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A Practitioner’s Guide to Benefits Provided Under New Jersey Workers’ Compensation

There are three types of benefits provided by employers to employees in NJ workers’ compensation, in those cases that are accepted and not being questioned: 1. Medical benefits (a major benefit to employers in New Jersey is that the employer directs the medical care); 2. Temporary disability (“TTD”), which is for wage loss while an employee is placed out of work by the authorized treatment provider; and 3. Permanency benefits, representing an amount awarded to the employee for functional loss. These benefits are explored in more detail below.

  1. Medical Benefits: Pursuant to N.J.S.A. 34:15-15, the employer directs the medical care and pays for reasonable and necessary care. This is a major benefit to employers in New Jersey because it means that the employer chooses the doctors and facilities the employee treats with. Pursuant to Section 15, an employer can direct medical care and provide medical benefits on a without prejudice basis without admitting liability. This right to direct care is a big advantage to employers in New Jersey, and is not always the case in other jurisdictions. Of particular advantage to employers also is N.J.S.A. 34:15-19, which states that an employer can require an employee to be examined at reasonable place and time in the state of New Jersey; an employee’s failure to attend exams is a basis for termination of TTD benefits.
  2. TTD benefits: Medical benefits and TTD are connected. TTD benefits are wage replacement benefits paid to the employee while the employee is placed out of work by the authorized physician. Pursuant to N.J.S.A. 34:15-14, no TTD is owed until the employee has been out of work for seven days; after the seventh day, TTD is owed and is retroactive to the first day out of work; the seven days of out work do not need to be consecutive. TTD can be stopped when the employee can return to gainful employment (not necessarily the former job) OR when the employee has reached a medical plateau (MMI). TTD may also be terminated if there is no evidence of actual wage loss, if there is non-compliance with treatment, and if light duty is offered and rejected by the employee. N.J.S.A. 34:15-16 states that permanency begins consecutively with TTD and after TTD ends. This means that under Orders Approving Settlement, which are permanency Awards paid over a certain number of weeks, the permanency payments are retroactive to the first day after the last day of TTD issued.
  3. Permanency: These benefits are defined under N.J.S.A. 34:15-36. In order to be eligible for permanency benefits, an employee must show that the work injury resulted in objective medical evidence which restricts the function of the body or its members or organs AND a lessening to a material degree of working ability OR a substantial impact on non-work aspects of life (i.e., significant changes in lifestyle). Under Section 36, an impairment must be disabling for an award to be rendered. Regarding the material impact on working ability or activities of daily living, the employee’s level of function pre-injury and post-injury needs to be compared. Just as Section 36 states, “injuries such as minor lacerations, minor contusions, minor sprains, and scars which do not constitute significant permanent disfigurement, and occupational disease of a minor nature such as mild dermatitis and mild bronchitis shall not constitute permanent disability,” those injuries which only have minor impact on working ability or non-work aspects of life shall not constitute permanent disability.

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A Practitioner’s Guide to Prior Injuries and Credits

Practical Advice in New Jersey Workers’ Compensation

Pursuant to N.J.S.A. 34:15-12(d), “if previous loss of function to the body, head, a member or an organ is established by competent evidence, and subsequently an injury or occupational disease arising out of and in the course of an employment occurs to that part of the body, head, member or organ, where there was a previous loss of function, then the employer or the employer’s insurance carrier at the time of the subsequent injury or occupational disease shall not be liable for any such loss and credit shall be given the employer or the employer’s insurance carrier for the previous loss of function and the burden of proof in such matters shall rest on the employer.”

Essentially, this provision provides that if an employee has a prior relevant injury which resulted in prior loss of function to the same body part injured in the work injury, Respondent is entitled to a credit (which results in money off the overall Award) for the prior injury or pre-existing disabling medical condition. Of particular note, the burden rests on Respondent to demonstrate and prove a prior injury and prior loss of function. Proper medical and factual discovery and investigation is extremely important in this regard, as evidence of prior functional loss can save Respondent from incorrectly paying for, and assuming liability for, pre-existing issues.

Respondent must demonstrate through medical discovery and medical records that the employee has a prior, relevant medical issue and that the prior issue was disabling in order to successfully argue for a credit. It is most helpful when an accurate and detailed history is taken from the employee at the outset of treatment following a work injury.

In some situations, the credit entitlement is easier to demonstrate, and not all prior issues are necessarily applicable to Respondent’s credit entitlement.

Below are hypothetical situations where Respondent may, or may not, be in a position to argue for a credit on permanency.

Scenario 1: Robert has a work injury of January 1, 2022 to the lumbar spine and a lumbar spine MRI shows herniations at L3-L4 and L4-L5. Robert has a prior workers’ compensation Award for 15% partial total from a work accident of January 5, 2019 for the lumbar spine for a bulge at L4-L5.

Here, Respondent is entitled to a credit for the prior bulge at L4-L5. The credit is likely to be 15% partial total for this aspect/ level of the case, as the prior workers’ compensation Award was for 15% partial total for the lumbar spine for a bulge at L4-L5.

This can result in significant savings to Respondent, as for example, an Award of 30% partial total at 2022 rates is $62,568.00. An Award of 30% partial total, credit 15% partial total is $37,026.00.

Scenario 2: Charlie has a work injury of January 1, 2022 to the lumbar spine and a lumbar spine MRI shows herniations at L3-L4 and L4-L5. Robert has a prior non-work related injury to the lumbar spine, and a prior MRI revealed a prior bulge at L4-L5.

This is similar to Scenario 1, other than the fact that Charlie’s prior injury was not work related, and there is no prior workers’ compensation Award for this prior injury. However, Respondent is still entitled to a credit, which is somewhat more negotiable than the credit applied in Scenario 1, for Charlie’s prior issues in the lumbar spine and at L4-L5.

