Key Developments In New Jersey Workers’ Compensation For Public Employers

In September 2020 Governor Murphy signed legislation providing for a rebuttable presumption covering certain essential employees who contracted COVID-19.  Public safety workers comprise one of the categories of employees which were protected by the presumption.  The way the presumption works is that if an employee is deemed to be an essential employee working during the pandemic and contracts COVID-19, the burden of proof shifts to the employer to disprove that the employee contracted COVID from work. It is always much harder to prove a negative, and employers have had a difficult time with the shifting burden of proof. 

On June 4, 2021, Governor Murphy announced the end of the public health emergency in New Jersey under Executive Order 244, which is effective 30 days from the date of the Governor’s order.   What does that mean for the presumption? It is this practitioner’s opinion that as of July 3, 2021 the presumption in workers’ compensation cases will also end. Claimants’ attorneys may not agree on this interpretation because the public emergency has not ended, only the public health emergency.  But the original presumption bill specifically referenced “the public health emergency” as a basis for the presumption.  In the view of most workers’ compensation defense counsel, after July 3, 2021, the burden of proof will rest with the employee who contracts COVID-19.  The employee will have to prove by a standard of more likely than not that he or she contracted COVID-19 at work as opposed to from family exposures or the general community.  The presumption will continue to apply to all those cases where the employee contracted COVID from March 9, 2020 to July 3, 2021.  

Another important piece of COVID legislation was signed into law on April 20, 2021 by Governor Murphy. This 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, more specifically the Office of Special Compensation Funds. 

The prerequisites for a dependent of an essential employee who dies from COVID 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.  This does not apply to cases that the employer accepted but were never formally documented under a Court Order establishing dependency status. For rights under this law, the dependent must file a claim petition and obtain a court order proving dependency status.  

The formula for this supplement is simple.  You use the workers’ compensation weekly dependency benefit initially awarded as the numerator and you use the state’s maximum workers’ compensation death benefit as the denominator.  That sets the ratio. In 2021 the maximum dependency rate is $969. Consider an essential employee who dies in 2021 from COVID-19. Suppose the employee’s wage was $830.57 per week giving rise to a dependency rate of $581.40. Then the ratio would be 60% of the maximum dependency rate of $969.  ($581.40 is 60% of $969).  Every year as the maximum dependency rate rises, a supplemental payment will be made to the dependent so that the dependent’s benefits never drop below 60% of the maximum dependency rate.  For example, if the maximum rate should climb in five years to $1,200 per week, then the dependent’s rate will climb to $720 per week (always 60% of the maximum rate in this example). For all other dependents in New Jersey, the rate never changes. 

The law signed by the Governor states, “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.”  This language appears to be wrong as the Office of Special Compensation Funds has advised that the petitioner’s attorney will have to fill out forms following the Judge’s Order of Dependency and expects that the petitioner’s counsel will take care of notification. Nonetheless, third party administrators and carriers should always advise the Office of Special Compensation Funds to be safe. 

The third development which employers should be aware of is by no means favorable. It has always been a maxim that workers’ compensation laws just provide monetary benefits but not employment rights. That may not be true much longer. On May 20, 2021, the New Jersey Assembly voted unanimously in favor of creating a hiring preference for certain employees who reach maximum medical improvement (MMI) following a work injury.  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. 

The sponsors of the bill said, “Workers’ compensation injuries can be traumatic and devastating.  No injured employee should be left without options for work?”  That language is misleading:  the bill does not apply to all employees who are injured, only those who have work injuries.  Ironically, those who have serious non-work injuries are in a much more precarious financial situation because they do not have access to tax free benefits in workers’ compensation.  

Questions abound with respect to this bill.  Does the Judge of Compensation have the power to order the employer to place the employee in another job?  If not the Judge of Compensation, who does the employee turn to?  Does the employee have to sue in civil court or file an administrative complaint?  What penalties will the employer suffer if the employee is not placed in another unfilled job or if the employer concludes that someone else is more qualified?  Does this law trump civil service rules?  Perhaps most importantly, why is this bill needed if New Jersey already has the New Jersey Law Against Discrimination?  The NJLAD is one of the most liberal employment rights laws in the nation.  This proposed bill appears to apply to anyone who reaches MMI, whether or not he or she has any disability.  

The Assembly bill is very short and is notable for what it doesn’t say. The sponsors of the bill appear not to have considered that maximal medical improvement is not a one-time or one-day event.  When one reaches MMI, that status continues for years barring reinjury. When does the obligation on the employer end under this law?  Does the period of protection go on for the rest of the employee’s life?  Suppose the unfilled job that the employee is placed in comes to an end years later.  Does that now mean the employer must place the employee in another unfilled job? The New Jersey Senate has made a few minor amendments but has not changed the core text of the bill. This practitioner will keep readers posted. 


John H. Geaney, Esq., Capehart Scatchard, P.A.