SJC: Sick Pay, Vacation Pay Not “Regular Compensation” in Workers’ Comp Case

The supplemental pay (vacation and sick day credits) received by a government worker to offset his income while he was unable to work due to disability should not be considered “regular compensation” that is going to count against him in determining his disability date.

This case, Public Employee Retirement Administration Commission v. Contributory Retirement Appeal Board, before the Massachusetts Supreme Judicial Court, is important in terms of helping outline how those types of supplemental income received to help offset workers’ compensation will affect one’s retirement. In general, you typically can’t receive both retirement benefits and workers’ compensation, so workers must choose. As noted by the PERAC (which regulates public pensions per MGL ch. 32), public workers do have the ability to seek disability retirement.

What is Massachusetts Disability Retirement? 

Disability retirement applies to those who are members of the state’s contributory retirement systems who then become disabled and unable to work or perform the essential duties of his or her position. There are two types of disability for which a public employee can be retired:

  • Accidental
  • Ordinary

In the case of an accidental disability case, it requires a showing that the personal injury suffered or hazard faced occurred while worker was performing his or her duties, assuming there was no serious or willful misconduct on the part of the worker. Certain workers (firefighters, police officers, corrections officers and state court judges) have to apply before reaching a maximum age, but they don’t need to meet any minimum service or age requirements. One can apply after they have left their position, but they need to have become permanently disabled while still a member-in-service. In some cases, as noted in the Heart Law, disability resulting from heart disease or hypertension can be presumed as a line-of-duty illness for police, correctional officers and a few other professionals. There is also a Lung Law whereby certain workers (namely firefighters) who suffer a respiratory or lung tract disease can claim disability retirement. Firefighters and police officers as well as a handful of others are also entitled to the presumption that their cancer was work-related (assuming they meet certain criteria).

In cases of ordinary disability, members may be eligible for disability retirement if they are incapacitated permanently and unable to work due to a non-work-related illness or injury that prevents them from being able to carry out essential duties.

In some cases, workers can be involuntarily fired if the department head files the application to retire a worker on the basis of disability.

The process of a government worker’s disability retirement is similar to the total permanent disability one might receive through workers’ compensation.

The SJC Decision

The Massachusetts Supreme Judicial Court’s recent decision pertains to a worker who was involuntarily retired due to accidental disability.

The worker had been employed for the department of public works in Swampscott from 1985 to July 2012. He was injured at work in June 2010 and started receiving workers’ compensation benefits that very same day.

In addition to workers’ compensation, the employee also received two hours weekly of sick or vacation pay (supplemental pay) under the law. In 2012, the town sought to have him involuntarily retired due to accidental disability. The board approved that application and voted to involuntarily retire him. At that point, he’d received workers’ compensation and supplemental pay until mid-2012. PERAC at that point determined his effective retirement date was in 2012 because that was when he’d received his last “regular compensation” from supplemental pay.

However, the division of administrative law reversed PERAC’s determination, concluding instead that employees’ supplemental pay wasn’t “regular compensation” under the law, and that the last time he’d received regular compensation was in June 2010, when he was injured. This distinction is important because the worker would be entitled to retroactive retirement benefits from that date. It’s the difference between $0 and many months worth of back-pay. The administrative law judge determined his date of retirement should be six months before the application was filed because that was when he last received regular compensation.

PERAC appealed that decision, but it was affirmed and then appealed again to the SJC. The state high court also affirmed.

The question was whether supplemental payment, as paid in accordance with MGL ch. 152 section 69 amounts to “regular compensation,” as outlined in MGL ch. 32 section 1 when it’s also received at the same time as workers’ compensation. The SJC said that while it gives weight to the experience of both PERAC and the administrative law judge, here they offered different interpretations of law, and in this matter, it was the administrative law judge’s interpretation that won out. As noted in the statute, regular compensation is one that is ordinary, recurrent and not inflated by things like bonus or overtime pay. The idea is to exempt payments that are irregular from the calculations used to determine retirement. That means it won’t include things like:

  • Bonuses
  • Commissions
  • Overtime
  • Cost-of-living bonuses
  • Clothing allowances
  • Annuities
  • Lump sum payments in lieu of or for unused vacation or sick leave

The law further outlines that accidental disability retirement is effective:

  • The day of the injury;
  • Six months prior to the filing of the written application for such retirement;
  • The date for which employee last received regular compensation for public service employment.

The SJC rejected PERAC’s position that recurring payments of vacation time or sick leave amount to regular compensation. The statute refers to ordinary payment for work that is performed.

Because the process of applying for workers’ compensation and long-time disability benefits is different and sometimes more complex than a typical case, it’s imperative to hire a legal team with experience in representing public employee claimants. We can help.

If you or someone you love has been injured a Boston work accident, call for a free and confidential appointment at 1-888-367-2900.

Additional Resources:

Massachusetts top court limits definition of ‘regular compensation’ in workers’ comp case, Feb. 22, 2018, By Steven A. Meyerowtiz, Property Casualty 360

More Blog Entries:

Third-Party Liability in Massachusetts Work-Related Injuries, Deaths, March 13, 2018, Boston Workers’ Compensation Attorney Blog