Opinion
No. 1126 C.D. 2014
02-05-2015
Teresa A. Adams, Petitioner v. Unemployment Compensation Board of Review, Respondent
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE JAMES GARDNER COLINS, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE McCULLOUGH
Teresa A. Adams (Claimant) petitions for review, pro se, from the June 16, 2014 order of the Unemployment Compensation Board of Review (Board), which vacated a referee's determination that Claimant's appeals were filed untimely; concluded that the attributable amount of severance pay she received exceeded her benefits rendering her ineligible for benefits under section 404(d)(1) of the Unemployment Compensation Law (Law); and determined that Claimant received non-fault overpayments pursuant to section 804(b)(1) of the Law. We affirm.
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §804(d)(1). Pursuant to section 404(d)(1) of the Law, an "eligible employe who is unemployed with respect to any week ending subsequent to July 1, 1980 shall be paid, with respect to such week, compensation in an amount equal to his weekly benefit rate less the total of ... (iii) the amount of severance pay that is attributed to the week." 43 P.S. §804(d)(1).
Prior to January 1, 2012, severance payments received by an employee from her employer based upon her separation from employment were not deductible from the employee's benefits. However, section 404(d)(1) of the Law was amended in 2011 to include clause (iii), which requires the deduction of severance payments from benefits. KillianMcCombie v. Unemployment Compensation Board of Review, 62 A.3d 498, 500 (Pa. Cmwlth. 2013).
43 P.S. §874(b)(1). Section 804(b)(1) provides that any person who, other than by reason of her fault, has received any unemployment benefits to which she was not entitled shall not be liable for repayment, but shall be liable to have such sum deducted from any future compensation payable to her within the same benefit year, or the three-year period immediately following the benefit year.
Claimant was employed as a full-time personal trust officer for AmeriServ Financial (Employer) until February 12, 2013. Following her termination, Claimant applied for and received benefits from February 21, 2013, to April 5, 2013. On April 4, 2013, Claimant and Employer entered into a separation and release agreement (Agreement), whereby Employer, among other things, agreed to provide Claimant with severance payments in the form of thirty-six weeks of salary (a total of $28,921.80) and fringe benefits. On May 1, 2013, the local service center determined that Claimant was disqualified for benefits under section 404(d)(1) of the Law and, on May 2, 2013, determined that she received non-fault overpayments in the amount of $2,996.00. (Board's Findings of Fact Nos. 1-2; Notes of Testimony (N.T.) at 10; Claimant's brief at Appendix B and F.)
Claimant filed appeals from the local service center's determinations, and, following a hearing, the referee dismissed Claimant's appeals as untimely filed. Upon further appeal, the Board twice remanded the case to the referee, acting as a hearing officer for the Board, to hold a hearing on the merits. After the hearing, the Board issued an order and decision on June 16, 2014, vacating the referee's determination that Claimant's appeals were filed untimely and affirming the local service center's determinations. (Board's decision at 1-2.)
In its decision, the Board made the following findings of fact:
1. [Claimant] last worked for [Employer] on 2/12/2013.(Board's Findings of Fact Nos. 1-9.)
2. [Claimant] received/will receive severance pay from [Employer] in the amount of $28,921.80.
3. [Claimant's] regular full-time weekly wage was $885.17.
4. [Claimant] customarily worked five days in a calendar week.
5. The applicable three-year average annual wage in Pennsylvania is $46,180.68.
6. Forty percent of the three-year average annual wage is deductible in the amount of $18,472.27.
7. [Claimant] filed an application for benefits . . . effective February 10, 2013, with a weekly benefit rate of $436 and a partial benefit credit of $131.
8. [Claimant] received benefits to which she was not entitled through no fault of her own.
9. [Claimant] has had difficulty receiving her mail.
Claimant does not specifically challenge any of these factual findings; therefore, they are conclusive on appeal. Hessou v. Unemployment Compensation Board of Review, 942 A.2d 194, 199 (Pa. Cmwlth. 2008).
Based upon these findings, the Board first determined that Claimant's appeals were filed timely. The Board further determined that Claimant was not entitled to benefits under sections 404(d)(1) and 404(d)(1.1) of the Law, providing the following rationale:
In more detail, sections 404(d)(1) and 404(d)(1.1) of the Law state:
(d)(1) Notwithstanding any other provisions of this section each eligible employe who is unemployed with respect to any week ending subsequent to July 1, 1980 shall be paid, with respect to such week, compensation in an amount equal to his weekly benefit rate less the total of . . . (iii) the amount of severance pay that is attributed to the week.43 P.S. §804(d)(1), 404(d)(1.1).
(1.1) For purposes of clause (all of the following apply:
(i) "Severance pay" means one or more payments made by an employer to an employe on account of separation from the service of the employer, regardless of whether the employer is legally bound by contract, statute or otherwise to make such payments. The term does not include payments for pension, retirement or accrued leave or payments of supplemental unemployment benefits.
(ii) The amount of severance pay attributed pursuant to subclause (iii) shall be an amount not less than zero (0) determined by subtracting forty per centum (40%) of the average annual wage as calculated under subsection (e) as of June 30 immediately preceding the calendar year in which the claimant's benefit year begins from the total amount of severance pay paid or payable to the claimant by the employer.
