Workers' Compensation Overview
A review of the New Jersey Workers' Compensation System by Workers' Compensation Specialists, Kuttner Law Offices.
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The workers’ compensation system in New Jersey was designed to provide injured workers with prompt medical attention and wage replacement benefits when they are disabled due to a work injury. There is no need for an employee to prove that the employer committed negligence in order to collect benefits. As long as the injury occurred during the course of employment, the injury is considered “compensable” under the New Jersey Workers’ Compensation Act, N.J.S.A. 34:15-1 et seq. In other words, even if the employee injures himself while tripping over his own two feet at work, he is potentially entitled to benefits. The workers’ compensation insurance carrier must pay 100% of all related medical treatment. During the time that the employee is unable to work while recovering from his injuries, he is entitled to be paid 70% of his average weekly wages, up to a maximum amount which changes every year. After he has been discharged from medical treatment, the employee may also be entitled to receive a percentage of permanent disability benefits. If the work injury leads to death, the employee’s dependents are entitled to receive benefits, based upon the employee’s average weekly wage. Unlike a negligence claim, a workers’ compensation claimant is not entitled to receive compensation for “pain and suffering,” and miscellaneous expenses. However, if the employee sustained a permanent injury as a result of the work accident, he is generally entitled to receive benefits for a certain number of weeks, based upon a schedule of disabilities set forth in the Workers’ Compensation Act.
The workers’ compensation insurance carrier must pay 100% of all related medical treatment. The injured employee does not owe any co-payment or deductible. However, that treatment must be pre-authorized by the employer’s workers’ compensation carrier. The difficulty for injured workers is that the employer (referred to as the “Respondent” in the Division of Workers’ Compensation, hereinafter “DWC”) chooses the doctor and has the right to “control” the treatment. Unfortunately, it is not uncommon for a carrier to hold up the worker’s treatment by failing to authorize it in a timely manner. The good news is that most Judges will order the carrier to pay for any treatment recommended by the authorized treating physicians. If an authorized physician recommends treatment which is denied by the workers’ compensation carrier, a “Motion for Medical Treatment” should be filed with the DWC, to compel the carrier to pay for the treatment.
If the carrier believes that the authorized physician is over-treating the patient, or is not returning him to work quickly enough, the carrier may choose to schedule an “independent” medical examination (known as an “IME”). The purpose of the IME may be to direct the treatment to a more appropriate medical expert. Sometimes though, the IME is specifically scheduled to create a basis for cutting off medical and/or temporary disability benefits to an injured worker. Unless there is a reason to question the competence of the authorized treating physician, many workers’ compensation attorneys refuse to allow their clients to attend an IME prior to being discharged from the authorized treating physicians. If the independent medical consultant finds that no further treatment is necessary or related to the accident, the carrier may terminate further benefits on that basis. However, the Courts will generally accept the opinion of the authorized treating physician, who followed the patient over a course of time, over the opinion of an “independent” expert who performed a cursory examination.
The Workers’ Compensation Act provides that an employee is entitled to receive 70% of his average weekly wage, up to the state maximum, for the period of time that the authorized treating physician indicates he is unable to work and needs treatment. The average weekly wage is calculated based upon the employee’s average wage over the six month period immediately prior to the date of the accident. The average weekly wage includes all overtime paid during that six month period. For accidents which occur in 2008, the state minimum temporary disability rate is $198 per week, and the maximum temporary disability rate is $742 per week.
If the authorized treating physician determines that the employee needs further treatment and is unable to return to work, he is entitled to receive temporary disability benefits. If the physician finds that the employee may return to work on a “light duty basis,” and the employer is willing to accommodate the specific work restriction set by the authorized physician, then temporary disability benefits will be suspended. On the other hand, if the physician recommends a return to work with a restriction (ie: lifting no more than 20 pounds), and the employer is unwilling to accommodate that restriction, then the carrier must continue paying temporary disability benefits.