Scenario 3: Peter has a work injury of February 14, 2022 where he injures his right shoulder, neck, and right arm. Prior to the work injury, on December 24, 2021, petitioner underwent a right shoulder surgery. Other than the prior right shoulder surgery, petitioner has had no prior medical issues or injuries.

Here, Respondent is entitled to a credit as to the right shoulder aspect of the claim. Regarding the neck and right arm, if Peter truly has no relevant prior history, Respondent is not entitled to a credit for these aspects of the claim.

Employers should keep in mind that potential credit entitlement can depend on a number of factors including length of time since any prior injuries or issues, strength of any medical evidence documenting prior issues, and prior functional loss. There does not need to be a prior workers’ compensation Award, or any prior settlement, for Respondent to successfully argue for a credit entitlement.

However, it remains important to be sure that prior discovery, medical records, information, and investigation obtained by Respondent is provided to Respondent’s medical experts and examiners so that the defense experts can properly assess prior issues and accurately apportion treatment/ permanency to the accident and to pre-existing issues, if applicable. It is also important for Respondent’s experts need to take a detailed history of the employee during the examination in order to determine any pre-existing issues and properly assess causation. Without a medical expert opining as to the existence of pre-existing issues and their current disabling effect, it can be much more difficult to argue for a credit. Providing the discovery to Respondent’s experts is just as important as Respondent obtaining the discovery. In order to successfully argue for a credit for a prior issue, in most cases, Respondent needs to proffer a medical opinion discussing the pre-existing disabling injury or medical issue.

A Practitioner’s Guide to “Arising Out of Employment and Occurring In the Course of Employment”

Practical Advice in New Jersey Workers’ Compensation

Practitioners and employers will often hear the phrase, “arising out of and in the scope of (or course of) employment.” This phrase encompasses two separate concepts: 1. Occurring in the course of employment, which refers to when the injury occurred and if it occurred at work; and 2. Arising out of employment which refers to causation and how the injury occurred and if work, and the employee’s employment and work, was a causative factor of the injury.

Sometimes there are instances where an injury may occur during work or arise out of work, but not both. An injured employee must prove both. Below are hypothetical situations where Respondent may have a good argument that the injury is not compensable as the injury does not arise out of AND occur in the course of employment.

Scenario 1: Peter, a cashier, is walking an item back to a shelf. As he is walking, his knee locks up. He does not trip or fall to the ground but he does sustain a knee sprain.

Here, there is a good argument that this injury did not arise out of employment. This is outlined in Meuse v. Egg Harbor Township Police Department, No. A-4553-90T5 (App. Div. May 6, 1992), where the Appellate court found that petitioner’s knee could have buckled at any time and it was a coincidence that the knee buckled at work. Therefore, as the work conditions had nothing to do with the knee injury, the injured worker was not entitled to benefits.

If Scenario 1 changes just slightly to a situation where something at work causes the injury, the outcome can be quite different.

Scenario 2: Peter, a cashier, is walking an item back to a shelf. As he is walking, his knee locks up. He falls to the ground, and his elbow hits a shelving unit, as well as the linoleum floor as he hits the ground and he sustains an elbow fracture from the impacts.

Here, the injured worker has a stronger argument that this is compensable as the shelving unit and the linoleum floor at work were what ultimately caused petitioner’s injury to his elbow. The employer should rely on George v. Great Eastern Food Products, 44 N.J. 44 (1965) and maintain that it is only responsible for any injury to the elbow caused by the shelf and floor at work, not any injury to the knee, which was not caused by anything at work.

Scenario 3: Tony and Rick are co-workers and are working a shift together. Tony’s life-long personal enemy, Fred, comes to their place of employment and punches both Tony and also punches Rick, who was standing in between Tony and Fred.

As to Tony, this injury does not arise out of the scope of employment, pursuant to Pittel v. Rubin Bros. Bergen, Inc., 59 N.J. Super. 531 (App. Div. 1960). While this injury did occur at work, the injury stemmed from a personal relationship that had nothing to do with work. However, as to Rick, this injury does arise out of the scope of employment. Fred had no outside personal relationship with Rick, so this attack was not personal and did arise in the scope of employment and it also arose out of employment.

Scenario 4: Tom has pre-existing high blood pressure. While attending a work meeting, he feels sudden chest pain. He is diagnosed with a myocardial infraction.

Here, the cardiac event occurred at work but was not caused by work, as Tom was just attending a meeting when the heart attack occurred. This injury did not arise out of work.

Employers should keep in mind that an injury must both arise out of and occur during the course of employment to be accepted as compensable. Injuries which are caused by a personal risk, or personal relationship, are not compensable under our statute.

Advice to Employers In Dealing With Potential Fraud

Practical Advice in New Jersey Workers’ Compensation

N.J.S.A. 34:15-57.4 (commonly known as the Workers’ Compensation Fraud Act) states in pertinent part: “If a person, purposely or knowingly makes, when making a claim for benefits pursuant to R.S. 34:15-1 et seq., a false or misleading statement, representation or submission concerning any fact which is material to that claim for the purpose of obtaining the benefits, the division may order the immediate termination or denial of benefits with respect to that claim and a forfeiture of all rights of compensation or payments sought with respect to the claim.”

This means that both past and future benefits may be forfeited as a result of fraud (past benefits generally being medical and TTD, and future benefits generally being potential permanency benefits).

