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Workers’ Comp. and Vacation Pay

  • Dave Brown, Esquire
  • 01/11/2021

If you have to pursue a workers’ compensation claim, we can assure you that it will not be a vacation. If that happens, you may wonder whether you are entitled to receive vacation pay, and if so whether you will be required to pay it back if your workers’ compensation claim is granted. Here is the lowdown on how it works.

Suppose you have the misfortune of hurting yourself on the job – for example, you slip and fall on a wet floor, throw your back out lifting a box, or strain your shoulder tossing a trash bag into a dumpster. You are not able to work due to your injury and have filed a workers’ comp. claim. You’re anxiously waiting to hear from the insurance company if your claim will be accepted. Meanwhile, because you’re not working, you don’t have a paycheck coming in. You need money so you speak to your supervisor and the human resources rep. at your company and inquire whether you can receive vacation pay. How does this affect your workers’ comp. claim? Let’s go through a couple scenarios.

First, we will assume that you are not a union member and do not have a collective bargaining agreement with your employer. You are entitled to two weeks of vacation pay during the year, but your vacation days do not accrue or roll over to the next year. If you don’t use them by the end of the year, you lose them and then start with two weeks of vacation days the following year. In our hypothetical, you have not taken any vacation days this year, and your company is agreeable to paying you vacation pay for the first two weeks you are out of work. If your claim is then picked up by the insurance company, they will not have to pay your workers’ compensation benefits for those two weeks because you have essentially been paid your full salary for those two weeks. If you were paid by your company for those two weeks and received workers’ comp. benefits from the insurance company, it would be like you were “double-dipping.”

Things are different if you are in a union and have the protection of a collective bargaining agreement. The language varies between collective bargaining agreements, and the specific language in your agreement governs your situation. One of the advantages of union membership is that many collective bargaining agreements provide that vacation pay, as well as sick pay, are accrued benefits that you have earned based on your years of service with the employer. It is common for an agreement to contain language that a member who receives vacation pay or sick pay following a work injury, and later receives workers’ comp. benefits for the period in which they received that pay, is entitled to workers’ comp. benefits or a restoration of their days. We will assume that your collective bargaining agreement contains a provision like that.

Let’s go through an example to help you understand how this would play out. Say that you have accrued a lot of days — 40 vacation days and 20 sick days — because some years you do not use all of your days and they roll over to the next year. If you injure yourself and the insurance company denies your claim (a common scenario), you will have to hire a lawyer to file a petition on your behalf. A Workers’ Compensation Judge will preside over your case and a series of hearings and depositions will be held. It could take upwards of a year for the Judge to decide your case. While the case is pending, you exhaust all 40 of your vacation days and all 20 of your sick days – so you get paid your regular salary for 60 days, or 12 weeks.

If the Judge then grants your petition and awards you workers’ comp. benefits covering the time period that you received vacation and sick pay (as well as ongoing benefits), for that 12-week period, you will have the choice of receiving workers’ comp. benefits (on top of the vacation and sick pay that you have already received) or opt to have your days restored. If you choose to receive workers’ comp. benefits for those 12 weeks, you might ask, “Isn’t that double-dipping?” Good question. Under this scenario, though, it is not based on the concept that your vacation days and sick days are an accrued benefit that you have earned which is not the case in the standard, non-union employee-employer relationship. The rationale is that you have earned those vacation and sick days throughout your years of employment, and as a result you have the right to get paid for them when you choose. If you decide to get paid for the days during a time that you are later granted workers’ comp. benefits, that’s your prerogative and you don’t have to pay the money back to your employer or the insurance company.

However, for some workers, their bank of vacation and sick days are precious, and they prefer the security of having their days restored. If you make this choice, the workers’ comp. insurance company would take a credit on the vacation and sick pay that you have received and will not start paying you workers’ comp. benefits until the conclusion of the 12-week period.

Regardless of your employment situation and whether you are in a union or not, if you receive vacation pay or sick pay while your workers’ comp. case is pending and then lose your case, you can keep the money, but you won’t get the days back.

You don’t want to risk losing your workers’ comp. case. It’s bad enough that you have hurt yourself at work, cannot do your job, and are suffering pain as a result of your injury which requires you to treat with doctors for your injury. You need to put your case in the capable hands of an experienced workers’ compensation lawyer, so that your rights are fully protected and the risk of losing your case is minimized. At Pearson Koutcher Law, we specialize in workers’ comp. law – all we do is represent injured workers in their workers’ comp. cases. If you have been injured, please call us for a free comprehensive evaluation of your case. One of our experienced and knowledgeable lawyers will answer your questions about vacation pay, sick pay, and all of the other issues in your case.