Significant Legislation Advances in New Jersey

Important workers’ compensation legislation is quickly advancing as the current 2018-2019 legislative session comes to a close. A bill increasing the recovery for injuries to hands and feet,  also also embodies a significant requirement that the Commissioner of the Department of Labor and Workforce Development study, on an ongoing basis, the effectiveness of the State’s workers’ compensation program.

Oversight Sought of NJ Workers' Compensation System

New Jersey lawmakers have not given up on their mission to legislate changes to the State's workers' compensation system which had become the subject of a series of investigative articles in the Star Ledger Newspaper. The investigative reporting revealed a series of problems that the NJ legislature has been challenged to address.

Senate Majority Leader Stephen Sweeney (D-Gloucester), has introduced legislation (S-1982) establishng the position of ombudsman modeled after the Oregon system.

NJ Workers' Compensation Legislative Analysis

Why there is a need to increase “The Cap.”

NJ’s Statutorily Imposed Cap of Benefits

The average worker is dependent upon his weekly wage to provide the necessities to maintain a standard of living for himself and his family. When the flow of salary ceases, immediate concern focuses on the provision of food, clothing and shelter. The Workers' Compensation system is a major social benefit program that addresses the need to provide for benefits to replace earned wages and a “socially adequate” standard of living.

Disability rates for workers' compensation benefits in the State of New Jersey are based upon the computation of the wages of the injured employee. Statutorily, the wages are defined to mean "the money rate" at which the service rendered is compensated.

Since the Act was amended in 1979, New Jersey workers' compensation benefits are based upon the statewide average weekly wage (SAWW). There are both minimum and maximum compensation rates. The Act provides for a sliding scale of maximum allowable weekly benefits through the first 180 weeks of disability, and thereafter eliminates the sliding scale, replacing it with a single percentage rate, which itself increases as the severity of the disability increases. The beginning rate of disability is 20% of the SAWW, and increases by approximately one percent until it reaches the level of 35% of the SAWW for injuries which warrant disability payments of over 180 weeks. [From that point on, as the severity of the disability increases, the percentage of the SAWW which is paid also increases by five (5) percentage points for approximately every 30 weeks of disability paid.

NJ’s Dilemma:

2008 State Average Weekly Wage (SAWW)

NJ State Average Weekly wage (SAWW) for all workers was determined to be $989.23, 39 N.J.R. 3714(a).

NJ State Average Hourly Wage for 2008, calculated as 1/40th of the SAWW = $24.73, NJSA 34:15-12. The Maximum Workers’ Compensation benefit, which is capped at $75% of the SAWW for 2008 is $742 per week.

The Maximum HOURLY Workers’ Compensation SAAW cap is, based on a 40 hour week, $18.55.

Many workers in NJ are earning wages that EXCEED $18.55 per hour!

Where NJ Stands in Comparison to Other States

13 States have SAWW Caps that are higher than 100%. Iowa has 200%. 20 States, including close or nearly adjacent States/Federal District (Pennsylvania, Rhode Island, Connecticut, Massachusetts and District of Columbia.), have 100%.

Of the States with fixed dollar caps on benefits, 33 States have caps that are 100% or greater than New Jersey and only 6 states have dollar caps lower than NJ.What an increase in “the cap” would cost NJ. It has been estimated that in increase in the cap merely from 75% to 80% would cost no more that a 1% percent increase in total cost and therefore an increase to 100% would be no more than 5% or about $100 million.

Cost of NJ System in Comparison to Other Systems

The most current numbers available indicate that the cost of workers’ compensation benefit per $100 payroll compare as follows:NJ = $0.85 (which amounts to 81% of the national average)All States – National Average = $1.05

NJ presently rates14th lowest in cost nationally and a mere increase of only 5% would increase the cost to $0.89 which equates to 85% of the national average which would rank NJ still as 19th lowest in cost.

Download Legislative Complete Legislative Analysis

http://www.gelmans.com/FrontEnd/ReadingRoom/vwFile.asp?FileId=276

Florida’s “Circle Solution” Revisited: NJ Struggles to Speed up the Benefit Highway

After a major investigative report entitled “Waiting in Pain,” the Star Ledger, newspaper reflected delays and frustrations in the operation of the NJ Workers’ Compensation system. The NJ Legislature has found itself struggling to define an effective approach to resolve the problems of the century old compensation system.

The Legislature immediately convened a hearing to discuss the issue. It heard testimony from many of the stakeholders, except the victims of the alleged abuse, the injured workers. Their voices were silent.

In a complete about face the leadership of the Legislature turned from the initial comments that the system was “completely dysfunctional” and needed a complete overhaul, to its present course of action, a piecemeal modification of the Act without the benefit of a complete and thorough evaluation of the system.

The enormous delay in the delivery in medical care appears to be a most significant and complex issue facing the Workers‘Compensation system in New Jersey and other jurisdictions throughout the United States. Medical benefits, which have soared in cost, now have now become the epicenter of controversy.

It is obvious that the system is need of more than merely first aid. A complete evaluation of the system is required such as has been proposed by Assemblyman Neil Cohen. Without such an evaluation it is difficult to determine a valid diagnosis, never mind trying to define a plan for treatment.

