Often, an employee’s work-related injury occurs as the result of the actions of a third party. Nonetheless, the worker’s employer pays workers’ compensation benefits to the injured employee. “Subrogation” is defined as one person or party standing in the place of another in respect to a debt or insurance claim. When a person is injured and a party other than the party at fault pays for all or some of the damages resulting from the injury, subrogation allows the innocent payer to stand in the shoes of the injured party. Often, this occurs when an employee has been involved in a motor vehicle accident while in the scope of his or her employment.
Thus, the Pennsylvania Workers Compensation Act in 77 P.S. § 671 allows an employer and its insurer to assert a right of subrogation against an employee’s recovery of damages in a civil action. An employer may assert this right to recovery in the circumstance that it has paid workers’ compensation benefits for an injury to its employee caused by the acts or omissions of a third party. Thus, if a worker is involved in a car accident caused by a third party and receives both workers’ compensation benefits and damages in a civil action against the third party, he or she must pay back any recovery from the innocent employer or “collateral source.”
As with most laws, there are limitations upon the rights of an employer to assert a subrogation recovery. A common limitation is that an employer may not seek a subrogation recovery against any portion of the civil action recovery which is designated as a spousal claim arising from the work injury.
Employers have only had a right of subrogation against an employee recovery for damages incurred as a result of a motor vehicle accident recovery since 1993 when the Workers’ Compensation Act was amended. Thus, today an employer has a right of subrogation when a third party causes an employee to be injured in a work-related motor vehicle accident.
There are some further limitations upon employer subrogation rights when an employee is involved in a motor vehicle accident. While an employer may not assert any subrogation lien against the employee’s recovery from his/her personal insurance policy for uninsured or under-insured coverage, the employer is entitled to subrogate against any employee recovery from the employer insurance policy for uninsured or under-insured coverage.
For 110 years, Powell Law has litigated Pennsylvania workers compensation actions and obtained benefits for injured Pennsylvania workers. Powell Law’s decades of experience make it the clear choice for representation in the Scranton/Wilkes-Barre area. Consult an experienced Pennsylvania workers’ compensation attorney. Contact Powell Law at (570) 961-0777. The consultation is FREE! Happy Holidays!