DEFINITIONS

The New Jersey Workers' Compensation Act (the "Act"), N.J.S.A. 34:15-1 et seq., is applicable only to accidents and occupational disease which arise out of and in the course of employment. Accordingly, an initial inquiry must be made as to the existence of an employment relationship before it can be determined if the accident or occupational disease in question is within the scope of the Act's coverage. The Workers' Compensation Court has exclusive jurisdiction to determine employment status. See Lefkin v. Venturini, 229 N.J. Super. 1 (App. Div. 1988). But See Kristiansen v. Morgan, 153 N.J. 298 (1998) (although the Superior Court and the Division have concurrent jurisdiction to decide an exclusivity defense, primary jurisdiction is in the Division because it can decide all aspects of the controversy in a manner binding on all the interested parties.)

Employer

The Act defines "employer" as synonymous with master, and includes natural persons, partnerships and corporations. See N.J.S.A. 34:15-36.

Statutory Employer

Although the term "statutory employer" is not contained in the Act, N.J.S.A. 34:15-79 does provide, in relevant part, that

Any contractor placing work with a subcontractor shall, in the event of the subcontractor's failing to carry workers' compensation insurance as required by this article, become liable for any compensation which may be due to an employee or the dependents of a deceased employee of a subcontractor. The contractor shall then have a right of action against the subcontractor for reimbursement.

Brygidyr v. Rieman, 31 N.J. Super. 450 (App. Div. 1954), defines a "contractor," within the intendment of N.J.S.A. 34:15-79, as one who contracts directly with the owner of a property for construction, or improvement, or repair, or work to be performed. That notwithstanding, there is now a discernible trend among Judges of Compensation to extend statutory employer liability beyond the traditional construction site scenario to include trucking and other industries.

Employee

The Act defines "employee" as synonymous with servant, and includes all natural persons, including officers of corporations, who perform service for an employer for financial consideration, exclusive of . . . casual employments, which shall be defined, if in connection w/ the employer's business, as employment the occasion for which arises by chance or is purely accidental; or if not in connection w/ any business of the employer, as employment not regular, periodic, or recurring[.]" N.J.S.A. 34:15-36. For a discussion on "casual employment," see Herritt v. McKenna, 77 N.J. Super. 409 (App. Div. 1962), cert. denied, 40 N.J. 213 (1963), where it was determined that a baby sitter who worked on eight occasions was not an employee because each service rendered was an isolated occurrence disassociated from the prior without continuity.

The Act is to be construed liberally so as to include all services that can reasonably be said to be employment, not only when the injured worker seeks this protection, but also when he attempts to have himself excluded from the coverage of the Act. See Hannigan v. Goldfarb, 53 N.J. Super 190 (App. Div. 1958). As such, the Courts are predisposed to find an employment relationship in most scenarios so as to bring as many persons as possible within the coverage of the Act.

The expectation of material benefit for self or for another, either directly or indirectly, is an essential criteria for employment. See Pickett v. Tryon Trucking Co., 214 N.J. Super. 76 (App. Div., 1986), cert. denied, 107 N.J. 149 (1987); Veit v. Courier Post, 154 N.J. Super. 572 (App. Div. 1977); and Cerniglia v. The City of Passaic, 50 N.J. Super. 201 (App. Div. 1958). As such, one who volunteers his services and neither receives nor expects to receive payment for himself or for a third person, is not an employee for workers' compensation purposes. See Armitage v. Mount Fern, 33 N.J. Super. 367 (Law Div. 1954).

An undocumented alien is entitled to workers' compensation benefits under the Act. See Fernandez-Lopez v. Jose Cervino, Inc., 288 N.J. Super. 14 (App. Div. 1996).

Special Employer/Special Employee

Where a general employer loans an employee to a special employer, the special employer also becomes liable for compensation if the following criteria are met:
(a) the special employee has made either an express or implied contract of hire with the special employer;
(b) the work being done is essentially that of the special employer;
(c) the special employer has the right to control the details of the work;
(d) the special employer pays the special employee's wages; and
(e) the special employer has the power to hire, discharge or recall the special employee.

