Stewart v. City of Philadelphia (WCAB), No. 490 C.D. 2024 (Pa. Cmwlth. Ct., April 15, 2025)
By way of brief history, Officer Stewart worked long hours during the COVID pandemic. In the fall of 2020, he regularly encountered members of the public and other officers who did not wear masks. Eventually, Officer Stewart contracted COVID in December of 2020 and was hospitalized as a result. When he returned home, he was placed on “COVID E” status.
The employer offered evidence explaining that COVID E was an ‘excused time’ designation developed for officers in the early months of the pandemic. The employee received their regular pay, was not charged for any time off, and continued to accrue all other benefits. The employer presented testimony from the police department’s infection control officer who explained that the COVID E benefits were given to employees regardless of whether the disease was contracted at work.
Officer Stewart collected “COVID E” benefits for approximately two years. In January 2022, for the first time, the employer issued a Notice of Compensation Denial (NCD). The employer acknowledged the Claimant’s COVID diagnosis but denied that it was work-related. Officer Stewart’s benefits stopped in March of 2022. In response, Claimant filed a Reinstatement Petition arguing that the payment of COVID E benefits constituted payments in lieu of workers’ compensation benefits, and as a result, the employer had accepted liability for his condition.[1]
Wages in lieu of compensation are any form of compensation, apart from the Act, paid with the intent to compensate for a work-related injury.[2] If an employer fails to file an NCD within twenty-one (21) days of notice of an injury, but instead begins paying the worker in some way, a rebuttable presumption arises that the employer has accepted liability as if they had issued a Notice of Compensation Payable (NCP).[3] Importantly, it is the intent of the payment, not the receipt thereof, which controls.[4] The Court stressed that intent is the “critical legal element” in this analysis.[5]
With that background, the Court found it significant that the COVID E benefits were paid to employees regardless of whether their COVID condition was work-related. The record contained testimony from the Claimant, himself, who admitted that the employer was “covering everyone with COVID E status.” The Court ultimately found that even if the presumption had arisen in this case, the Employer rebutted same. The payments could not be intended to serve as wages in lieu of compensation because they were paid to all employees who contracted COVID, regardless of causation.
This case serves as a warning and a reminder. Payments made by an employer after a work injury can – and often are – construed as wages in lieu of compensation. That said, not all hope is lost; intent is king. An employer can overcome the presumption of relatedness by demonstrating that the payments were never intended to replicate Workers’ Compensation benefits. Nonetheless, this remains a difficult task in litigation. Employers and their carriers are well advised to contact an experienced Workers’ Compensation attorney to discuss the specifics of their case.
1 Claimant also filed a Penalty Petition along with the Reinstatement Petition. Both were denied at the Judge level, and that ruling was affirmed by the Workers’ Compensation Appeal Board.
2 See generally, Kelly v. WCAB (DePalma Roofing), 669 A.2d 1023, 1026 (Pa. Cmwlth. 1995)(emphasis added).
3 See generally, NUS Corp. v. WCAB (Garrison), 547 A.2d 806 (Pa. Cmwlth. 1998).
4 NUS Corp., 547 A.2d at 810.
5 See, Findlay Twp. v. WCAB (Phillis), 996 A.2d 1111, 1118 (Pa. Cmwlth. 2010).
