How Does Workers Compensation Work in New Jersey | Part Two

Workers' Compensation - Wheelchair BoundIn our last blog article (How Does Workers Compensation Work in New Jersey | Part One) we noted that the “Schedule of Disabilities and Maximum Benefits” is issued annually by the New Jersey Department of Labor.  The 2021 pdf version is found at “Schedule Of Disabilities And Maximum Benefits Exclusive Of Amputation And Enucleation”.

The point of this blog is to show that New Jersey workers’ compensation benefits are anything but trivial in terms of income replacement, not to mention medical benefits and permanent or partial permanent disability benefits.

Let’s assume a typical case where a petitioner (or claimant) sustained a permanent partial disability of 17.5%, for example. This injury was a result of a work-related back injury that occurred during 2021.  According to the chart, the “gross” award is calculated on the basis of 105 weeks at the rate of $272.38 a week for a total of $28,600.00.

Now, let us assume the same injury occurred in 1981, some 40 years ago. The same award of 17.5% of PPT (Permanent Partial Total) was also made. The chart looks the same today and as it did back in 1964, i.e. the same calculation of 105 weeks. Except here the difference is that the weekly rate was only $49.25 in 1981 for a total gross award of only $5,172.00.

Talk about inflation! That’s an increase of over 550%.

By the same token in order to receive the maximum temporary disability benefits of 70% of one’s weekly wages in 1981, an employee had to earn at least $199.00 a week. If the same individual were injured today, he or she would be entitled to maximum weekly benefits based on the same 70% of gross weekly income of at least $969.00.  In other words, the maximum temp rate gradually jumped from only $49.25 a week to $272.38 a week in 20 years.

Similar increases in compensation rates apply across the board. This is readily observable when reviewing the columns on the chart depending on the category of the injury.

It should also be noted that there is something surprising about the incremental increase in benefits as the percentage of one’s partial total disability increases. An award in excess of 30% of partial total disability results in a significant and disproportionate increase in the number of weeks of compensation and the dollar amounts rises disproportionately.

In dollars and cents for 2021, we go from $56,934.00 for 30% of PPT to $90,400.00 for 33% of PPT.  That is known as the “hump”. Insurers are therefore understandably reluctant to settle typical back and neck or head injury claims for over 30% of PPT, even when surgical intervention was required.

Of course, there is no avoiding the outcome if the injury and resultant permanent disability are serious enough to restrict one’s employability. This will result in disability awards which frequently can far exceed 30% of PPT.  (The chart reflects entitlement to $552.330.00 at 95% of PPT).

If an injury results in 100% of disability it is “Total Disability.” Then the claimant will be entitled to receive the amount which represents the temp rate, i.e. 70% of his or her weekly earnings, for as long as the injury prevents one from gainful employment. This can be for the duration of life.

In a future blog I will discuss how counsel fees and costs are allocated.  In due course I will also explain “The Second Injury Fund” and its impact in cases of total disability.

You can learn more on our Workers’ Compensation page.

Please call us at 856.235.1234 for a confidential, no-obligation consultation if you are a worker injured while at work. Or please use our contact form.

Uri Taenzer