KEY TAKEAWAY:

• Josh Shapiro has signed a bill requiring that employers and insurers offer claimants a direct-deposit option for Workers’ Compensation payments

• Employers and insurers must offer direct deposit within one year of the effective date of the law

• The law takes effect Dec. 28, 2024

Gov. Josh Shapiro on Oct. 29 signed Senate Bill 1232, amending the Pennsylvania Workers’ Compensation Act to require that employers and insurers offer claimants the option to receive their Workers’ Compensation payments by way of direct deposit.

The bill takes effect Dec. 28. The bill further requires that all employers and insurers must offer direct deposit within one year of the effective date of the law. Accordingly, direct deposit must be offered to all claimants as an option for payment of indemnity benefits as of December 28, 2025.

The new law sets forth the following guidelines:

Employers/insurers will now be required to notify claimants of the option to receive indemnity payments by direct deposit immediately once the service becomes available, or concurrent with issuance of a Notice of Compensation Payable.

Employers/insurers will be required to provide a Commonwealth-issued authorization form to claimants either via mail or electronically. To receive direct deposit, claimants must complete the provided authorization form and return same either by mail or electronically, if that option is offered by the employer/insurer.

If an employer/insurer requires direct deposit for payment of indemnity benefits, but the claimant fails to submit a valid authorization form within 30 days of receiving the notification, employers/insurers must temporarily issue indemnity payments via paper check.

Claimants may only choose to receive payment via either paper check or direct deposit, not both, and employers/insurers are only required to issue deposits to one bank account. Payments cannot be split between forms of payment or different accounts.

Once the claimant requests direct deposit, it must be implemented within 45 days of the employer/insurer’s receipt of a valid authorization form.

If a claim is expected to be less than 60 days in duration, payment may be issued by paper check.

Please note: Compromise and Release payments are not affected by this legislation and may continue to be issued by way of paper check.

For more information or immediate guidance, contact:

• Ashley E. Moss
• Stacy A. Tees
• Damon M. Gruber
• Sean J. McKinley
• Esther F. Omoloyin
• Or another member of our Workers’ Compensation practice group