Pennsylvania Supreme Court Holds That the Compensation Rate for Specific Loss Benefits is Controlled by Section 306(c) of the Act, Not Section 306(a)

This case involved a claimant who crushed her arm in a pretzel machine while working for the employer. Eventually, she needed to have her right forearm amputated. The parties agreed that the claimant’s injury was a specific loss of the forearm, entitling her to payment of 370 weeks of compensation benefits and 20 weeks of a healing period, for a total of 390 weeks.

However, the parties disagreed as to how to calculate the weekly benefit amount. The employer took the position it should be calculated based on the formula for total disability under Section 306(a) of the Act. The claimant maintained that the Section 306(c)(25) calculation for specific loss benefits should apply.

The claimant’s average weekly wage was $322.05 per week. Based on the employer’s position, under Section 306(a) of the Act, the claimant’s compensation rate ($289.95) would be considered a remedial calculation, for a low-wage worker earning less than half of the statewide average weekly wage. However, for specific loss benefits, Section 306(c) provides different compensation amounts ($540.50) and durations for different injuries. Section 306(c)(2) states that for loss of a forearm, the calculation for the compensation rate is 66 2/3rd of wages during 370 weeks. Section 306(c)(25) states that compensation for the healing period shall be computed as provided in Section 306(a).

The workers’ compensation judge found that specific loss benefits for the claimant should be calculated using the Section 306(a) formula. The Appeal Board affirmed as did the Commonwealth Court.

The Supreme Court, however, reversed, finding that Section 306(c) was the proper formula to calculate the claimant’s compensation rate for the loss of use of her forearm. According to the court, the General Assembly intended, within the body of the Act, one formula for calculating total disability benefits and another for calculating specific loss benefits. The court remanded the case for further proceedings.