The Fraud Act goes on to state: “[I]n addition to any other remedy available under law, if that person has received benefits pursuant to R.S. 34: 15-1 et seq. to which the person is not entitled, he is liable to repay that sum plus simple interest to the employer or the carrier … and the division shall issue an order providing for the repayment …” N.J.S.A. 34:15-57.4(c)(2).

The Fraud statute sets a very high burden of proof for Respondents, as Respondent needs to demonstrate: 1. A false or misleading statement was made by petitioner; 2. The false statement must be material to the claim; and 3. The false or misleading statement was made for the purpose of obtaining benefits in the workers’ compensation case.

Below are hypothetical situations where Respondent may have a good argument that an employee committed fraud, and should consider filing a Motion to Dismiss for Violation of the Fraud Act.

Scenario 1: Tom is under authorized treatment for a January 1, 2022 work accident where he injured his low back and left shoulder. The authorized doctor placed petitioner out of work as of January 25, 2022. Petitioner is receiving TTD as he is out of work and he continues to deposit his TTD checks but at the same time, he continues to work as a delivery driver for a food delivery company and is paid from his second job as a delivery driver at the same time he receives TTD from his first job.

Our position is that this is fraud. An injured worker cannot collect TTD for not being able to work but actually be working. In this example, petitioner is representing that he cannot work but is working and therefore, he is making a fraudulent representation.

Scenario 2: During testimony on a Motion for Med/ Temp, Ryan testifies that due to his April 15, 2022 work injury, he cannot walk more than one block. He also cannot do any household chores and testifies that he has had to hire a housecleaning service. However, surveillance shows Ryan performing in triathlons and marathons, winning awards for being in second and first place in various events. He is also seen working on his home and building an addition to his back patio.

As Ryan has grossly exaggerated his abilities, our position would be that this is fraud. Misrepresenting of abilities to this degree is similar to the case of DuBrel v. Maple Crest Auto Group, No. A-3321-10T3 (App. Div. January 30, 2012), where petitioner testified that he could no longer do a variety of things, including training and trailering horses. However, petitioner was observed doing these activities, in direct opposition of his testimony. The court in this case found that this type of false testimony was a flagrant violation of the Workers’ Compensation Fraud Act. The Appellate Division affirmed the decision of the Judge of Compensation in terminating all benefits.

Scenario 3: Mary has a work accident of March 1, 2022, where she injures her left knee. During her course of authorized treatment, she specifically denies any prior left knee issues, injuries, or treatment. However, Respondent’s investigation reveals that on January 2, 2022, petitioner underwent arthroscopic surgery to the left knee. She then underwent a course of post-operative physical therapy through February 15, 2022 and treated with her prior surgeon through February 28, 2022. When confronted with this information, Mary indicates that she simply “forgot” about her prior surgery and prior treatment.

We would maintain that this is fraud in misrepresenting past medical history. In a case like this, testimony, or specific interrogatories, would likely be needed to elicit further details. It is difficult to believe that Mary “forgot” about a surgery from two months ago and “forgot” about her prior relevant treatment, which ended just before her work accident to the same knee, but the Judge of Compensation will ultimately decide on this issue.

Scenario 4: Bob says he got hurt in Aisle 4 of the grocery store, falling by the cereal boxes. He reported the injury right away and specifically says he fell by the Cheerio boxes. Security video shows Bob never even walked down Aisle 4 on the alleged date.  In fact, he never fell at all.

It would be our position that this is fraud. The fabrication of a work injury for the purposes of obtaining medical treatment, TTD, and/or permanent disability benefits, is fraud.

If Respondent obtains new information in a closed file, Respondent can re-open the case. For example, in a case where a prior Order Approving Settlement was awarded and there may now be fraud (for example, petitioner is observed doing very physical activities that he stated he could not do at the time of settlement), Respondents can file its own Re-opener application to lower the Award. Alternatively, Respondents can file a Motion to Vacate the Prior Order Approving Settlement. Finally, Respondents can file a Motion to Dismiss for Violation of the Workers’ Compensation Fraud Act. Respondents may also be able to negotiate a small Section 20 settlement, or dismissal, of a case where the employee committed fraud.

A Guide to Interrogatories and Their Importance in the Workers’ Compensation Practice

Practical Advice in New Jersey Workers’ Compensation

Under N.J.A.C. 12:235-3.8, interrogatories are allowed in the following types of cases without motion (meaning, neither party is required to file a Motion for Leave to Serve Interrogatories with the Court): dependency cases (See N.J.A.C. 12:235-3.8(a)), re-opener cases (See N.J.A.C. 12:235-3.8(d)), and occupational exposure cases  (See N.J.A.C. 12:235-3.8(f); for sample occupational interrogatories, click here).

Pursuant to N.J.A.C. 12:235-3.8(g), interrogatories may be allowed in other cases, upon motion, for good cause shown. Examples of cases where a motion for interrogatories may be filed are COVID-19 cases, medical provider cases, or certain types of denied cases where further information is being sought by the Respondent due to a disputed issue in the claim.

Situations where Respondents may consider filing a Motion for Special Interrogatories are cases where there is a specific issue or dispute requiring further clarification and investigation. Special Interrogatories may be used to obtain critical information of a discovery or factual nature that either party needs to prove its case.

While interrogatories are only allowed without a Motion in dependency, re-opener, and occupational exposure cases, respondents can also file Motion for Leave for Special Interrogatories in other cases, and special interrogatories are under-utilized in New Jersey workers’ compensation. For a client and practitioner, one never wants to start trial without pinning down key facts that could make or break one’s case. Trial by surprise remains a risky endeavor. Practitioners should consider filing Motions for Leave to Serve Special Interrogatories in those cases where there is a factual dispute or issue worth investigating.

