Legislation

For over 100 years it was accurate to say that the New Jersey Workers’ Compensation Act is a benefits law, not an employment rights law – but not for long.  On May 20, 2021, the New Jersey Assembly voted in favor of creating a hiring preference for certain employees who reach maximum medical improvement (MMI).  Under A2617 an employer with 50 or more employees must provide a hiring preference to an injured employee who has reached MMI, is unable to return to his or her own former position, but can perform the essential duties of an existing unfilled position.

When an employment law provision like this gets inserted into the New Jersey Workers’ Compensation Act, one must wonder what is the problem that the legislature is trying to resolve?

Perhaps the rationale was to reinforce existing employment laws under the New Jersey Law Against Discrimination and the ADA?   No, that cannot be the answer because the laws are different.  The NJLAD and ADA require the worker to prove a disability for coverage and the employee has the obligation to make a request for reasonable accommodation.  A2617 does not contain a requirement that covered employees must prove a disability or request a reasonable accommodation. It seems to cover any and all employees who reach MMI and who cannot perform their former job –  but only if their injury arose from work.

Perhaps the rationale was to solve the problem of employees not being able to find new jobs? The sponsors wrote, “Workers’ compensation injuries can be traumatic and devastating.  No injured employee should be left without options for work?”  This cannot be the answer either because the US Bureau of Labor Statistics announced on March 31, 2021, that the number of unfilled jobs in the United States is 8.1 million.  New Jersey’s population is 3% of the nation’s total.  Using three percent as a ballpark percentage for New Jersey, there would be 240,000 unfilled jobs in this state. It is easier today to find a job than it has been in half a century.

Maybe the rationale was to help a narrow category of workers who are financially disadvantaged by injuries? No, that does not make sense. Consider two employees with identical low back injuries who require fusion surgery at L4-5 and L5-S1.  Employee A falls on January 1, 2021 on his deck at home and has fusion surgery. Employee B falls on January 1, 2021 at his work desk and has the same fusion surgery.  Both reach MMI in May 2021.  Employee A is not eligible for the $969 per week for lost time benefits (temporary disability benefits) because the injury occurred at home.  Employee A is also not eligible for full medical coverage and must pay expensive deductibles and co-pays. Finally, Employee A is not eligible for partial permanent disability benefits in workers’ compensation. 

By contrast, Employee B gets $969 per week for temporary disability benefits, has no medical bills to pay under workers’ compensation and eventually settles the workers’ compensation case for 40% permanent partial disability or $124,080 – all of which is tax free.   So which worker did the legislature attempt to provide the job preference to? You guessed it: the one with the advantages of workers’ compensation coverage.

When it comes to the concept of a hiring preference for workers with injuries, there is no logical rationale to distinguish between seriously injured workers who get hurt at home versus those who get hurt at work.  The NJLAD doesn’t make that distinction.  The ADA doesn’t make that distinction.   These employment laws are already adequate, and there is no need for A2617. 

What does this bill do for the welfare of the state? Assuming A2617 in fact creates rights that did not previously exist for employees who cannot perform their job duties due to work-related injuries, one must wonder why would the legislature subject employers to potential for more litigation over and above the cost of workers’ compensation when so many employers in the northeast are already fleeing to more friendly business climates in the south?

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On Tuesday, April 20, 2021, New Jersey Governor Phil Murphy signed into law a bill co-sponsored by Senators Troy Singleton and Dawn Addiego.  The bill will provide weekly supplemental benefits to surviving dependents of essential employees who contracted COVID-19 through work.  The benefits will be paid by the New Jersey Second Injury Fund.

The prerequisites for a dependent to receive this supplemental benefit are that the decedent must have been an essential employee under New Jersey law, and there must be a court order in the form of a dependency award in the Division of Workers’ Compensation.  While the law itself does not mention the need for a dependency award, the Office of Special Compensation Funds advised Capehart partner Stephen Fannon, Esq. that dependency judgments must first be entered before the Second Injury Fund can pay the supplemental benefits. This is similar to the public safety law, N.J.S.A. 34:15-95.6.

The Office of Special Compensation Funds also advised that the petitioner must fill out several documents which are listed on the Office’s website before the supplemental payments will be made.  The expectation is that counsel for petitioner will fill out the calculation sheet also located on the website of the Office of Special Compensation Funds.  None of this is in the actual law.

