Automatic 50% offset for SS retirement benefits under §204(a) doesn’t violate equal protection clause of U.S. and PA Constitutions; non-work-related factors not part of §306(b)(2)’s requisite that residual productive skill be reflected in earning power.
Following the claimant’s work injuries, the employer filed a petition to terminate benefits for a portion of the injuries and a modification petition based on a Labor Market Survey/Earning Capacity Evaluation. Further, the employer filed a Notice of Workers’ Compensation Benefit Offset due to the claimant’s receipt of Social Security old age benefits. Thereafter, the claimant filed a petition challenging the offset. One of the claimant’s arguments was that § 204(a) of the Act was unconstitutional.
During litigation, the claimant presented a vocational witness who testified that, during the course of interviewing the claimant, he learned the claimant had a felony conviction. According to the witness, the positions relied on in the Labor Market Survey were therefore unavailable because of the conviction. The claimant testified that he applied for the jobs in the Labor Market Survey, but had advised potential employers of his conviction, which he said imposed restrictions relative to performing the jobs.
The judge granted the modification petition, concluding that the claimant had a residual earning capacity. In doing so, the judge pointed out that the claimant’s vocational witness focused on the felony conviction, which occurred after the work injury, and found that the employer should not be hindered by the claimant’s subsequent behavior and conviction. The judge also granted the termination petition and denied the claimant’s review petition challenging the offset.
The claimant appealed to the Appeal Board, and the Board affirmed. On appeal to the Commonwealth Court, the claimant argued that § 204(a)’s automatic 50% offset for the receipt of old age benefits violated the Equal Protection Clauses of the United States and Pennsylvania Constitutions. Additionally, the claimant argued that the judge should have considered his conviction in considering his residual reductive skill and in determining whether positions were actually open and available. The Commonwealth Court held that there was no violation of the claimant’s equal protection rights by the employer taking a § 204(a) offset for his Social Security old age benefits. The court noted that the 50% offset for retirement benefits was a recognition of an employer’s partial contribution to the Social Security Trust Fund and, although not a perfect fit, a fair approximation of the employer’s contribution. The court further noted that the same issue is generally not present in the severance or pension offset situation, where the focus is on the relationship between an employer and an injured employee and how that employer funded the employer-provided benefit.
As to the claimant’s argument that his post-injury felony conviction made jobs in the Labor Market Survey unavailable to him, the court held that § 306(b)(2)’s requirement of considering an employee’s residual productive skill relative to earning power refers to a claimant’s work injury without consideration of any non-work-related factors after the work injury. The court noted that if an employer can establish that there is a job available that complies with an employee’s remaining work-related physical injuries, and the employee fails to return to or accept this position because of non-work-related factors, the employer has proven that the loss of earnings is attributable to something other than the work-related injury.
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