While most cases in New Jersey workers’ compensation involve traumatic accidents where interrogatories are not allowed without Motion (and granting of the Motion), consider a situation where the authorized treating physician notes that the injured worker had a skiing accident three years ago in Vermont. In this instance, Respondent should consider filing a Motion for Special Interrogatories seeking further, and specific information, from the injured worker about the prior out-of-state accident, including names and addresses of all treating physicians, the nature of the injury, etc.

Respondent may wish to investigate petitioner’s subsequent/ additional employment, and in that instance, a set of interrogatories could be served seeking information regarding a claimant’s second job, including job duties, earnings, and employment information.

Another example of where special interrogatories would be useful is a situation where there is a dispute over ownership and control of an area. In this instance, interrogatories could be served seeking to obtain deeds and/or tax records and other documents to demonstrate ownership and control, or lack of ownership or control.

In those cases with disputed coverage or policy issues, interrogatories could be served seeking policy documents, cancellation notices, and other documents regarding proper cancellation of coverage.

The ultimate goal with filing a Motion for Leave to Serve Special Interrogatories is to obtain a Court Order granting the Motion, and more importantly, having the Order provide that the requested answers to interrogatories be provided within a certain time frame, such as thirty, forty-five, or sixty days. Then, if the answers are not provided within that designated timeframe, Respondent can file an appropriate motion.  Parties and practitioners on both sides should be aware of how important interrogatories can be to centralize the issues.

Turning to those situations where answers to interrogatories are allowed without Motion, we first look at inquiries posed in dependency cases. These inquiries ask the alleged dependent to supply proof of dependency to the decedent, including the manner of relationship between the alleged dependent and decedent, as well as evidence that the decedent’s death was work related. These interrogatories also inquire as to the nature of any financial dependency the alleged dependent had with the decedent prior to the decedent’s passing. Dependency Claim Petitions and filing requirements are subject to N.J.S.A. 34:15-51, which require that a Dependency Claim Petition must be filed within two years of the decedent’s death.

In re-opener cases, inquiries are posed to petitioner regarding any treatment since the entry of the prior Award, including details regarding physicians and the nature of any treatment since the entry of the prior Award. Petitioners are asked to identify any subsequent employment held since the entry of the prior Award, including job duties at any new / subsequent positions. An inquiry is made regarding any new relevant accidents / injuries or claims and any new Awards or settlements. Essentially, these interrogatories are seeking information regarding any new injuries, incidents, or treatment since the entry of the prior Award. It is worth noting that any re-opener application must be filed within two years of the last date of payment made to petitioner, pursuant to N.J.S.A. 34:15-27. If the re-opener application is filed more than two years after the last date of payment or treatment date if treatment is rendered, Respondent should seek a dismissal of the matter pursuant to Section 27.

In occupational exposure cases, a standard set of respondent occupational interrogatories can be found on the NJ Department of Labor’s website, as noted above. In this practitioner’s opinion, the most important inquiry is Number 10: “Set forth the date and circumstances under which the petitioner became aware that the claimed injuries resulted from his employment”. Under N.J.S.A. 34:15-34, a petitioner in an occupational disease claim must file the petition within two years after the date on which the petitioner first knew the nature of the disability and its relation to the employment. For example, if petitioner files an occupational Claim Petition on January 1, 2022, and his response to Inquiry Number 10 states that he became aware of his claimed injuries and their alleged relationship to employment at any time prior to January 1, 2020, Respondent should utilize petitioner’s Answers to seek a dismissal of the claim pursuant to N.J.S.A. 34:15-34. Often, the Answer to Inquiry 10 is something along the lines of, “I became aware of my issues and their relationship to work upon consultation with my attorney”, but if a specific date is noted, Respondent should compare the date listed in Inquiry 10 to the date of the filing of the Claim Petition.

With the increase of COVID-19 cases, this practitioner has seen interrogatories being posed both on petitioners and respondents. Often the interrogatories served by petitioner asks respondent to identify whether petitioner was an essential worker. There is very little guidance on who is an essential employee, so this is actually a complex legal question as proximity to the public is not defined in the Essential Employee Law.

Practitioners should not limit interrogatories to those cases where interrogatories are allowed without Motion, and should consider filing Motions for Leave for Special Interrogatories in cases where further information is needed to flesh out disputed issues.

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A Practitioner’s Glossary of New Jersey Workers’ Compensation Shorthand

Practical Advice in New Jersey Workers’ Compensation

A reader reached out asking about the terms and abbreviations often used in the workers’ compensation practice. Below is a glossary of these abbreviations and phrases often used (listed generally in order in which they may appear as a case progresses).

“CP” – Claim Petition:  This pleading is filed by the injured worker in workers’ compensation court when benefits (most often, permanency) are being claimed by the injured worker.

“MPC” – Medical Provider Claim Petition:  In New Jersey, medical providers have the right to file their own petitions.

“FRI/FROI” – First Report of Injury:  This form is completed by the employer after an accident. It generally outlines how the accident occurred and the injured workers’ injury(ies). This form gets filed with the Division. (For suggestions regarding what types of inquiries and items may be incorporated into an FRI/FROI and could be asked of the injured worker, please contact the undersigned at mburk@capehart.com or John H. Geaney, Esq. at jgeaney@capehart.com.)

“IW” – Injured Worker

“TTD” – Temporary Disability Benefits:  For more information regarding TTD issues, please read our prior blog post entitled, Advice To Employers In Dealing With Complex TTD Scenarios.

“TDB” – Temporary Disability Benefits:  These are benefits issued by the State of New Jersey. This is also an abbreviation for “New Jersey Temporary Disability Benefits.” In certain circumstances, an employee may receive State TDB benefits instead of TTD from the employer. In these cases, a lien will likely be filed by the Division of Temporary Disability Insurance in the workers’ compensation case.

