School District Can't Take UC Credit for Teacher's CARES Act Payments

Harrisburg, PA (WorkersCompensation.com) – When state law permits an employer that is paying workers’ compensation benefits to offset those payments with a credit for unemployment benefits the worker receives, what happens when a new, pandemic-related program enters the picture?

In Carbon Lehigh Intermediate Unit #21 v. Waardal, No. 750 C.D. 2021 (Pa. Commw. Ct. 01/03/22), the court explained that money a worker received through the CARES Act wasn’t the same as unemployment compensation she received by operation of state law and so the federal money she received wasn’t a credit the school district she worked for could claim.

CARES Act

In 2017, a substitute teacher experienced a work-related injury during the course and scope of her employment, and the district accepted liability. In March 2020, as the coronavirus pandemic hit, the district laid off the teacher, at which point she began collecting weekly unemployment benefits as well as pandemic compensation made available through the CARES Act.

The teacher sought a reinstatement of her total disability benefits, prompting the district to seek a credit for benefits it paid on the teacher’s behalf in the amount of the weekly pandemic compensation the teacher received under the CARES Act.

A Workers’ Compensation Judge determined that the district was not entitled to an offset for the teacher’s pandemic compensation, noting that the $600 weekly benefit the teacher received under the CARES Act was unrelated to the amount of her wages. The WCJ also found that converting the funds into a credit for an employer would largely defeat the purposes of the CARES Act to serve as a general economic stimulus.

In response, the district appealed to Pennsylvania’s Workers’ Compensation Appeals Board, which agreed with the WCJ, and, after the case went back to the WCJ one more time, the district appealed to court.

State Law vs. Federal Benefits

In court, the question was whether pandemic compensation under the CARES Act was the same as unemployment compensation benefits. The reason that was an issue was because, in Pennsylvania, employers pay workers’ compensation benefits are entitled to a credit in the amount of those benefits.

In this case, the court agreed with he WCJ and WCAB that pandemic compensation under the CARES Act wasn’t the same thing as state unemployment compensation. While the law sought to prevent employers from having to pay duplicate benefits for the same loss of earnings, disallowing a credit for pandemic compensation paid for by the federal government did not put an employer in the position of paying duplicate benefits.

“Indeed, a contrary decision would result in disparate treatment between two distinct groups of unemployed individuals,” the court wrote, “those who are permitted to collect pandemic compensation by virtue of having lost their jobs, and those who may not because they are burdened with an injury in addition to unemployment.”

As a result, the court upheld the WCJ and WCAB decisions that denied the district’s efforts to claim a credit for the teacher’s pandemic compensation benefits.

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