New Legislation Affecting Voluntary Payments In New Jersey Workers Compensation Claims

Over the past several years, various attempts have been made to amend the New Jersey Workers Compensation Act in regards to voluntary payments. The New Jersey Workers Compensation Act contained a provision, Section 64, which allowed an employer or workers compensation insurance carrier to extend a payment known as a “voluntary tender” to an injured worker.  The Statute provides that when a voluntary payment is extended in good faith and within a reasonable time, described as either within 26 weeks from the date of the notification to the employer of an accident (or occupational disease) or the injured employees final active medical treatment from the accident or within 26 weeks after the injured employee returns to work, the “tender” is considered “bona fide.”  The “bona fide” and reasonable time distinctions were important, creating a mutual benefit for both the injured employee, employer and workers compensation insurance carrier.  The purpose and benefit of this voluntary tender payment was two-fold: 1) to provide compensation or an advance of permanent partial disability benefits to the injured worker; and 2) relieve the employer and workers compensation insurance carrier’s liability for attorney fees, limited to the amount of the voluntary tender.

On August 24, 2018, Governor Murphy signed important legislation, amending Section 64 of the New Jersey Workers Compensation Act. The bill, introduced on March 5, 2018, amends paragraph (c) of Section 64 and revokes the benefits afforded to employers and workers compensation insurance carriers in providing bona fide voluntary tenders of permanent disability benefits.  Under the enacted Section 64 amendments, the injured worker’s attorney is now entitled to legal fees for all compensation benefits tendered after the establishment of an attorney-client relationship pursuant to a written agreement.  The amendment raises several questions and dramatically impacts the landscape of New Jersey Workers Compensation by not only stripping an employer and insurance carrier of the benefits associated with extending the payment, but also creating an unnecessary financial hardship to the injured worker that the Act is designed to protect.

Should you have further questions or wish to discuss how the Section 64 Amendments will affect your workers compensation claims, please contact the Workers Compensation Group at Brown & Connery LLP at 856-854-8900.

By: Eric E. Fingerman, Esquire
Associates at Brown & Connery, LLP