Temporary disability benefits are, by definition, “temporary” in nature. Under the workers’ compensation statute, the maximum period of time temporary disability benefits may be paid is 400 weeks, which is approximately 7 ½ years. If an injured worker is still receiving active medical treatment at that point, and is unable to return to work, he is entitled to receive total permanent disability benefits. The injured worker must also be under active medical treatment with an authorized physician to be eligible for temporary disability benefits. Once the authorized physician determines that the patient has reached “maximum medical benefit” from treatment, then he is no longer entitled to receive temporary disability benefits, even if the treatment has not completely cured him and he cannot return to his prior occupation. For example, if an electrician injures his hands, and is no longer able to perform electrical work, his temporary disability benefits will be terminated the day his physician determines that he cannot improve with further treatment.
Once the injured worker has been discharged from treatment, the permanent disability phase of the workers’ compensation claim begins. In order to preserve the right to receive permanent disability benefits, a Claim Petition must be filed with the DWC within two years of the date any benefits were paid by the workers’ compensation carrier. Accordingly, the injured worker may file a Claim Petition any time within two years of the last authorized medical visit or temporary/permanent disability benefit.
The filing of the Claim Petition starts an adversarial proceeding in the DWC between the injured worker (known as the “petitioner” in the DWC) and the employer (known as the “respondent”). For all practical purposes though, the claim is made against the workers’ compensation insurance carrier, which is served with the Claim Petition by the DWC.
In order to evaluate the degree of permanent disability sustained by the petitioner, both the carrier and petitioner’s attorney will retain medical experts who are familiar with the New Jersey disability schedule. In general, both experts will provide exaggerated estimates of the disability for the purposes of negotiating a settlement of the claim. For example, a respondent’s expert may estimate the disability of an injured workers’ back injury as a 5% permanent partial disability. By contrast, the petitioner’s expert may indicate that the very same injury causes a 40% permanent partial disability. Most claims settle prior to trial, at a percentage of permanent partial disability benefits somewhere between the two expert estimates.
Sometimes an IME is scheduled by the carrier prior to the filing of a Claim Petition, in order to discourage the injured worker from retaining an attorney. Thereafter, the carrier will often offer the claimant a “voluntary” settlement, based upon the degree of disability estimated by respondent’s expert. If the independent medical expert estimates a disability of 5% partial permanent disability as a result of the accident, the carrier will often offer the claimant a settlement representing a 5% partial total disability. Unfortunately, unwitting claimants may believe that they have forfeited their rights to pursue the claim further by accepting this settlement. However, an injured workers’ right to be fairly compensated for his permanent injury cannot be unilaterally limited by the carrier. Rather, a final settlement can only be enforced when it is given the stamp of approval of a Judge of Compensation. Most claims are worth substantially more than the estimate of the carrier’s medical expert. Accordingly, a carrier’s voluntary tender of a percentage of permanent disability benefits should be considered only a down payment on the ultimate settlement award.
After a Claim Petition has been filed, and the petitioner attends permanency examinations with both the carrier’s medical expert, and the medical expert recommended by his attorney, the parties are ready to begin settlement negotiations. As indicated previously, most claims for partial permanent disability benefits settle somewhere between the estimates provided by the competing medical experts. The value of the claim will depend on several factors:
- The amount of lost time from work.
- The objective medical testing.
- The nature and amount of treatment provided
- The limitations caused by the injury.
The Court will set the permanent disability award based upon the degree to which the injury has limited the petitioner’s ability to work and engage in his usual activities. Even after a settlement has been reached for partial permanent disability, in most cases, the claim may be “reopened” within two years of the petitioner receiving his last check for workers’ compensation benefits.
In order to obtain fair compensation for the injuries sustained in an accident, injured workers’ should retain an attorney who has experience in the Division of Workers’ Compensation. It is illegal for a workers’ compensation attorney to require a fee to be paid in advance by a client. Rather, the attorneys’ fees are set by the Judge of Compensation, to be paid out of the proceeds of a settlement or judgment. The Judge may set the attorneys’ fee at a maximum of 20% of the award, out of which the insurance carrier may be ordered to pay more than half of the petitioner’s attorneys’ fees. If you have any questions about your rights, please feel free to call (973)467-8300 for a free consultation or visit my website at www.kuttnerlaw.net