Legislation

On July 20, 2023 Governor Murphy approved an amendment to N.J.S.A. 34:15-64 raising the maximum amount that physicians may be paid for opinions regarding need for treatment or estimates of permanent disability.  The maximum fee had been previously set at $600.  Under the new amendment, the maximum fee is now $1,000.  The goal of the bill was to provide parity between the amounts that physicians charge respondents for these kinds of medical evaluations and the amount physicians charge claimants.

Employers should take note of this change because the Division of Workers’ Compensation in New Jersey has a customary practice of assessing half of the cost of the examination of claimants on the employer in a percentage of disability settlement.  For example, if the expert for petitioner charges $600 for an examination and report, the employer would pay $300 and the employee would pay $300.  Now the Judge of Compensation can award $1,000 to the physician with $500 assessed against the employer and $500 assessed against the employee.  That amounts to about a 65% increase for employer and employee.  On Section 20 settlements, the employee pays the entire cost of his or her permanency examination.  There are far more percentage settlements in New Jersey than Section 20 settlements, perhaps two to one in favor of percentage settlements.

The question most asked is this: “Where does it say in the law that the employer must pay half of the cost of the petitioner’s examination on a percentage settlement?”  The answer is that there is no such provision in the law.  No statute in New Jersey requires the employer to pay part of the cost of the employee’s medical report.  There is no regulation that requires the employee to pay part of the cost of the employee’s medical report.  It is just an unwritten practice that has prevailed for many decades. I do not know when this custom commenced in New Jersey.

Another key question: “Does this new amendment affect cases that were filed before the Governor signed the law or only cases that are filed after the law was passed?”  The law says this Act shall take effect immediately.   It makes no comment on retroactivity. The Legislature has a habit of passing laws without addressing specifically when the law is meant to apply.   The language used in this bill is quite common in terms of taking effect immediately, but what was the intent of the legislators as to cases that were filed years ago but not yet resolved?  Does it matter if the medical examination already took place before the new amendment passed on July 20, 2023?

As a general rule, when there is no specific language prohibiting retroactivity, most laws are given secondary retroactivity as a practical solution rather than go back to the Legislature for clarification.  The term secondary retroactivity means that cases that are already in the system when a new law is passed generally get the benefit of the new legal provision.  But no one knows what the intent of the Legislature was specifically on this issue.  Cases that were settled before the law was passed this year and in prior years would not be affected by this new provision.  That is true retroactivity.  But this is certainly an area of ambiguity that should have been clarified. There may need to be guidance from the Division or the Legislature on this issue.  Does it apply to exams that took place before July 20, 2023?  Does it apply to all cases that were active in the Division but only those exams taking place after July 20, 2023?  We don’t know.

The amendment also has a new provision stating as follows: “A psychologist, nurse practitioner, or licensed clinical social worker who provides psychological treatment may be paid a fee, as permitted in accordance with the provisions of this section, for a report or testimony concerning that provider’s course of treatment of the injured worker in that provider’s role as a provider of treatment.”    This provision reflects the changing nature of medicine in New Jersey and in other states.  There are more and more cases involving care provided by psychologists, nurse practitioners and licensed clinical social workers.  In fact, many occupational medical providers retained by respondents have moved to expand potential medical providers beyond only physicians who have been graduated from medical school. 

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In the first few days of 2022, two major legislative developments have significantly impacted workers’ compensation law.  The legislation effectively repealing the Supreme Court decision in Hersh v. County of Morris, 217 N.J. 236 (2014) will have a long-term impact on workers’ compensation in New Jersey; the resumption of the public health emergency will likely have only a short-term impact.

Governor Signs S771

Governor Phil Murphy signed S771 on January 10, 2022, which added the following new language in N.J.S.A. 34: 15-36 in relation to compensability of accidents in parking lots:

Employment shall also be deemed to commence, if an employer provides or designates a parking area for use by an employee, when an employee arrives at the parking area prior to reporting for work and shall terminate when an employee leaves the parking area at the end of a work period; provided that, if the site of the parking area is separate from the place of employment, an employee shall be deemed to be in the course of employment while the employee travels directly from the parking area to the place of employment prior to reporting for work and while the employee travels directly from the place of employment to the parking area at the end of a work period.

