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Last Tuesday, Governor Shapiro signed Senate Bill 1232 into law. This bill, introduced by Senator Pennycuick, took a long and winding path before finally being signed. Senate Bill 1232 mirrors House Bill 760 and was enacted as Act 126 of 2024. The Act will take effect in 60 days and includes a one-year compliance period.
Essentially, this Act allows injured workers to receive disability benefits via direct deposit, rather than through paper checks sent by mail. The Act amends Section 308(b) to state, in part, “compensation payable under this article shall be paid by direct deposit to the account of the person entitled to the compensation upon request of the person...”
The Act requires insurers or self-insured employers to inform injured workers of their right to receive wage loss benefits by direct deposit. This notification must be provided using a form— to be issued by the Bureau— that accompanies the Notice of Compensation Payable. The form must include the name, telephone number, mailing address, and email address of the person entitled to compensation, the workers’ compensation claim number, and the name and address of the financial institution, along with the account and routing number to which compensation will be paid.
The injured worker must submit a valid payment authorization form or complete a valid online authorization within 30 days of being notified that direct deposit is available. Payments by direct deposit are not required until valid authorization has been received. An injured employee may change direct deposit accounts no more than twice in any calendar year unless a Workers’ Compensation Judge or a court of competent jurisdiction orders otherwise.
There are exceptions to the requirement for direct deposit payments. Lump sum settlement payments resulting from compromise and release agreements may still be made by paper check unless the insurer or self-insured employer agrees to direct deposit. Additionally, payments on claims with an “expected duration” of 60 days or less may be made by paper check.
If your company is not currently set up to process wage loss payments via direct deposit, the Act mandates compliance within one year of the law’s effective date. The clock is ticking.
Senate Bill 1232 is expected to reduce issues related to the timely receipt of disability payments through the mail and to decrease the filing of Penalty Petitions for late payments.
The Act does not specify the penalties for noncompliance.
If you or your company have questions about this Act and how to ensure compliance, please reach out to Chartwell Law.
