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General Business

The Senseless Changes to Worker’s Comp Law

Since the beginning of the pandemic, the nation’s front-line workers have been rightfully hailed as heroes, and everyone from the largest corporations to the smallest businesses have looked for ways to honor and support them. That’s as it should be.

But not every gesture of support makes sense. Legislative leaders passed a bill, which was recently signed into law by Gov. Phil Murphy, that supporters say will help essential workers, but serves only to put employers on the hook for big insurance premium increases for benefits that the federal government had already agreed to fund.  

It’s a law that makes no sense. NJBIA had been urging Gov. Phil Murphy to veto the legislation (S-2380) because it foists the cost of coronavirus infections on the state’s worker’s compensation system.  

Virtually all New Jersey workers are covered by worker’s comp, which pays for treatment and lost wages due to injuries or illnesses sustained at work. This would include COVID-19. Under current law, if there’s a question whether an illness is work-related or not, the burden is on the employee to prove the illness was contracted at work.  

S-2380 turns this on its head by creating a presumption that COVID-19 infections occurred at the workplace for certain essential employees, and leaving it up to the employer to prove that it didn’t. This might have made sense if it were limited to the period when the state was under the stay-at-home order, but that’s not the case. Hence, it is nearly impossible to know if an employee contracted the virus at work, or at, say, a family gathering. 

Given all the places a person can contract the virus, it is arbitrary to presume that an employee was infected at work. It is also nearly impossible to prove a person did not contract the virus at work. In effect, the law makes it New Jersey employers’ responsibility to pay for potentially every essential worker, defined in extremely broad terms beyond first responders and supermarket workers, who gets sick no matter where they became infected.  

An industry report put the potential cost at between $400 million and $18 billion. 

What makes the issue so frustrating for NJBIA is that federal programs are in place to take care of these costs. Health insurance plans are required to cover the cost of COVID-19 treatments, including testing; the Families First Coronavirus Response Act requires employers to provide up to two weeks of paid leave for coronavirus illnesses, which they can recoup through refundable payroll tax credits; and the unemployment bonus payments program continues, though at a lower rate.  

This law forgoes all of that federal aid and places the burden on the backs of New Jersey employers who are already struggling. NJBIA does not understand the logic of this position. 

NJBIA did try to meet legislators halfway by offering amendments. Limiting the scope of the law to the time period when the governor’s stay-at-home Executive Order was in force, for instance, would have focused benefits on employees who were compelled to go to work in a much different healthcare climate. Unfortunately, this suggestion was ignored. 

Back in March, as the state struggled to meet society’s immediate public safety and healthcare needs, businesses and institutions took effective measures such as mandating masks, enforcing social distancing, and placing strategic barriers.  

These are all necessary to protect workers. S-2380 is not. It needlessly throws money at a problem that already has plenty of federal resources available to tackle it, and sticks the bill to a business community reeling from a drastic economic recession.

To access more business news, visit NJB News Now.

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