This new provision was a response to the aforesaid Hersh case, which involved an injury to an employee of the County of Morris, which rented space in a private garage for 65 employees.  The decision in Hersh created a great deal of controversy and discussion.  The facts were that Mrs. Hersh could not park in the county building next to her office because she lacked seniority, so she parked in the private garage in one of the 65 leased spaces.  She then walked one-half block to Washington Street.  While crossing the street, she was struck and was seriously injured by a motor vehicle which had run a red light. The petitioner’s injuries were found not compensable because the County did not own the garage and did not control the garage.  The Supreme Court found that the County did not derive a direct business interest from paying for employees to park in the private garage and noted that the accident occurred in a public street. The Court also commented that there was also no added or special hazard in crossing the public street.

                The new legislation is significant in the following respects:

1. It may not matter any longer that the employer does not own or control the parking lot, particularly if the parking area is not adjacent to the employer’s place of business;
2. It will also not matter that the injury occurred while the employee was walking on public property on the way to the employer’s place of business from a lot designated or provided by the employer. This accident is now compensable.
3. What matters is whether the employer “provides or designates a parking area for use by an employee.”

In examining this bolded phrase more closely, one can say that the word “designates” is fairly clear in meaning.  A parking area marked off for one employer’s use for its employees will clearly fall within this definition.   But that has been the law for a long time!  There was no need for a new law to tell us the designation of a parking area by an employer means controlling parking.  The problematic word is the verb “provides.”  What is the legal definition of “provides?”  Well, “provides” is not really a word with a legal definition at all.  The dictionary definition is “makes available for use.”  Clearly, that applies to the situation in Hersh because the County leased and therefore provided parking.  But many employers lease space in a building and do not designate any specific parking area alongside the place of employment.  Yet there may be ample parking.  When asked by employees or job applicants about parking, such employers may respond that parking is provided, simply meaning that employees will not have to pay for parking.   Does an employer “provide” parking when the employer makes sure in its lease that its employees have access to parking lots at no cost to the employee, even if the employer does not own the lot or control the lot?

What if judges interpret the word “provided” in this expansive way?  Then virtually all injuries in parking lots will be found compensable now, whether the employer is just a tenant in the building or not.  That results in a complete reversal of the 1979 Amendments.   Only injuries occurring to employees who park in public streets will then be found non-compensable.  Such a reading would clearly conflict with the most important paragraph in N.J.S.A 34:15-36 in respect to commencement of employment:

Employment shall be deemed to commence when an employee arrives at the employer’s place of employment to report for work and shall terminate when the employee leaves the employer’s place of employment, excluding areas not under the control of the employer…”  This language is the heart of the so-called “premises rule.”  The new parking language did not remove the 1979 definition of commencement of employment. It is still there.  Control or the absence of control is essential to the definition.  The key language is: “excluding areas not under the control of the employer.” 

How does one square this language about areas not under the control of the employer with the language in the new law about an employer which provides a parking area?  Does the employer have to argue that the landlord, not the tenant, provides the parking area? If that is the argument, the counter argument will be that all employers which lease space pay for common area maintenance charges and therefore indirectly provide parking.  Using the wrong word in a statute can be like pulling on a thread.

In the opinion of this practitioner, S771 conflicts with the premises rule. The word “provides” is the problematic word that will lead to a plethora of appeals.  Counsel for petitioners injured in parking lots where space is leased are going to argue for broad interpretation of “provides,” and employers are going to argue that the law still excludes areas not under the control of the employer.  One does not need a crystal ball to predict that the Supreme Court ironically will someday have to resolve an inherent conflict created by a legislative response to negate the Supreme Court’s own 2014 decision!   My own guess is that the sponsors of this new law were thinking of how to counter the result in Hersh, which involved off-site parking leased by the employer.  If the law had just focused on off-site parking areas, there would not likely be a wave of future litigation over the meaning of “provides.” 

One other point is worth mentioning about S771, and it is a fairly common problem encountered with workers’ compensation legislation.  Just as with the passage of the Hand and Foot Bill two years ago, this legislation fails to make clear which cases will be covered.  By stating “this law shall take effect immediately,” the legislation did not answer whether the new law applies only to cases that are filed after January 10, 2022 or applies to all cases presently pending in the Division as of January 10, 2022.