(iii) Severance pay is attributed as follows:
(A) Severance pay is attributed to the day, days, week or weeks immediately following the employe's separation.
(B) The number of days or weeks to which severance pay is attributed is determined by dividing the total amount of severance pay by the regular full-time daily or weekly wage of the claimant.
(C) The amount of severance pay attributed to each day or week equals the regular full-time daily or weekly wage of the claimant.
(D) When the attribution of severance pay is made on the basis of the number of days, the pay shall be attributed to the customary working days in the calendar week.
The deductible amount of severance pay attributed to the weeks immediately following the employee's separation is calculated by subtracting 40% of the average annual wage from the total amount of severance pay paid or payable to the claimant by the employer. In this case, the total deductible amount of severance pay is $10,449.53. The number of attributable weeks immediately following [Claimant's] separation is determined by dividing the deductible severance pay by the regular full-time weekly wage of [Claimant].(Board's decision at 2.)
In this case, $885.17 and/or the remaining fraction thereof are attributable to claim week(s) ending February 16, 2013, through May 4, 2013. [Claimant's] severance pay is deductible under [s]ection 404(d)(1) of the Law, beginning with waiting week ending February 16, 2013. [Claimant's] revised weekly benefit rate is $0 for claim week(s) ending February 16, 2013, through May 4, 2013.
Accordingly, because the attributable amount of Claimant's severance pay was greater than her weekly benefit rate, the Board concluded that Claimant's severance pay disqualified her from receiving benefits and that she received non-fault overpayments subject to recoupment. (Id.)
On appeal to this Court, Claimant argues that the Board erred in applying section 404(d)(1) of the Law because her application for benefits had nothing to do with the events leading up to and basis for the Agreement. According to Claimant, the "Agreement was completely separate [from] the unemployment benefits [she] had already received." (Claimant's brief at 14.) We disagree.
Our scope of review is limited to determining whether constitutional rights were violated, whether the adjudication is in accordance with law, or whether necessary findings of fact are supported by substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa.C.S. §704.
Claimant does not challenge the Board's calculation of the pertinent base figures or its arithmetic in determining that her severance pay exceeded her benefit amount.
Pursuant to its plain language, section 404(d)(1) of the Law provides that any severance pay shall be deducted from a claimant's weekly benefit rate. 43 P.S. §804(d)(1). Section 404(d)(1.1)(i) defines severance payments as: "one or more payments made by an employer to an employe on account of separation from the service of the employer, regardless of whether the employer is legally bound by contract, statute or otherwise to make such payments." 43 P.S. §804(d)(1.1)(i). Further, section 404(d)(1.1)(iii)(A) of the Law states: "Severance pay is attributed to the day, days, week or weeks immediately following the employe's separation." 43 P.S. §804(d)(1.1)(iii)(A).
Here, in pertinent part, the Agreement states that "[Employer] has decided to terminate [Claimant's] employment . . . and the parties desire to set forth the terms and conditions of [Claimant's] termination." (Claimant's brief at Appendix B.) The Agreement also provides that the parties agree, among other things, that Claimant's last day of employment was February 12, 2013, and, as consideration for entering into the Agreement, Employer agrees to pay Claimant thirty-six weeks of salary or "Severance Payments." (Id.) No language in the Agreement supports Claimant's argument. More important, the parties could not modify the Law by agreement. There is no dispute that Claimant has received severance payments, and, regardless of the underlying reasons motivating the Agreement, the payments must be attributed to and deducted from Claimant's benefit rate beginning on the day(s) immediately following her date of separation. 43 P.S. §804(d)(1). The Board did not err in determining that section 404(d)(1) of the Law applied and that Claimant's severance payments are deductible from her benefits.
Claimant also argues that the Board erred in concluding that she received non-fault overpayments because she was never informed that the Agreement could have "potential ill effects" on benefits that she previously received. (Claimant's brief at 14.) However, section 804(b)(1) of the Law provides for future recoupment in the event that a claimant has received benefits "other than by reason of his fault," or, in other words, without any fault on the claimant's part. Although Claimant appears to have received benefits without knowledge that the Agreement would later be executed and could have an adverse effect on her benefits, section 804(b)(1) is a non-fault provision and is designed to apply to this precise situation. See Fernacz v. Unemployment Compensation Board of Review, 545 A.2d 995, 997-98 (Pa. Cmwlth. 1988) ("Since Claimant improperly received benefits but was unaware of his ineligibility, the overpayment is recoupable as a non-fault overpayment pursuant to Section 804(b)."). Therefore, Claimant's argument does not merit relief, and the Board correctly concluded that the benefits that Claimant received are subject to recoupment in accordance with section 804(b)(1) of the Law.
Because the two issues that Claimant raises on appeal lack merit, we conclude that the Board did not commit legal error.
Our affirmance is without prejudice to Claimant filing another claim for benefits if she continues to remain unemployed or becomes unemployed again in the future. --------
/s/_________
PATRICIA A. McCULLOUGH, Judge ORDER
AND NOW, this 5th day of February, 2015, the June 16, 2014 order of the Unemployment Compensation Board of Review is affirmed.
/s/_________
PATRICIA A. McCULLOUGH, Judge