PENNSYLVANIA WORKERS’ COMPENSATION CLIENT ADVISORY: Amendment to PA Workers’ Compensation Act

January 16, 2025

Direct Deposit:

On October 29, 2024, Governor Josh Shapiro signed Senate Bill 1232, amending the Pennsylvania Workers’ Compensation Act to require employers and insurers to offer claimants the option of receiving workers’ compensation wage-loss payments via direct deposit. This new requirement became effective on December 28, 2024, and all employers and insurers must ensure direct deposit is available to all claimants no later than December 28, 2025.

Key Provisions of the New Law

  1. Notification Requirements:
    • Employers and insurers must notify claimants of the direct deposit option as soon as the service becomes available or concurrently with the issuance of a Notice of Compensation Payable.
  2. Authorization Form:
    • Employers and insurers are required to provide a Commonwealth-issued authorization form (Payment Authorization Form LIBC-215) to claimants, either via mail or electronically.
    • Claimants must complete and return the authorization form through mail or electronic submission (if offered) to enroll in direct deposit.
  3. Payment Process:
    • If a claimant does not submit a valid authorization form within 30 days of notification, employers and insurers must temporarily issue indemnity payments via paper check.
    • Claimants can only select one payment method—either paper check or direct deposit—and employers/insurers are only required to deposit payments into a single bank account. Payments cannot be split between methods or multiple accounts.
  4. Implementation Timeline:
    • Once a claimant requests direct deposit and submits a valid authorization form, the employer/insurer must implement direct deposit within 45 days of receipt.
    • If a claim is expected to last fewer than 60 days, payments may be issued by paper check.
  5. Exclusions:
    • Compromise and Release payments are not subject to the direct deposit requirements and may continue to be issued by paper check.

Employers and insurers are encouraged to begin offering direct deposit as soon as possible. To simplify enrollment, the Bureau of Workers’ Compensation has issued Payment Authorization Form LIBC-215, available here: LIBC 215

If you have any questions about complying with these requirements or need assistance implementing direct deposit, please contact one of our experienced Pennsylvania Workers’ Compensation attorneys.