The New Jersey Business & Industry Association (NJBIA) urged legislators to vote no on a bill that would increase workers’ compensation costs for most employers in New Jersey. The measure is scheduled for consideration on the floor of the Senate on Thursday.
S-929 (Sweeney, Madden) would impose an annual cost-of-living adjustment (COLA) on workers’ compensation benefit rates for certain disability cases that occurred after 1980. The extra money would be generated by increasing the surcharge employers pay on their premiums to maintain New Jersey’s Second Injury Fund for injured workers.
The measure will cost an estimated $58 million after a three-year phase-in.
The New Jersey business community funds the entire workers’ compensation system. Businesses fund benefits by paying premiums to carriers to administer claims on their behalf or simply self-fund their own benefits. There is no match by the employee and no additional funds paid from general State revenue. Further, there is no assessment of fault in the system.
“Workers’ compensation rates for New Jersey companies have been rising steadily in recent years,” said NJBIA Vice President Christine Stearns. “This legislation would push workers’ compensation costs even higher. In a ranking of state workers’ compensation premium rates, New Jersey went from 23rd in 2006 to 7th in 2012.
“New Jersey’s existing workers’ compensation system works well for both employers and employees,” Stearns said. “It offers appropriate benefits to those who need them and provides stable, predictable costs for employers. This bill would upset that balance.”