The formula for the supplement requires that one should use the workers’ compensation weekly dependency benefit initially awarded as the numerator and use the state’s maximum workers’ compensation death benefit as the denominator.  In 2021 the maximum death rate is $969. Consider then a hypothetical case where an essential employee dies in 2021 from COVID-19. The employee’s wage was $830.57 giving rise to a dependency rate of $581.40, which is 60% of the maximum death rate of $969.  Every year as the maximum death rate rises, a supplemental payment will be made to the dependent so that the dependent’s benefits never drop below 60% of the maximum death rate in effect for subsequent years.  Without that supplement, the dependent’s rate would remain the same every year, as it does for almost all other dependents in New Jersey.

The notice provision of the law was not well thought out. The new law states that the Second Injury Fund must be notified by the insurance carrier or self-insured employer of the need to have the Second Injury Fund make supplemental benefit payments. That notice must be completed not later than the 60^th day after the “date on which it is determined that the payment of supplemental benefits is required pursuant to this section.”  That date clearly will be the date of the dependency award entered by the Judge of Compensation.

But the Office of Special Compensation Funds has already advised that petitioner’s attorney must complete certain forms on their website before payments will be made.  It would seem then that the notice will be coming from petitioner’s attorney.  Yet the law goes on to provide ominously, “If the insurance carrier or self-insured employer fails to notify the division and that failure results in the payment of an incorrect amount of benefits, the liability for the payment of the supplemental benefits shall be transferred from the Second Injury Fund to the employer until the time at which the insurance carrier or self-insured employer provides the required notice.”

The penalty language imposed on the carrier or employer makes absolutely no sense since the forms that need to be completed will be executed by petitioner’s attorney, who will be providing notice through those forms, and no payment can be made until the Fund receives those forms.  One may surmise that there was a communication failure between the bill sponsors and the Office of Special Compensation Funds.  If delays are occasioned by the failure of petitioner’s attorney to submit those forms, why would the insurance carrier or employer be penalized for not giving timely notice?  Given this legislative snafu, employers, self-insureds and their counsel will be well advised to provide notice to the Fund in writing by certified mail immediately after a dependency award has been executed by the Judge — even though the employer and carrier have no control over the submission of the necessary forms that will trigger the supplemental payments. 

What about all the cases that have already been accepted in the past year involving essential employees but have never gone through court?  The Office of Special Compensation Funds advised my partner, Steven Fannon, that court orders will need to be entered for dependents to receive the supplemental payments. Claim petitions will need to be filed to convert the voluntary tender of dependency benefits into a dependency order.

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Earlier this year the new hand and foot bill became effective on January 21, 2020.  This bill marked a significant change in the New Jersey Workers’ Compensation Act.  The language was unambiguous in augmenting the number of weeks for injuries of the hand, foot and fingers.  However, the language was less than clear concerning its effective date. Did it apply only to cases filed after January 21, 2020?  Did it apply to all cases pending as of January 21, 2020?

On October 30, 2020, Governor Phil Murphy signed legislation amending L. 2019, c. 387 to clarify that the law was intended to apply to cases that were pending in the Division but not yet settled and cases that were filed on or after the date of enactment.  Now the question is what do practitioners and judges do in regard to orders that were entered over the past 10 months using the pre-2020 rates for a hand or foot injury?

Before addressing this issue, let’s recap how this law changes New Jersey Workers’ Compensation Act.  Until the passage of this law, under N.J.S.A. 34:15-12 an injured worker would receive 2.45 weeks for each percentage of compensation for hand injuries.  The law increased the weeks to 2.6 for each percentage of compensation until the level of 25%.  At that level and above, each percentage gets compensated at 3 weeks.

Similarly, the new law raised the long-standing compensation for foot injuries from 2.3 weeks per percentage to 2.5 weeks until the level of 25%. At that level and above, each percentage gets compensation at 2.85 weeks.   It should be noted that the hand and foot law does not apply to reopener claims. 

The law made some other minor changes such as raising the weeks for finger injuries and raising the death benefit to $5,000 from $3,500 for a person who died from any cause other than the accident or occupational disease during the period of payments of permanent injury.

When the law passed in January, judges and practitioners seemed to split fairly evenly around the state on whether the law should only apply to cases newly filed after January 21, 2020 as opposed to cases pending in the Division in January 2020 but filed before that date.  Given the lack of consensus, many pending cases were settled using pre-2020 rates.  That meant somewhat less money in permanency awards for petitioners.

