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House of Representatives
Session of 2017 - 2018 Regular Session


Posted: February 6, 2017 05:40 PM
From: Representative Seth M. Grove
To: All House members
Subject: Reducing Act 534 Benefits
In the near future, I plan to reintroduce House Bill 1819 from the 2013-2014 legislative session. This legislation would put an end to a windfall that injured Department of Human Services' employees have been receiving for years. Employees of state hospitals or state centers who are injured on the job by the act of a patient or resident receive their full salary (untaxed), full health benefits, life insurance; and accrue vacation and pension credit, all while not working, sometimes, for the rest of their life.

The original legislation, which granted these benefits to Department of Corrections employees, was enacted in 1959 (Act 632), and was amended in 1961 (Act 534) to include any Department of Human Services' employees injured by an act of a patient or client. The intent of Act 534 was to recruit individuals to work in psychiatric hospitals and state centers as people did not want to work for low pay and benefits in places that were considered dangerous. Now in 2017, pay, and especially benefits, for state employees covered by Act 534, surpasses the pay and benefit packages typically available to staff in many, if not most, comparable private sector settings, such as skilled care nursing homes and long-term care homes. In addition, the nature of these benefits provides no incentive for certain employees to attempt to return to work in a reasonable period of time.

Prior to 1970, it was unlawful for state employees to bargain with the commonwealth to attempt to obtain wage increases or benefits like those provided by Act 534. Therefore, the only way state employees could receive guaranteed benefits, such as these, was for the General Assembly to confer them by law. However, since the passage of Act 195 in 1970, which authorized public sector employees to bargain over wages, hours, and working conditions, they can, and have repeatedly and successfully bargained for substantial wage and benefit increases. State employees now have the legal right to negotiate such benefits into their collective bargaining agreements with the commonwealth so there is no reason for benefits like these to continue to be memorialized by a statute in perpetuity. Act 534, a pre-collective bargaining law guaranteeing extraordinary benefits to employees of a different era, has outlived its usefulness now that collective bargaining between the parties is well-established.

When I originally introduced this legislation, the department had 219 employees on Act 534 leave receiving full pre-injury salary, and full employee benefits. One hundred and thirty three (60%) of these open Act 534 cases are at least 3 years old, with approximately seven additional cases reaching the three year mark every year. The oldest open case dates back to 1971.

My legislation would amend Act 534 by reducing the lifetime benefit to a 3-year benefit from the date of the injury. This reduction will not leave employees with nowhere to turn if they are still too injured to work. They will receive workers’ compensation benefits at this time, like any private sector or other commonwealth employee.

Introduced as HB998