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Does New Jersey Have Something Similar to Partial Temp Benefits in Workers’ Compensation?

By on May 18, 2015 in Compensability with 3 Comments

The old adage is that New Jersey is a not a partial temp state, but is that really true?  In some states, like New Hampshire, an employee who returns to work but due to disability cannot earn the amount he or she was earning before the work injury may be eligible for significant benefits.  The adjuster may pay the employee 60% of the difference between pre- and post-injury earnings and that may continue for up to 262 weeks.  But this applies to a situation after maximal medical improvement.   New Jersey clearly does not have any requirement like this because New Jersey is not really a wage loss state:  it is a functional loss state which compensates injured workers after maximal medical improvement with dollars that correspond with the percentage of loss of bodily function.

But what about this increasingly common situation?  Ashley Franklin works for Krogers Inc. in the deli department. She earns $20 per hour for a 40-hour week.  She makes $800 per week.  She fractures her leg at work and is out of work for the month of January 2015, receiving $560 per week in temporary disability benefits.  Krogers offers Ashley a modified duty sedentary job for the month of February.  The workers’ compensation doctor restricts her to four hours per day, and she makes $400 per week, half her normal wage, for the month of February. She works half a day for four straight weeks. Ashley calls the adjuster and asks, “what about the other $400 per week I am losing?”

Ashley reaches maximal medical improvement on March 1, 2015.  She contacts a lawyer about her loss of wages in February, complaining as follows: “When I was working the job, I was making $800 per week.  On temporary disability, I was getting $560 per week tax free.  Now I am working on modified duty, limited to half a day by my comp doctor, and I am earning less than I was on temporary disability — and it’s all taxable!”

This question comes up every month in this practitioner’s practice.  Which of the following should the claims examiner tell Ashley?

  1. “New Jersey does not have partial temp. You get nothing.”
  2. “We will pay you $160 weekly in temp benefits to get you to $560, your temp rate.”
  3. “We will pay you $280 in temporary disability benefits weekly, half of what you were paid while on temporary disability.”

To answer this question, the practitioner has to study N.J.S.A. 34:15-38. That is the section which explains how to pay temporary disability benefits.  The question is whether New Jersey compensates only for loss of whole days or fractions of days.  Here is what the statute says:  first you determine the first day that the employee cannot work due to the accident up to the first day the employee can return to work and continue at work.  In Ashley’s scenario that is 28 days.  Then you “subtract from the number the waiting period and any day and fraction thereof the employee was able to work during the this time, and divide the number by seven.”  The statute concludes, “the resulting whole number and seventh will be the required period for which compensation is payable on account of temporary disability.”

The language of the statute is confusing.  On the one hand, it recognizes a partial loss of a day by saying “any day and fraction thereof the employee was able to work.”  That would suggest that Ashley has a valid claim for two weeks of temporary disability benefits because she lost 20 half days. On the other hand, the statute speaks in terms of the “resulting whole number and seventh.”  The intention of the legislature is arguably less than clear in reading this statute.

There are no published decisions on this issue.  In fact, there is only one decision in the Division of Workers’ Compensation directly on point, namely Soto v. Herr’s Foods, Inc., 2012 NJ Work. Comp. LEXIS 4 (September 7, 2012).  That case also involved a situation where the injured worker was limited to four hours per day by the treating doctor while on light duty.  Mr. Soto was getting $683.31 per week on temporary disability but was returned to light duty earning a net payment of $329.43 per week, which was $353.88 less per week than he was earning on temporary disability.  The Honorable Emille Cox ruled in favor of the petitioner:

It seems rather obvious to this Court that if Respondent is responsible for the payment of temporary disability benefits, and, in this case, the amount to which Petitioner is entitled is $683.31 per week, to allow Respondent to provide minimum light duty and only pay the Petitioner an amount less than $683.31 to which he is entitled defeats the purpose of both the temporary disability and the light duty provisions of the workers’ compensation statute.

Judge Cox did not call this temporary partial disability benefits.  His decision was not appealed, no doubt a wise decision by the employer.  The term temporary partial disability refers more to the example at the beginning where an employee returns to work on a full-time basis earning less than he or she earned before the injury well after maximal medical improvement.  The question in Ashley’s scenario is limited to payment before she reaches maximal medical improvement.  It is this:  is temporary disability defined in New Jersey to include only whole days lost or parts of days where the treating doctor will not allow the worker to work more than parts of days?

In this practitioner’s experience, most workers’ compensation judges agree strongly with Judge Cox, and in fact most employers also agree that modified duty when limited to half days by the treating doctor should not result in a financial penalty to workers.  In other words, the employee restricted to working half a day by the workers’ compensation doctor should not see his or her compensation drop below the amount earned in temporary disability benefits.

The general consensus is that something must be done in Ashley’s situation because it seems inequitable for her to earn less on modified duty half days than she was earning while out of work receiving tax free temporary disability benefits. Where there remains some difference in opinion is how much Ashley should be paid over and above the $400 in earnings for half days of work that she has lost. The way Section 38 reads in subtracting any day and fraction thereof that the employee was able to work suggests that if this issue gets to the Appellate Division, the Court would order the employer to pay 70% of the four weeks of half days lost by Ashley in the month of February.  That would mean she would get paid $280 per week in temporary disability benefits.  Every two days lost becomes one day of temporary disability benefits. Adding that to the $400 per week in earnings, she would be earning $680 per week.  Of that amount $400 per week would be taxable, putting her basically in the same position she was in while out on temp earning $560 per week.

In the end, New Jersey needs a published decision by the Appellate Division to resolve this issue.  Absent that, employers have to do what they perceive to be both consistent with the law and fair under the law.

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About the Author

About the Author:

John H. Geaney, a shareholder and co-chair of Capehart Scatchard's Workers' Compensation department, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.

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There Are 3 Brilliant Comments

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  1. Outstanding post John. I couldn’t agree more that a claimant should not be penalized for accepting modified-duty or reduced hours work, otherwise they are better off not returning to work.

  2. I wrote an article on “Workers’ Compensation Temporary Disabilitiy Cash Benefits” in the Nonvember/December 2008 Issue of the Workers’ Compensation Policy Review (WCPR). I wrote that all but four states (Kentucky, New Jersey, Ohio, and West Virgini)a provided temporary partial disability (PTD) benefits. When I discussed the article with the New Jersey Advisory Council on Workers’ Compensation, Renee C. Ricciardelli, who was then the Administgrative Supervisory Judge of the Division of Workers’ Compensation, stated that New Jersey did provide TPD benefits She prepared a satement entitled “Temporary Disability Benefits in New Jersey” explaining her position. My article in the WCPR and Judge Ricciardelli’s statement can be downloaded without charge from http://www.workerscompresources.com

  3. Gwen Orel says:

    This is exactly the situation im in. I’m working restricted duty and making less per week than I was when I was out completely (though possibly because benefits are subtracted.) a lawyer has told me they can not force me to use sick time or personal time so I didnt )I did at first because human resources told me to so now I have no sick days left). But it’s not clear to me how I’ll be paid, because the situation is dragging on despite the fact that I’m low paid I’ll be out hundreds of dollars. Help! How do I get paid? Do we sue when it’s done?

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