“ROC” – Rate of Compensation:  This refers to petitioner’s rate of TTD and the amount which is paid weekly while petitioner is out of work and receiving TTD benefits.

“RTW” – Return to Work:  This is often used in conjunction with TTD (discussed above).

“LD” – Light Duty:  Practitioners may also see the terms “mod duty,” “MD” or “modified duty.” “AD” – Alternative Duty may be used as well.

“FD” – Full Duty

“FCE” – Functional Capacity Evaluation:  This may also be referred to as a fitness for duty examination. An FCE may be ordered by a treating physician to better assess return to work status and return to work potential/abilities.

“MA” – Medical Authorization:  An MA signed by the injured worker is needed in order to obtain medical records from prior physicians during respondent’s investigation.

“ISO”:  Refers to a New Jersey-based national company that searches for prior claims information. This used to be called a “CIB”.

“NCM” – Nurse Case Manager:  In certain circumstances, a nurse case manager may be assigned to an injured worker’s case to assist with medical scheduling, appointments, exams, and treatment.

“CMS” – Center for Medicare Services:  Medicare’s interests must be considered and protected in workers’ compensation claims and settlements.

“MSA” – Medicare Set Aside:  An MSA must be obtained in certain types of settlements if the employee is a Medicare recipient or Medicare-eligible.

“CPL” – Conditional Payment Lien:  MedicareCPL information must be obtained in settlements if the employee is a Medicare recipient or Medicare-eligible.

“HMS” – Health Management Systems:  This is the Medicaid counter-part to Medicare’s CMS.

“Rogs” or “Roggs” – Interrogatories:  Interrogatories may be served seeking additional information in occupational exposure, re-opener, dependency, and certain other types of cases.

“MMT” – Motion for Medical and/or Temporary Disability Benefits:  This may be filed by an injured worker during a case if he is seeking additional TTD or treatment.

“RMI” – Request for Medical Information OR “DMI” – Demand for Medical Information:  When one party seeks medical discovery from another party.

“IME” – Independent Medical Evaluation:  This generally refers to an exam by either petitioner or respondent where a physician will address causation and treatment issues (often during treatment) or address causation and permanency issues (once treatment has concluded).

“PPD” – Permanent Partial Disability:  These are benefits which are awarded to a petitioner at the end of the case depending on the amount of permanency petitioner is able to demonstrate. This may also see this abbreviated as “perm.”

“OAS” – Order Approving Settlement:  This is one of two ways a case may settle. In Orders Approving Settlement, the petitioner’s case resolves for a specific percentage of disability and the petitioner retains the right to reopen for future benefits. Corresponding with the level of disability, the percentage award is paid over a certain number of weeks.

Readers with questions regarding workers’ compensation terms and phrases, or general questions about practical guidance and workers’ compensation tips may contact the undersigned at mburk@capehart.com.

For your convenience, we have created an alphabetical list of these terms which you can download for easy reference.

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Section 20 Settlements Versus Orders Approving Settlement

Practical Advice in New Jersey Workers’ Compensation

Our clients often ask great questions regarding settlements in New Jersey workers’ compensation, particularly regarding the two types of settlements (Orders Approving Settlement, and Section 20/full and final), and the differences between them.  This post provides examples of scenarios where an argument can be made for a Section 20 settlement.

There are two ways to settle a workers’ compensation claim in New Jersey. Most cases in New Jersey settle under N.J.S.A. 34:15-22 (known as an Order Approving Settlement) with a specific percentage of disability. In this case, the employee retains right to reopen for future benefits and receives a percentage award which is paid over a certain number of weeks corresponding with the level of disability.  The higher the disability percentage, the more weeks that are paid.

Section 20 settlements are quite different.  First, the Award is paid in a lump sum settlement. This is a full and final settlement of the case and it can never be reopened. A case settling pursuant to a Section 20 settlement must present a disputed issue of, liability, causation, jurisdiction, or dependency.  Without one of these issues, there is no legal basis for a Section 20.

Issue of Liability: An issue of “liability” generally refers to a disputed employment issue (such as an off-premises injury) or a dispute regarding the existence of permanency.  N.J.S.A. 34:15-36 states that in order to demonstrate permanent disability, a petitioner must prove, via objective medical evidence of an impairment (diagnostic studies) which restricts the function of the body.  If the respondent can make a serious argument that there really is no permanent disability, then many judges will permit a Section 20 settlement.

In addition to proving an impairment, the petitioner must show also that the impairment is disabling.  Disability is broader than impairment.  It requires that the petitioner must also prove that he or she has a lessening to a material degree of working ability or a substantial impact on non-work activities.

Other bases for a Section 20 on the issue of liability are lack of timely notice under N.J.S.A. 34:15-17 or failure to comply with the Statute of Limitations under N.J.S.A 34:15-51.

Issue of Causation: An issue of “causation” generally refers to a disputed medical issue.

Case study/Example 1: Petitioner injures her left knee at work on January 1, 2020. Her post-accident MRI of February 15, 2020 is normal. She then has a subsequent non-work accident on March 1, 2020. An MRI of April 1, 2020 reveals an anterior cruciate ligament tear and a meniscal tear. We would argue that due to the March 1, 2020 subsequent accident which obviously caused new diagnostic findings, this case is appropriate for a Section 20 settlement. This example is similar to the case of Costanzo v. Meridian Rehab, A-5547-18 (App. Div. June 17, 2021), handled by our partner Carla Aldarelli. This case was discussed in our blog article entitled Respondent Prevails Where First MRI Post-Accident Showed No Abnormalities In Knee.