NJ Assembly to Consider New Workers' Compensation Bills

C O M M I T T E E N O T I C E

TO: MEMBERS OF THE ASSEMBLY LABOR COMMITTEE

FROM: ASSEMBLYMAN JOSEPH V. EGAN, CHAIRMAN

SUBJECT: COMMITTEE MEETING - JUNE 12, 2008

The public may address comments and questions to Gregory L. Williams, Committee Aide, or make bill status and scheduling inquiries to Alfonsina Mavros, Secretary, at (609)984-0445, fax (609)777-2998, or e-mail: OLSAideALA@njleg.org.

Written and electronic comments, questions and testimony submitted to the committee by the public, as well as recordings and transcripts, if any, of oral testimony, are government records and will be available to the public upon request.

The Assembly Labor Committee will meet on Thursday, June 12, 2008 at 10:00 AM in Committee Room 15, Fourth Floor, State House Annex, Trenton, New Jersey. The following bills will be considered:

A-1581Cohen/EganIncreases workers' compensation for loss of hand or foot.
A-2593Scalera/EganRequires reporting of wage records under certain solid waste contracts.
A-2934Conners/Conaway(pending intro)Allows persons affected by certain plant closings, transfers and mass layoffs to receive temporary suspension of payment of interest on mortgage loans.
A-2935Conaway/Conners(pending intro)Provides for expedited injunction for violations of law requiring prenotification of certain plant closings, transfers and mass layoffs.
A-2936Conaway/Conners(pending intro)Concerns access to certain job training courses for employees affected by plant closings, mass layoffs or transfer of operations.
A-2966Cohen/Egan/Giblin(pending intro)Increases power of judges of compensation to enforce workers' compensation law.A-2967Egan/Cohen/Giblin(pending intro)Strengthens enforcement against employers for failure to provide workers' compensation coverage.
A-2969Cohen/Egan/Giblin(pending intro)Expands the membership of the Compensation Rating and Inspection Bureau.
A-2970Egan/Cohen/Giblin(pending intro)Makes failure to provide workers compensation coverage a violation of "New Jersey Insurance Fraud Prevention Act" and crime of insurance fraud.

Issued 6/6/2008 For reasonable accommodation of a disability call the telephone number or fax number above, or TTY for persons with hearing loss (609)777-2744/toll free in NJ (800)257-7490. The provision of assistive listening devices requires 24 hours’ notice. Real time reporter or sign language interpretation requires 5 days’ notice. For changes in schedule due to snow or other emergencies, call 800-792-8630 (toll-free in NJ) or 609-292-4840.

Will New Jersey’s Injured Workers Continue to Silently Wait in Pain?

The NJ legislature is bogged down in controversy over what direction to take in order to respond to the State’s injured workers. While proposed administration legislation has passed through the Senate Labor Committee, the actual voices of the injured remain silent. No injured workers have yet testified before the legislature.

Without a master plan to address the issues raised in the Star Ledger series, the NJ Legislature is attempting to address specific issues and not considering some other thoughtful legislative proposals that have been pending for sometime. These include not only those outlined in my prior article introduced by Senator Sweeney and Assemblyman Cohen, but also A2846 and S785 which permits a COLA increase to benefits.

As the employers and insurance carriers continue to raise their voices, the silence of the injured workers is both eerie and foreboding.

NJ Beneficiaries Wait for Supplemental Increase in Workers’ Compensation Benefits

For almost 2 years New Jersey’s most severely injured and their families have been waiting for the legislature to act upon a law to provide for a cost of living increase of their benefits. The legislation, S-1005, would increase benefits of those injured after December 31, 1979. The bill was stalled in the legislature as the parties ironed out technical issues concerning the Social Security reverse offset. NJ is one of the few States remaining that allow workers’ compensation insurance carriers to benefit from Social Security offset rules.

Additionally NJ has side stepped the triennial increase that is provided for under the Social Security Regulations causing NJ’s injured workers not to be allowed to obtain any additional increases in benefits afforded by application of that provision of the Federal law.

………………………..
The Senate Labor Committee reports favorably Senate Bill No. 1005.
This bill provides, from July 1, 2006 forward, an annual cost of living adjustment in the weekly workers' compensation benefit rate for any worker who has become totally and permanently disabled from a workplace injury at any time after December 31, 1979 and for the surviving dependents of workers who have died from a workplace injury at any time after December 31, 1979.
The cost of living adjustment would be an amount such that, when added to the workers' compensation weekly benefit rate initially awarded, the sum would bear the same percentage relationship to the maximum benefit rate at the time of the adjustment that the initial rate bore to the maximum rate at the time of the initial award, except that the amount of the adjustment shall be reduced as much as necessary to ensure that the sum of the adjustment and the amount initially awarded does not exceed the amount which would cause any reduction of disability benefits payable under the Federal Old Age, Survivors and Disability Act. The amount of the adjustment would be paid from the Second Injury Fund (SIF), which is supported by a uniform assessment spread out evenly over all employers and insurers.
Current law requires such annual cost of living adjustments (COLAs) in the workers' compensation benefit rate for death and permanent total disability to be paid from the SIF, but only in cases in which the injury or death occurred before January 1, 1980. The bill extends the adjustments to cases originating after December 31, 1979, although the adjustments would apply only to benefits paid on those claims after July 1, 2006.
The bill makes no change in the provisions of sections 1 and 9 of P.L.1980, c.83 (C.34:15-94.4 and 34:15-94.5), which provide for the reduction of certain portions of workers' compensation benefits by the amount of Social Security disability benefits paid. In addition, the bill expressly states that the supplemental benefits shall not be paid in a manner which in any way changes or modifies the provisions of those sections.