Philadelphia Employment Lawyers: On-Call Pay Constitutes Retirement-Covered Compensation

In Czarnecki v. State Employees’ Ret. Bd., the Commonwealth Court of Pennsylvania held that a physician’s compensation for on-call time should be included in the calculation of his retirement benefits. 1225 C.D. 2015, 2016 WL 3615573 (Pa. Cmmw. July 6, 2016). Thomas Czarnecki was a Staff Physician of the Department of Public Welfare at the Harrisburg State Hospital from 1981 up until his retirement in 2005. Czarnecki volunteered to provide on-call service to ensure 24-hour patient care. The Department ultimately stopped reporting Czarnecki’s on-call hours to the Pennsylvania State Employees’ Retirement System, which resulted in Czarnecki not receiving retirement credit for his on-call service for the five years leading up to his retirement.

After filing a complaint regarding the calculation of his retirement benefits, the State Employees’ Retirement Board ruled that Czarnecki’s on-call time should not be used in calculating his final average salary, which is used to determine the amount of an employee’s retirement benefits. On review of the Board’s decision, the Commonwealth Court of Pennsylvania reversed and held that on-call pay does constitute retirement covered compensation since the payments for on-call service were both regularly made and contractually owed. The Court concluded that the State Employees’ Retirement System erred in excluding it from the calculation of Czarnecki’s retirement benefits and thus remanded the case for a recalculation of his benefits.

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