In November 2024, new legislation went into effect in Pennsylvania that requires payment of regular Workers’ Compensation checks through direct deposit. Direct deposit of Workers’ Compensation checks will potentially resolve many issues that injured workers encounter with receiving timely workers’ compensation payments.
Traditionally, the majority of Workers’ Compensation checks were issued by regular mail through a paper check. Although a few companies had already gone to direct deposit of Workers’ Compensation checks, they were in the minority, but now will be “ahead of the curve” on this issue.
This new legislation, contained in Senate Bill 1232 of 2024, takes effect in 2 stages. First, when the legislation takes effect in January 2025, insurance companies and self-insured employers will be permitted, but not required, to provide for direct deposit of Worker’s Compensation payments. However, all insurers and self-insured employers will be required to provide for direct deposit no later than November 2025, one year after the enactment date of the new legislation.
There are exceptions to the direct deposit requirements. First, if the person entitled to receive the workers compensation payment does not agree to and authorize payment through direct deposit or does not have an account with an institution through which direct deposit may be accomplished, paper checks will still be required. Additionally, lump sum payments following a settlement of a workers’ compensation claim will still be issued through paper checks.
The attorneys at YCL frequently deal with issues regarding checks being late or missing and believe that choosing the option of direct deposit will help to eliminate many such problems. The frequent answer of the insurance company that the check was mailed will no longer be an excuse for delay in payment when direct deposit of Workers’ Compensation checks is implemented. As such, we are in full support of this new legislation and strongly recommend that individuals who are eligible to receive such payments take advantage of direct deposit of their Workers’ Compensation checks.