Case Study/Example 2: Petitioner injures her left knee at work on January 1, 2020. Her post-accident MRI of February 15, 2020 reveals an anterior cruciate ligament tear and a meniscal tear. During Respondent’s investigation, it is revealed that petitioner had a prior left knee injury of June 15, 2019 and on August 15, 2019, petitioner underwent a left knee MRI which also revealed an anterior cruciate ligament tear and a meniscal tear. We would argue that since the January 1, 2020 accident did not cause any new diagnostic findings, any disability is related to the prior June 15, 2019 accident, making this case proper for a Section 20 settlement.

Case Study/Example 3: Petitioner injures her left knee on January 1, 2020. On January 1, 2021, she receives an Order Approving Settlement for 15% of the leg from this January 1, 2020 accident. She re-opens her case on June 1, 2021. On May 1, 2021, she had a new left knee injury with a new employer for which she underwent treatment including a series of injections. She had no new treatment for the January 1, 2020 claim after filing her Re-opener. On the Re-opener, we would argue that the May 1, 2021 incident cuts off causation from the initial January 1, 2020 work accident, and the Re-opener should now be settled pursuant to Section 20.

Case Study/Example 4: Petitioner injures her left knee on January 1, 2020. On January 1, 2021, she receives an Order Approving Settlement for 15% of the leg from this January 1, 2020 accident. She re-opens her case on June 1, 2021. On May 1, 2021, she had a new and minor left knee injury with a new employer. The first employer for the January 1, 2020 accident agrees to provide all treatment following the reopener date, and the second employer pays no medical and temporary disability benefits because its incident was very minor.  A petition is filed against the second employer. The employer for the May 1, 2021 incident will likely argue for a Section 20 dismissal.  Most likely, the employer for the original January 1, 2020 re-opened claim will have to resolve the case on an Order Approving Settlement.

Issue of Jurisdiction: As a general matter, there are three principal ways in which jurisdiction in New Jersey may be found:

1.         When the contract of hire is in New Jersey;

2.         When the accident occurs in New Jersey;

3.         When a substantial amount of employment for the respondent occurs in New Jersey.

There are instances where jurisdiction may be found in more than one state. This is allowed, so long as there is not a duplication of benefits between the two states (medical, TTD, permanency). So an employee may receive temporary disability benefits and medical benefits in another state like New York but apply for partial permanent disability benefits in New Jersey if the injury, hire, or work occurred in New Jersey.

Marconi v. United Airlines, 460 N.J. Super. 330 (App. Div. 2019) holds that localization of the employer in New Jersey and residency of the petitioner in New Jersey was not sufficient to warrant New Jersey jurisdiction where the petitioner worked almost exclusively in Pennsylvania and was injured in Pennsylvania.  Petitioner argued that since United Airlines had a hub in Newark Airport (although petitioner worked in Pennsylvania) and petitioner also lived in New Jersey, those facts should be enough for jurisdiction. The Appellate Division disagreed.  Our partner, Prudence Higbee, prevailed in this matter for United Airlines. More details about this case may be found in our blog article entitled United Airlines Wins Important Appellate Decision Involving Jurisdiction.

Issue of Dependency:

If it is determined that the work accident was not the cause of death, ultimately, we would argue that nothing except funeral costs are owed. However, in certain situations, a small Section 20 settlement/Award may be offered, in order to close the case.

If it is determined that an alleged dependent is not a valid dependent under Section 13, we would argue that nothing is owed. However, in certain situations, a small Section 20 settlement/Award may be offered, in order to close the case.

Miscellaneous Issues

Finally, there are also some “miscellaneous” considerations when determining if a Section 20 settlement is feasible. First, all Section 20 settlements are subject to petitioner’s, petitioner’s attorney’s, and the Judge’s approval.

Second, practitioners should keep in mind that legal fees are quite different between a Section 20 and an Order Approving Settlement. In Orders Approving Settlement, petitioner’s attorney’s fee (which is 20% of the overall Award) is paid 60% by Respondent and 40% by petitioner. For petitioner’s permanency exam, Respondent pays 50%; petitioner pays 50% (generally $300 each) In a Section 20 Order, petitioner pays 100% of his or her attorney’s fee.

Case Study/Example 1: Petitioner receives an Award for 15% partial total at 2021 rates, or 90 weeks at a rate of $258.00 per week, totaling $23,220.00. Petitioner’s attorney’s fee is $4,644. Of this, Respondent pays $2,786.40 and petitioner pays $1,857.60 (this may be rounded to the nearest dollar and rounded up for Respondent and rounded down for petitioner). Respondent and petitioner each pay $300 for petitioner’s expert. Ultimately, petitioner nets $21,062.40 and retains re-opener rights.

Case Study/Example 2: Petitioner receives a Section 20 Award of $27,500. Petitioner is solely responsible for his attorney’s fee of $5,500 out of his Award; he also pays the full $600 for his report. Ultimately, petitioner nets $21,400 and does not retain re-opener rights.

One disadvantage of a Section 20 is that payments are not lienable when there is a third party recovery unless both parties specifically agree on the record to make such payments lienable. This is quite different from an Order Approving Settlement where the entire permanency payment may be lienable if the third party amount is higher than the amount of the permanency award.

More than two thirds of settlements in New Jersey resolve on an Order Approving Settlement.  The reason is that in many accidents there simply is no legal basis for a Section 20 settlement.  The advantages of a Section 20 settlement are that the case is closed in a lump sum payment (unlike payments over many weeks for an Order Approving Settlement), there is no admission of liability and there is no potential for a reopener.  But there must be a disputed issue of, liability, causation, jurisdiction, or dependency to argue for a Section 20 settlement.