The Resumption Of A Public Health Emergency

Executive Order 280 signed by Governor Murphy this week reinstates a public health emergency in New Jersey.  By way of background, Governor Murphy signed S2380 on September 14, 2021, which defined certain Essential Workers who contracted COVID-19 at work.  The law created a rebuttable presumption that the virus was work related for such Essential Employees.  The Essential Employee law specifically referenced the contraction of COVID-19 during the public health emergency.

In June 2021, Governor Murphy declared that the public health emergency had ended. The Governor did not mention anything about the end of the legal presumption, but many practitioners, including the undersigned, reasoned that there was no longer a presumption since there was no longer a public health emergency. This week’s renewal of the public health emergency will certainly be viewed by judges of compensation to mean that the presumption of compensability again prevails.  As readers know, this legal presumption shifts the burden of proof to the employer to disprove that the virus was contracted at work.  There is, however, no presumption of impairment. The burden of proof remains on the injured employee to prove a compensable impairment for purposes of obtaining an award of permanent partial or total disability benefits.

The post Key New Jersey Legislation In 2022: Expansion Of Compensability Of Parking Lot Injuries And Resumption Of Public Health Emergency appeared first on NJ Workers' Comp Blog.

Readers of this blog are aware that earlier this year the New Jersey Assembly introduced legislation to create employment rights under the New Jersey Workers’ Compensation Act for workers who reach maximal medical improvement but cannot perform their job any longer.  Many employers have written to say they were shocked this bill was being introduced.  This week Governor Phil Murphy signed into law A2617, which provides as follows:

“Following a work-related injury, an employer shall provide a hiring preference to an employee who has reached maximum medical improvement (MMI) and is unable to return to the position at which the employee was previously employed for any existing, unfilled position offered by the employer for which the employee can perform the essential functions of the position.”

The bill, which applies to employers with more than 50 employees, is notable for what it does not say and what it does not answer. 

1. Does it mean that if five applicants apply for a job and one of them is an existing employee who has reached MMI following a work-related injury, the job must go to the employee who is at MMI? Are there any circumstances where the employer can refuse to provide the open job to the existing employee?
2. Does it mean that an employer is insulated from a law suit if the employer interviews each of the five applicants and then decides to make an offer to one of the non-employees based on a good faith perception of better credentials or qualifications? 
3. Does it mean that the employer has an affirmative duty to advise any employee with a work-related injury who cannot perform his or her job of all other jobs that are now vacant or may be vacant in the near future before making termination decisions?  The answer is probably yes.
4. Under the ADA or NJLAD the employee must make a request for reasonable accommodation, but this law doesn’t say anything about that.  Does this law really obviate the need for an employee to make a request for accommodation and instead put the burden on the employer to initiate a discussion of all open jobs?  Unfortunately, this seems to be the case. There will need to be great communication among department heads, HR and workers’ compensation professionals going forward.
5. Since the law is now part of the NJ Workers’ Compensation Act, does the Judge of Compensation have the power to enforce this provision?  Or must an aggrieved employee file a civil suit?  Until now, a Judge of Compensation has had virtually no jurisdiction over employment issues.

The law says nothing about remedies, penalties, counsel fees for violations, or procedures to enforce this provision. The timing of the law could not be more ironic: there are estimated to be 11 million unfilled jobs in the United States, and hundreds of thousands of unfilled jobs in New Jersey.  It has never been easier to find a job than it is right now. 

This law does acknowledge that employers do not have to create a new position to accommodate an employee, but of course that is nothing new either.  That statement simply reflects existing law under the New Jersey Law Against Discrimination and the ADA. 

For defense lawyers and workers’ compensation practitioners, this provision is worrisome because the preference language can be stretched in any direction.  One must assume that legislators would not pass a soundbite law that added nothing to existing law.

An amendment to the original draft was added late to state, “Nothing in this section shall be construed to impair or affect any right of an individual with a disability to a reasonable accommodation under the ‘Law Against Discrimination.’”   But that raises the ultimate question.  What rights does this law provide over and above those existing rights that employees already had under the ADA or NJLAD?   What hole in the legal landscape was this provision designed to fill?

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