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Earlier this year the new hand and foot bill became effective on January 21, 2020. This bill marked a significant change in the New Jersey Workers’ Compensation Act. The language was unambiguous in augmenting the number of weeks for injuries of the hand, foot and fingers. However, the language was less than clear concerning its effective date. Did it apply only to cases filed after January 21, 2020? Did it apply to all cases pending as of January 21, 2020?
On October 30, 2020, Governor Phil Murphy signed legislation amending L. 2019, c. 387 to clarify that the law was intended to apply to cases that were pending in the Division but not yet settled and cases that were filed on or after the date of enactment. Now the question is what do practitioners and judges do in regard to orders that were entered over the past 10 months using the pre-2020 rates for a hand or foot injury?
Before addressing this issue, let’s recap how this law changes New Jersey Workers’ Compensation Act. Until the passage of this law, under N.J.S.A. 34:15-12 an injured worker would receive 2.45 weeks for each percentage of compensation for hand injuries. The law increased the weeks to 2.6 for each percentage of compensation until the level of 25%. At that level and above, each percentage gets compensated at 3 weeks.
Similarly, the new law raised the long-standing compensation for foot injuries from 2.3 weeks per percentage to 2.5 weeks until the level of 25%. At that level and above, each percentage gets compensation at 2.85 weeks. It should be noted that the hand and foot law does not apply to reopener claims.
The law made some other minor changes such as raising the weeks for finger injuries and raising the death benefit to $5,000 from $3,500 for a person who died from any cause other than the accident or occupational disease during the period of payments of permanent injury.
When the law passed in January, judges and practitioners seemed to split fairly evenly around the state on whether the law should only apply to cases newly filed after January 21, 2020 as opposed to cases pending in the Division in January 2020 but filed before that date. Given the lack of consensus, many pending cases were settled using pre-2020 rates. That meant somewhat less money in permanency awards for petitioners.
In light of the recent legislation from the Governor clarifying the effective date of this law, employers and practitioners are now asking the following questions:
1. Did the parties expressly agree to use the pre-2020 rates as part of negotiations and was this agreement made part of the court record?
2. Did petitioner reserve rights to revisit the issue of the law’s effective date in the event of clarification from the Appellate Division or the Governor?
3. Was the issue never discussed or addressed at all on the record when the case settled?
In the first situation, respondents will argue that the order should not now be amended. In the second and third situations, applications to modify the award may be filed, or the parties may even consent in some cases to amend the prior order should they agree. When there is a genuine dispute, it will become important to obtain a copy of the transcript at the time the order was entered to see what the parties stipulated to on the record and whether rights were reserved. Correspondence between counsel before the date of settlement may also be relevant in determining the intent of the parties. Given that hand and foot injuries comprise a large percentage of New Jersey claims, one can anticipate significant disputes over the ensuing months.
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John H. Geaney, Esq., is a Shareholder and Co-Chair 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 jgeaney@capehart.com.