The post Section 20 Settlements Versus Orders Approving Settlement appeared first on NJ Workers' Comp Blog.

Advice to Employers in Dealing With Dependency Issues, Dependency Benefits, and Lifetime Benefits

Practical Advice in New Jersey Workers’ Compensation

What happens if an employee dies during the pendency of the open and ongoing workers’ compensation claim? The answer to this depends on a few factors. The first consideration is when the petitioner died (during treatment/ before permanency exams, after permanency exams, or after an Order Approving Settlement for permanency has been entered). The second consideration is whether the cause of death is, or is not, work related.

Below are various potential situations regarding dependency/ death cases, and how we would recommend handling each scenario.

Scenario 1: Petitioner dies from a cause not related to his workers’ compensation injury while he is under authorized treatment. Permanency exams have not yet occurred on either side. Who gets paid benefits, and what type of benefits are they owed?

It is our general position in this scenario that all that is owed is a contribution to funeral expenses as set forth in N.J.S.A. 34:15-12(e) (up to $5,000). In almost all cases like this, it is difficult for a petitioner to prove permanency without permanency examinations.

There are exceptions of course. In certain circumstances (such as a case involving a truly catastrophic accident), permanency could possibly be assessed without permanency exams, but these circumstances are quite rare. In most cases, permanency cannot be assessed without permanency exams where the employee is examined and provides their current complaints.

Since permanency benefits are based on current complaints as provided to permanency experts and testimony or a settlement affidavit, it is difficult to assess permanency without permanency exams on both sides having occurred, and without current complaints given to permanency experts. Generally, permanency cannot be attributed in a case where petitioner was under ongoing authorized treatment when he passed away.

We generally maintain that an employee is not entitled to permanency if the employee was still in treatment and had not medically plateaued, since he cannot sustain his burden of proof that he sustained permanency from the work accident.

Case Study/ Example: Logan is treating for a work-related tendinopathy condition. Treatment is progressing with physical therapy. Logan dies from a non-work related motor vehicle accident halfway through physical therapy. Does the employer owe permanency? No, because there is no way to prove permanency. Who could say that Logan would have had permanency when treatment was not even finished?

Scenario 2: Petitioner died from a cause not related to his workers’ compensation injury after permanency exams have occurred. Who gets paid benefits, and what type of benefits?

The difference between Scenario 1 and Scenario 2 is that in this scenario, permanency can be reasonably assessed and negotiated, based on the permanency exams that have occurred on both sides and the expert reports. Therefore, in this case, permanency can be assessed and negotiated between the parties.

Pursuant to N.J.S.A. 34:15(12)(e), when an employee dies from a non-work related cause after permanency exams, permanency payments are paid to the decedent’s dependents.

This is supported by the case law of Cureton v. Joma Plumbing & Heating Co., 38 N.J. 326 (1962), where the parties both obtained permanency reports with both experts assessing disability.

Scenario 3: Employee dies during the course of authorized treatment due to the work-related incident, and the work accident is the cause of death.

First, we note that a dependency claim can be filed when death is caused directly or indirectly from a work injury and it does not have to be the sole or primary cause of death.  As long as the work accident is a contributing cause, there can be a valid dependency claim. Also of note is the statutory time period in which a dependency claim must be filed under N.J.S.A. 34:15-51, which states that a claim must be filed within two years of the date of the accident. In a dependency claim, the dependency claim petition must be filed within two years from the date of death.

The compensation to a dependent (once the individual is determined to be a dependent, subject to N.J.S.A. 34:15-13(f)) is based on 70% of the employee’s wages at the time of death.

Dependency interrogatories should be served on any individual filing a dependency claim petition, to investigate the nature or the relationship between decedent and potential dependent and to confirm that the individual qualifies as a dependent as defined by Section 13. Employers should obtain a copy of the autopsy report and death certificate. Information should also be obtained regarding decedent’s treating physicians.

Scenario 4: Employee dies after an Order Approving Settlement is entered.

After an employee passes away, the remaining permanency payments are paid to the dependents. Cureton v. Joma Plumbing & Heating Co., 38 N.J. 326 (1962), referenced above, holds that any permanency benefits that were accrued but not yet paid at the time of death become part of the estate.

But ongoing un-accrued permanency benefits owed to an employee after the date of death are paid to dependents. An individual has no “dependents” until after he has passed away.

Case Study/ Example: Joan gets an Award of 15% permanent partial disability on January 1, 2022. The date of last temporary disability benefits was January 1, 2021, so one year of accrued permanency benefits exists. Joan’s accrued permanency benefits are paid over 90 weeks. Joan dies on January 2, 2022 from a non-work related cause. Who gets the permanency Award? The estate gets the portion of the accrued amount for the dates of January 1, 2021 through January 2, 2022. The statutory dependents get the future payments due after January 2, 2022.

Employers must always keep in mind when and how an employee passes away, to determine potential exposure, and the type of benefits that may be owed, and to whom the benefits might be owed.

The post Advice to Employers in Dealing With Dependency Issues, Dependency Benefits, and Lifetime Benefits appeared first on NJ Workers' Comp Blog.

Advice To Employers In Dealing With Complex TTD Scenarios

Practical Advice in New Jersey Workers’ Compensation

The general rule is that an injured worker is entitled to TTD for the time frame that the authorized treating doctor placed the employee out of work.

