A Capehart Scatchard Blog

NJ Governor Signs S2476 Supplementing Benefits For Surviving Dependents Of Essential Employees

By on April 23, 2021 in Legislation with 0 Comments

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 60th 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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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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