weeks of the claimant’s last exposure to the agent which caused the disease. Once death or disability occurs (within the 300 weeks), claimant has 3 years from the date of death or disability to file a claim.

Supplemental Agreement

After the claim has been accepted, supplemental agreements are used whenever there is a change in the claimant’s disability or the rate at which he/she is receiving compensation (ex. Total disability changed to partial disability when the claimant returns to light duty work).

Suspension Of Compensation

When an injured employee returns to work making his/her regular wages, compensation should be suspended. A suspension means that the injured claimant has NOT fully recovered from the injury and still has an open compensation claim. Medical bills will still be paid. A suspension of compensation counts as partial disability and lasts for a maximum period of 500 weeks.


A Termination means the end of compensation and the residuals related to an injury. A petition can be filed by an employer/insurer to ask a Workers’ Compensation Judge to find that the claimant is fully recovered. If a Judge does order a termination, no further wage loss OR medical bills will be paid. The claimant has 3 years to file to reinstate compensation if his/her injury recurs, even after a Termination of benefits.

Total Disability

Disability in Pennsylvania is defined in terms of wage loss. Therefore, total disability means that the claimant is off work and earning no wages as a result of a work-related problem.

Utilization Review

A procedure established to review the reasonableness or necessity of medical treatment or proposed medical treatment. May be used by claimants, employers or insurance carriers. Review can be for past or present treatment, or proposed future treatment. Review is by a reviewing organization in the same area of medical practice as the doctor under review. Generally, this is a procedure used by insurance carriers to try to eliminate liability for payment for medical expenses.

Vocational Consultant

A person employed by a vocational rehabilitation company to find jobs for injured workers. Insurers or employers hire the vocational rehabilitation company to find alternate work for an injured claimant when the time of injury employer cannot or does not want to give the injured worker modified duty work. The vocational consultant will use either job placement or a labor market survey, depending on whether the claimant was injured before or after the passage of Act 57 (6/24/96).

Workers’ Compensation

A no-fault law that provides coverage to injured workers for injuries or diseases arising in the course of their employment. It covers lost wages and medical bills ONLY. There is no compensation for pain and suffering. Workers are covered immediately upon beginning work with the employer. There is no waiting or probationary period for compensation purposes.

Work Capacity

This is the level of work a claimant has been released to perform. The levels of work are: sedentary work; light work; medium work; heavy work; or very heavy work. The categories are based on the lifting requirements of the job, as well as other types of physical activity required such as standing or walking, pushing or pulling, etc.

Representing the working men and women of Pennsylvania since 1981