State News : New Jersey

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New Jersey



Few scenarios generate more questions from clients than whether a carrier or third party administrator in New Jersey can cut off temporary disability benefits when an employee engages in part-time employment while receiving temporary disability benefits for the job-connected injury.   This is a much bigger issue than it was 30 years ago precisely because so many New Jersey employees have more than one job. Consider a situation where the carrier starts to pay temporary disability benefits to an injured worker but finds out a few weeks later that the worker has continued to work in his or her part-time job without losing any time from that second job. Should temporary disability benefits be stopped?

We begin the answer with the language in the statute under N.J.S.A. 34:15-38, which states that temporary disability benefits must be paid for days or fractions of days that the employee is unable to work.  Such benefits end when “the employee is able to resume work and continue permanently thereat.”  Note that the statute does not say “resume work at the injury-connected job.”  It simply says “resume work.”  The argument that many workers’ compensation professionals make is that if an employee returns to work anywhere, temporary disability benefits should cease.

There are no helpful reported cases on the meaning of “resume work.”   Not getting paid may be a factor according to a reported appellate division case entitled, Tobin v. All Shore All Star Gymnastics, 378 N.J. Super. 495 (App. Div. 2005).  In that case the petitioner, the owner of the company, suffered work injuries leading to the receipt of temporary disability benefits.  She was released by her treating doctor to do light duty work but she said that she could not use her shoulder.  She used to do physical work at the gym which she owned, and said that there was no light duty work for her.  However, she admitted that she was in fact supervising operations at the gym without pay.  She was able to do this because it did not involve use of her injured shoulder.  The carrier stopped temporary disability benefits.

The Judge of Compensation found that temporary disability benefits should not have been stopped solely because petitioner could supervise activities at the gym.  The Appellate Division affirmed the ruling in favor of petitioner, noting that the ability to do light or intermittent work is not inconsistent with the receipt of temporary disability benefits.  One key fact in this case, however, was that petitioner was not being paid.  That makes this case distinguishable from the question posed in this blog.

Let us next consider the unreported case of Morris v. Township of Washington, No. A-2374-99T2 (App. Div. January 16, 2001).  In that case, the holding was that an injured employee in receipt of temporary disability benefits could do some occasional part-time realtor work while recovering from her work injuries without losing her temporary disability benefits.  This case is much more on point to our question, but it is unreported and therefore not precedential.  The emphasis in this case was on occasional work being done by a part-time realtor, who did actually receive commissions from that work.

As in all legal situations, the facts are always crucial.  If the injured worker who is out of work is only making phone calls in the morning to call in substitute teachers for his part-time job, most if not all judges would be likely to find that temporary disability benefits should still continue.  Other judges may focus on the number of hours involved in the part-time job or the physicality of the part-time job.  If the part-time job is physically demanding for a person who is out of work and receiving temporary disability benefits, that information would likely lead to cessation of benefits. In cases like this, it is wise to send the information about the part-time job to the treating doctor for his or her consideration.  This information could bear on whether the employee has reached maximal medical improvement.

One other factor that should be mentioned is whether the injured employee has denied working part-time only to be later found to be doing part-time work while receiving temporary disability benefits.  This fact pattern moves the case more to a more powerful argument of fraud or deliberate misrepresentation.  Adjusters and treating doctors should ask at the outset if the employee does have a part-time job and if the employee is performing that work during the treatment phase of the case.  Counsel for petitioners often point out that their clients are not aware that they are doing anything wrong by continuing in their part-time employment, particularly if the work is not physical.

The best argument for employers is that temporary disability benefits should not be available for someone who is found to be working a substantial number of hours in a part-time or near full-time second job.  Frankly, it is an unsettled area of law. When the right case reaches the appellate division or Supreme Court, greater guidance will emerge for practitioners.  Most employers and adjusters are very practical in responding to this situation.  They realize that doing a few hours of week of a non-physical nature will not be viewed the same by the judge as working 20 or 30 hours per week in a second job while receiving temporary disability benefits.



John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at