In light of the recent legislation from the Governor clarifying the effective date of this law, employers and practitioners are now asking the following questions:

1. Did the parties expressly agree to use the pre-2020 rates as part of negotiations and was this agreement made part of the court record?
2. Did petitioner reserve rights to revisit the issue of the law’s effective date in the event of clarification from the Appellate Division or the Governor?
3. Was the issue never discussed or addressed at all on the record when the case settled?

In the first situation, respondents will argue that the order should not now be amended.  In the second and third situations, applications to modify the award may be filed, or the parties may even consent in some cases to amend the prior order should they agree.  When there is a genuine dispute, it will become important to obtain a copy of the transcript at the time the order was entered to see what the parties stipulated to on the record and whether rights were reserved.  Correspondence between counsel before the date of settlement may also be relevant in determining the intent of the parties.  Given that hand and foot injuries comprise a large percentage of New Jersey claims, one can anticipate significant disputes over the ensuing months.

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The New Jersey Assembly Appropriations Committee passed A1708 on October 26, 2020, setting the stage for an eventual full Assembly vote on an important piece of legislation concerning the obligation of workers’ compensation carriers and automobile insurers to pay for costs of medical marijuana.  Strangely enough, this Bill is being advanced at the same time as the New Jersey Supreme Court is scheduled to hear oral arguments in the case of Hager v. M&K Construction, 462 N.J. Super. 146 (App. Div.), certif. granted, 241 N.J. 484 (2020).  This case deals directly with several issues addressed in A 1708.

The proposed Assembly Bill states: “Notwithstanding the provisions of subsection a. of this section, an employer or workers’ compensation carrier or private passenger automobile insurance carrier shall provide coverage for costs associated with the medical use of cannabis . . . “ provided that the insured or the employee is a qualifying patient authorized for the medical use of cannabis.

The Bill further provides, “c.  Notwithstanding any provision of the insurance policy to the contrary, if for any reason payment by the insurer to the medical cannabis dispensary is not feasible, the insurer shall remit directly to the insured the costs for any benefits associated with the medical use of cannabis upon proof of payment by the insured to the medical cannabis dispensary.”

A 1708 seems premature given that the New Jersey Supreme Court has taken certification in Hager.  In this January 13, 2020 published case, the Appellate Division ruled for petitioner that he should be reimbursed by the workers’ compensation carrier for his expenses in connection with the use of medical marijuana for chronic pain.  The Appellate Division addressed five separate arguments, some or all of which are likely to be addressed by the New Jersey Supreme Court.  The issues addressed by the Appellate Division in Hager are set forth below:

1) Does the Controlled Substance Act (CSA) which makes it a crime to manufacture, possess or distribute marijuana, preempt the New Jersey MMA?

2) Does the MMA violate the CSA by aiding and abetting in the commission of a crime?

3) Does compliance with the court order expose M&K to the threat of federal prosecution?

4) Should a workers’ compensation insurer be treated the same under the MMA as a private health insurer?

5) Can medical marijuana be considered reasonable and necessary under the New Jersey Workers’ Compensation Act?

It would seem to make more sense and to accord appropriate respect to the judicial process for the legislature to wait for a very significant decision from our highest state court, given potential constitutional issues have been raised in this appeal.

The post Proposed Bill to Require Carriers to Pay for Costs of Medical Marijuana Passes Committee While the New Jersey Supreme Court is Scheduled to Hear Oral Arguments on the Issue appeared first on NJ Workers' Comp Blog.

On Monday, September 14, 2020, New Jersey Governor Phil Murphy signed S2380 dealing with COVID-19 and essential workers in respect to workers’ compensation benefits.  The bill was signed on the very last day before the bill would have automatically become law. 

It is important to consider what this bill does and what it does not do.  The essence of the bill is that it creates a rebuttable presumption for essential employees that their contraction of the coronavirus is employment related for workers’ compensation purposes.   The employer can rebut the presumption by a preponderance of the evidence (more than 50%) by showing that the worker was not exposed to the disease while working in the place of employment.  Essential workers are defined as:

1. Public safety workers or first responders;
2. Those involved in providing medical and other healthcare services, emergency transportation, social services, and other care services, including services provided in health care facilities, residential facilities or homes;
3. Those who perform functions which involve physical proximity to members of the public and are essential to the public’s health, safety, and welfare, including transportation services, hotel and other residential services, financial services, and the production, preparation, storage, sale and distribution of essential goods such as food, beverages, medicine, fuel, and supplies for conducting essential business and work at home, or;
4. Anyone deemed an essential employee by the public authority declaring the state of emergency

The effect of a legal presumption is to shift the burden of proof to the employer to disprove the case. Normally the injured worker has the burden of proving his or her case by a preponderance of the evidence.  If a worker contracts COVID-19 and meets one of the categories above, then the workers’ compensation claim will be found to have arisen from work, unless the employer can rebut the claim by showing the worker contracted the disease in a non-work scenario.  Disproving the case may involve proof that the worker more likely contracted the disease from a family member, from an outside gathering, from travel out of state, or perhaps proof that there was no exposure to the coronavirus at work.