Pursuant to Monaco v. Albert Maund, Inc., 17 N.J.  Super. 425 (App. Div.), 21 N.J. Super. 443 (App. Div. 1952), generally, TTD continues until the employee is able to resume work or until the employee “is as far restored as the permanent character of the injuries will permit” [placed at MMI], whichever happens first. This means that TTD can cease in either of the following situations: a. The employee is placed back to work and authorized treatment is ongoing and continuing; or b. The employee is placed at MMI from treatment, even if the employee is discharged with permanent work restrictions (irrespective of whether the restrictions can be accommodated).

In addition to the above rule, there are some tricky situations where TTD benefits may be stopped for other reasons.  Below are hypothetical situations regarding TTD, and how we would recommend handling each scenario.

Scenario 1: Bob works for a large retailer and is injured on February 2, 2022. Bob is receiving authorized treatment and is initially not placed out of work. On March 14, 2022, Bob is caught stealing from the register at work, as well as stealing $4,000 worth of merchandise from the electronics department. The authorized doctor places Bob out of work as of March 17, 2022; it is anticipated he will be out of work for a few months. After an investigation into the theft, Bob is terminated for cause on March 28, 2022. The employer pays TTD from March 17, 2022 through the date of his termination, March 28, 2022. Bob alleges that he is owed TTD from March 17, 2022 onward, as he was placed out of work by the authorized doctor on March 17, 2022 and has not yet been returned to work.

Our position is that Bob is owed TTD only for the date range of March 17, 2022 through March 28, 2022, the date of the termination.

There are quite a few cases dealing with this issue. In all of the cases, the main point comes down to this: The purpose of TTD is to compensate for actual lost wages. As such, in a situation like this, our position would be that Bob is not owed TTD after March 28, 2022.

The most important case on this scenario is Cunningham v. Atlantic States Cast Iron Pipe Co., 386 N.J. Super. 423 (App. Div.), certif. denied, 188 N.J. 492 (2006), where the Court stated that Cunningham must “prove that he actually lost income…because of his disability”. The Court noted that TTD is wage replacement for “actual lost wages”, and not “theoretical or fictitious wage loss”.

 The Court in Cunningham was guided by the holding of Outland v.  Monmouth-Ocean Educ. Serv. Comm’n, 154 N.J. 531 (1998). In Outland, the Court held that in order for a teacher who teaches during the school year to be entitled to TTD during the summer months, she must prove that she would have had summer employment. The case of Gioia v. Herr Foods, Inc., No. A-0667-10T4 (App. Div. October 11, 2011) also deals with an employee terminated for misconduct (in that case, violation of the employer’s drug policy), and the holding of Gioia makes it clear that TTD is for actual lost wages, not theoretical lost wages. In a case where an employee is terminated for cause, at the point of his termination, he no longer has wages. If there is no actual wage loss, TTD is not owed.

Scenario 2: Nate has been placed out of work by the authorized doctor and is not working. TTD is being issued. The authorized doctor, on May 15, 2022, recommends that Nate undergo a shoulder surgery. Nate receives all surgical clearance and on May 22, 2022, the authorized doctor schedules the surgery to occur on June 5, 2022. However, Nate has a pre-planned vacation June 4- June 18. Then he is moving residences during the end of June, and then will have family visiting during July as well as various other summer activities, so he wants to push the surgery back until at least August 15. Nate asserts that he is entitled to TTD during the time frame of May 22, 2022 through August 15, 2022.

Our position is that Nate is not entitled to TTD during the time frame of May 22, 22022 through August 15, 2022.

Nate is refusing treatment, for reasons that are not related to any health or medical issues. An employee not complying with the authorized doctor’s treatment plan, and treatment schedule, based on a personal reason or personal preference, is not entitled to TTD benefits.

Our position is that if petitioner is not actively treating, or is missing appointments, he is not entitled to TTD under N.J.S.A. 34:15-19, which states that after an injury, an employee must submit himself for physical examination within this state, as often as may be reasonably requested, and, “the refusal of the employee to submit to such examination shall deprive him of the right to compensation during the continuance of such refusal”. Since Nate is failing to, or refusing to, comply with treatment and is not cooperating with authorized treatment, he is not entitled to TTD during his non-cooperation.

Scenario 3: Ronald, an electrician, was injured on January 15, 2022. The authorized doctor places Ronald out of work February 10 through March 1, 2022. On March 2, 2022, Ronald is released to work light duty; the doctor noted that full duty was anticipated on or around April 2, 2022. The employer can accommodate light duty work and can pay Ronald his usual salary in his temporary light duty position; Ronald was offered the light duty position on March 2, 2022. Ronald refuses the light duty position, as he does not want to work “desk duty”; Ronald maintains he is owed TTD from March 2, 2022 through April 2, 2022 (or whenever he is in fact returned to work full duty).

Our position is that Ronald is not entitled to TTD as of March 2, 2022, the date that light duty was offered, and declined.

We recommend relying on Harbatuk v. S & S Furniture Systems Insulation, 211 N.J. Super. 614 (App. Div. 1986) in a situation like his. If the employee is offered a light duty job, and the employee refuses the light duty job, the employer can terminate TTD upon the refusal. For this reason, it is a good idea to put the light duty offer in writing, dated, and reference the date that the authorized doctor placed the employee back to work light duty, and the date light duty could be accommodated, particularly as under Williams v. Topps Appliance City, 239 N.J. Super. 528 (App. Div. 1989), “the burden is on the employer to show that light work was offered to [the employee] and that it was refused”.

The above scenarios re-emphasize two important things to keep in mind with respect to issuance of, and entitlement to, TTD benefits: (1) TTD is to compensate for actual lost wages; and (2) An employee’s refusal to comply with offered light duty and/or the authorized doctor’s recommended course of treatment may be cause for TTD to be terminated.

The post Advice To Employers In Dealing With Complex TTD Scenarios appeared first on NJ Workers' Comp Blog.

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