Workers’ Compensation Insurance in Pennsylvania
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Pennsylvania workers' compensation insurance

Pennsylvania has taken steps to reduce employer workers’ compensation insurance costs, while encouraging businesses to provide a safe work environment for employees.

Who needs workers’ compensation in Pennsylvania?

Business owners in Pennsylvania are required to carry workers’ compensation insurance for all employees. Under the Pennsylvania Workers' Compensation Act, employees who are injured or acquire an illness on the job receive a percentage of lost wages and reimbursement of medical expenses.

Workers' comp also benefits employers, who gain protection against employee lawsuits over injuries. An employer that maintains a workplace safety committee that is certified by the state is eligible to receive a 5% discount on a workers’ compensation policy premium.

Who is exempt from workers' compensation coverage requirements?

The only circumstance in which Pennsylvania employers are not required to carry workers’ compensation insurance is if all employees fall into a category for someone who is exempt, such as railroad workers, longshoremen, federal employees, and domestic workers.

Exemption applications and other documentation must be filed with the Department of Labor and Industry's Bureau of Workers' Compensation; it regulates the Pennsylvania workers’ compensation system.

Check with a licensed insurance agent to ensure that you’re following the laws correctly for your situation.

Is workers’ comp mandatory in Pennsylvania for part-time employees?

Pennsylvania law states that any employee who is injured on the job is eligible for workers’ compensation benefits, regardless of whether that person is performing full-time, part-time, or seasonal work.

Do you need workers’ comp in Pennsylvania if you are self-employed? 

If you’re self-employed, also called a sole proprietor, you don’t need workers’ compensation. Though Pennsylvania doesn’t mandate coverage, it is available if you choose.

Self-employed workers can still receive lost-wage assistance and other benefits through a workers’ comp policy. It’s also possible that a company looking to hire you as a contractor might hesitate if you don’t carry your own coverage.

How much does workers' compensation insurance cost in Pennsylvania?

Male business owner calculating number of employees and other factors

Estimated employer rates for workers’ compensation in Pennsylvania are $1.35 per $100 in covered payroll. Your cost is based on a number of factors, including:

  • Payroll
  • Location
  • Number of employees
  • Industry and risk factors
  • Coverage limits
  • Claims history

How does workers' comp work in Pennsylvania?

Workers' compensation covers the cost of medical care for workplace injuries and occupational diseases. That includes everything from carpal tunnel syndrome to back injuries and black lung disease. It also provides partial wage replacement while the employee is unable to work.

Workers' compensation benefits in Pennsylvania include:

  • Medical benefits, including hospitalization, prescriptions, and orthopedic appliances
  • Wage loss benefits (usually two-thirds of the worker's average weekly wage)
  • Partial disability benefits, if the employee earns lower wages after the injury
  • Vocational rehabilitation
  • Death benefits, if a work-related injury or illness results in death

For details, visit the Pennsylvania Department of Labor and Industry's page on claims and indemnity.

How is workers' compensation purchased in Pennsylvania?

There are four ways to buy workers’ compensation insurance in Pennsylvania:

  1. Purchase workers’ compensation insurance through an agent or broker. Insureon provides an online option to compare quotes from top insurers with one application.
  2. Purchase directly from a private-sector insurance carrier.
  3. Apply for self-insurance. This is an option for large companies that have operated for three or more years.
  4. Obtain insurance from the State Workers’ Insurance Fund.

Costs for workers’ compensation insurance vary because they depend on the level of risk involved for specific employees. Different jobs have different associated hazards, which are typically classified through class codes.

What are the penalties for not having workers’ compensation insurance?

Pennsylvania employers can face civil and criminal penalties for failure to have adequate workers’ comp coverage.

If an employee is injured on the job and the employer is uninsured, the employee’s benefits will be paid from the Uninsured Employers Guaranty Fund, and the employer will be responsible for reimbursing the fund. This would include costs, interest, penalties, and other fees.

In addition, the uninsured employer opens itself up to litigation for any injuries sustained if the employee decides to sue for damages. Often, the amount of damages awarded is more than what the employer’s cost would have been for workers’ compensation insurance.

If it is found that an employer failed to maintain workers’ compensation coverage, each individual responsible for that lapse could also be criminally charged. That person could be found guilty of a misdemeanor, which would carry a fine up to $2,500 and up to a year in jail. If the failure to comply is intentional, it could be a felony charge with a fine of up to $15,000 and up to seven years in prison.

Criminal counts, fines, penalties, and jail time can increase for each day the employer failed to maintain workers’ compensation insurance.

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Pennsylvania workers’ compensation law for death benefits

In addition to providing compensation for lost wages and medical bills to an injured worker, the dependents of someone who dies on the job can obtain workers’ compensation death benefits. Pennsylvania qualifies the following people as dependents:

  • Spouse
  • Child under 18 or full-time student up to age 23
  • Child of any age who is physically or mentally incapacitated
  • Parents who depend on the deceased person for financial support
  • Siblings under the age of 18 or who are full-time students until the age of 23 who depend on the deceased worker for financial support

Workers’ compensation death benefits also include up to $7,000 for burial expenses.

Workers’ compensation settlements in Pennsylvania

Settlements provide an opportunity for all stakeholders to close a Pennsylvania workers' compensation claim. Typically the injured employee gives up rights to future claims in exchange for a sum of money.

The payment is often awarded as a lump sum. Some injured workers will obtain compensation benefits in the form of a structured settlement, which means that payments are made in installments over a period of time.

It’s possible for an injured worker to obtain a commutation, which is when a lump sum is awarded in lieu of weekly benefits but the worker does not give up rights to future benefits like medical treatment.

Workers’ compensation statute of limitations in Pennsylvania

The statute of limitations to file a claim petition for an injury sustained on the job in Pennsylvania is three years from the date of injury.

However, the claimant is required to seek treatment with an approved health care provider within 90 days after the injury. There is also a 120-day time limit for notifying employers about the injury.

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