Readers need to reflect on what the bill does not do. A presumption of compensability is not a presumption of impairment.  There is no presumption of impairment under the law.  To receive an award of permanent partial disability in New Jersey, one must prove a work-related impairment which restricts the function of the body and causes either a lessening to a material degree of working ability or a substantial impairment of non-work functions.  If one has fully recovered from the illness, proof of impairment will often be very difficult.  Many of the claim petitions that have been filed in New Jersey do not indicate any particular impairment at all, just referring to “residuals of COVID-19.”  Some claim petitions refer to “respiratory illness” without any treatment having occurred by a pulmonologist.

The first issue is therefore whether the illness arose from work.  The presumption helps the injured worker in close cases on the issue of connection to work.  However, the second proof issue will be difficult for many of those who have recovered from the coronavirus, namely proof by objective evidence that the illness has caused a permanent partial or total impairment. That will require good science and good medicine.   The impairment must be a present one, not merely a potential for injury in the future. 

The effective date of the bill is March 9, 2020.  Clients have inquired whether this means that they should reevaluate all the COVID-19 cases that they made decisions on during the past six months.  The bill does not require this, and there is really little to be gained by doing this.  If there is a dispute over workers’ compensation benefits, the injured worker will likely address the issue with the employer or file a claim petition to obtain medical, temporary or permanent partial disability benefits.  Many recovered COVID-19 cases simply do not involve a dispute over workers’ compensation benefits.  Notably, numerous dependency claims have already been filed long before the passage of S2380.  Employers can expect the filing of more COVID-19 cases as a result of the passage of S2380, but the bill does not make it any easier for claimants to prove objective evidence of an impairment that meets the Supreme Court standard set forth in Perez v. Pantasote, 95 N.J. 105 (1984).

The post The Essential Workers Legislation In New Jersey: What It Means and What It Does Not Mean appeared first on NJ Workers' Comp Blog.

Many readers have asked about the status of two very significant bills affecting New Jersey workers’ compensation practice.  They are S2380 and A4134.

S2380 – The Essential Employees Bill

We are down to the wire on S2380.  The Governor has until September 13, 2020 either to sign this bill or veto it; otherwise, S2380 will become law automatically.  This bill creates a rebuttable presumption for essential employees that their contraction of the coronavirus is work related.  The employer can rebut the presumption by a preponderance of the evidence (more than 50%) by showing that the worker was not exposed to the disease while working in the place of employment.  Essential workers are defined as:

1. Public safety workers or first responders;
2. Those involved in providing medical and other healthcare services, emergency transportation, social services, and other care services, including services provided in health care facilities, residential facilities or homes;
3. Those who perform functions which involve physical proximity to members of the public and are essential to the public’s health, safety, and welfare, including transportation services, hotel and other residential services, financial services, and the production, preparation, storage, sale and distribution of essential goods such as food, beverages, medicine, fuel, and supplies for conducting essential business and work at home, or;
4. Anyone deemed an essential employee by the public authority declaring the state of emergency.

A4134 – Clarification of Hand And Foot Bill On Retroactivity

This Assembly bill has attracted less attention than S2380, but it is important.  It clarifies whether the legislation that became law on January 21, 2020 had secondary retroactive effect.  The bill created enhanced compensation for hand, foot and finger injuries. However, the bill contained no clear language on which cases it applied to.  Questions arose immediately among judges, claimants, practitioners, employers, carriers, and third party administrators regarding the application of the law to claim petitions pending in the Division of Workers’ Compensation as of January 21, 2020 but filed before the effective date of the law.

This bill clearly states that the enhanced compensation for hand, foot and finger injuries applies to all cases pending but not yet settled or filed on or after the date of enactment  –  January 21, 2020.  However, the bill states that the law will not be applicable to cases which have been reopened.  The law obviously would not apply to cases that were settled before January 21, 2020.

This bill is limited to the issue of secondary retroactivity and was passed by the Assembly on August 27, 2020.  It will be scheduled next for a hearing before the Senate.  Readers should be aware that another aspect of this bill raises the cost of burial expenses in cases of compensable accident or occupational disease from $3,500 to $5,000, and that provision too would be applicable to claim petitions pending in the Division of Workers’ Compensation as of January 21, 2020.

Readers who are interested in the method used to compute the enhanced compensation for hand, foot and finger injuries can view the January 23, 2020 blog addressing this subject.

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A3945 was signed into law on July 1, 2020 by New Jersey Governor Phil Murphy.  The law provides for both an accidental disability pension for an eligible member who becomes totally disabled from COVID-19 as well as a death benefit for eligible beneficiaries if the covered member should die from COVID-19.  

This new pension law applies to certain members of three pension systems:  PERS (Public Employees’ Retirement System), PFRS (Police and Firefighters’ Retirement System), and SPRS (State Police Retirement System).  Those covered by the new pension law are solely law enforcement officers, state troopers, firefighters and emergency medical responders who are enrolled in one of the three pensions systems.

COVID-19 claims are normally considered occupational exposure claims for workers’ compensation purposes, but for pension purposes A3945 transmutes such claims into traumatic events for those pension applicants covered under this law.  This is crucial because an accidental disability pension is only available for traumatic work-related events.  Under current law members of PFRS and SPRS who are eligible for accidental disability retirement benefits receive a pension of 66% of their final compensation.  In addition, an amount that is equal to three and a half times their final compensation is paid to the member’s beneficiary on death.   In the case of accidental death, eligible spouses or partners of PFRS and SPRS members receive an annual pension equal to 70% of the member’s final compensation and an amount that is equal to three and a half times the compensation paid in the last year of service.  Eligible widows or widowers of PERS members are paid an annual pension of 50% of the compensation paid in the last year of service.

Below are the only conditions that must be met for the COVID-19 accidental disability pension and death benefits:

Accidental Disability Pension:

1. The law enforcement officer, firefighter, or emergency medical responder must sustain a total and permanent disability from an on-the-job COVID-19 illness.  Such an illness will be considered “traumatic” for purposes of his or her pension application.
2. The applicant must begin showing symptoms within 14 days of interacting with the public or supervising other personnel who interacted with the public as part of their job.
3. There must be proof of a positive COVID-19 test.
4. The exposure must occur beginning March 9, 2020 and prior to the termination date of either the public health emergency or state of emergency, whichever occurs later.

Death Benefit:

1. The eligible widow or widower must prove that the deceased law enforcement officer, firefighter, or emergency medical responder contracted COVID-19 during the period of the public health emergency beginning March 9, 2020.
2. The decedent must have died as a result of the disease.
3. The decedent must have begun to show symptoms within 14 days of interacting with the public or supervising other personnel who interacted with the public as part of their job.

An unusual provision of this COVID-19 pension law is that the covered pension applicant does not have to offer any proof at all that “more likely than not” he or she contracted the disease in the line of duty.  That is the requirement for all other accidental disability pension applications.  This law is much stronger than so-called rebuttable presumption laws being passed around the United States. This is an absolute presumption law.   Evidence presented by the public entity that the member developed the disease at home or outside work is not relevant.  There are only two relevant issues: first, did the pension applicant develop COVID-19 symptoms within 14 days of interacting with the public or supervising other personnel who interacted with the public as part of their job? If the answer is yes, that satisfies the on-the-job criterion.  Second, does the Division of Pensions and Benefits agree with the applicant’s medical report stating that the member is totally disabled from COVID-19?

The law provides that new onset diseases or chronic psychological disease that may appear later in possible connection to prior COVID-19 exposure and subsequent recovery will not be considered a permanent and total disability caused by the virus.  However, the law does apply to complications from COVID-19 or aggravation or acceleration of a preexisting condition.  The distinction is between “new onset diseases” (meaning a disease that the individual never had been diagnosed with before) as opposed to medical conditions that were already diagnosed prior to the COVID-19 exposure but were aggravated by the virus.

The new law applies to any law enforcement officer, firefighter, and emergency medical responder who was performing regular or assigned duties but not yet enrolled in either PFRS, PERS or SPRS who would otherwise be eligible for benefits from this Bill. 

The law will not apply to any member who has already retired and subsequently returned to employment pursuant to the Executive Order without reemployment to assist during the public health emergency.

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