The special employer/special employee relationship arises most commonly in the context of temporary staffing agencies. See Chickachop v. Manpower, Inc., 84 N.J. Super. 129 (Law Div. 1964); Kelly v. Geriatric and Medical Services, 287 N.J. Super. 567 (App. Div. 1996), aff'd 147 N.J. 42 (1996); and Antheunisse v. Tiffany & Co., 229 N.J. Super. 399 (App. Div. 1988), cert. denied, 115 N.J. 59 (1989).

Conway v. Mr. Softee, 51 N.J. 254 (1968), provides that in a dual employment scenario, the general employer and special employer are each responsible for one-half of the compensation due and owing the employee.

Independent Contractor

As the Act applies only to accidents and occupational disease which arise out of and in the course of employment, independent contractors are not entitled to workers compensation benefits. Accordingly, properly distinguishing between employees and independent contractors has important consequences.

In general, an employer retains the right to control the means and methods by which an employee performs his work. An independent contractor, however, is only responsible for the results of its labors and the person with whom he contracts to perform a service has no control over the means and methods by which that service is performed. See Pollack v. Pino's Formal Wear & Tailoring, 253 N.J. Super. 397 (App. Div. 1992), cert. denied, 130 N.J. 6 (1992).

The Appellate Division has applied two tests in determining an employment relationship – i.e., the "control test" and the "relative nature of the work test".

The "control test" is the older of the two and is based upon the theory that an independent contractor is one who carries on a separate business and contracts to do work according to his own methods, without being subject to the control of an employer except as to the results. Under the control test, the right to control is usually inferred from direct evidence of the right or exercise of control; right of termination; method of payment; and who furnishes the equipment. See Tofani v. LoBiondo Bros. Motor Express, Inc., 83 N.J. Super. 480 (App. Div. 1964), aff'd, 43 N.J. 494 (1964). The "control test" is satisfied so long as the employer has the right to control even if there is no actual exercise of that control.

The "relative nature of the work test" is the more modern inquiry in determining an employment relationship under the Act. Under the relative nature of the work test, an employment relationship exists if the evidence establishes a substantial economic dependence of the employee upon the employer and a functional integration of the employer's and employee's respective businesses. See Tofani above. This test is essentially an economic and functional one and the determinative criteria are not the inclusive details of the arrangement between the parties, but rather the extent of the economic dependence of the worker upon the business he serves and the relationship of the nature of his work to the operation of that business. Lesniewski v. W.B. Furze Corp., 308 N.J. Super. 270 (App. Div. 1998).

For illustration of the actual application of the "control test" and "relative nature of the work test," see Auletta v. Bergen Center for Child Development, 338 N.J. Super. 464 ( App. Div. 2001), cert. denied, 169 N.J. 611 (2001); Conley v. Oliver & Company, 317 N.J. Super. 250 (App. Div. 1998); and Kertesz v. Korsh, 296 N.J. Super. 146 (App. Div. 1996).

EXCLUSIVE REMEDY

General Rule

The New Jersey Workers' Compensation Act, (the "Act"), N.J.S.A. 34:15-1 et seq., ("the Act"), provides the exclusive remedy available to employees injured by accident during the scope of their employment. The Act's so-called "exclusivity provision," N.J.S.A. 34:15-8, enters by operation of law into every contract of hiring made in the State, and requires "a surrender by the parties thereto of their rights to any other method, form or amount of compensation or determination thereof." See Sager v. Howell Trucking Co., 54 N.J. Super. 113, (Law Div. 1959). The exclusive remedy provision of the Workers' Compensation Act prevents an employee from suing his employer or co-employee for negligent acts. See Port Authority of New York & New Jersey v. Honeywell, 222 N.J. Super. 11 (App. Div. 1987); Ramos v. Browning Ferris Industries, 103 N.J. 177 (1986) and Millison v. E.I. duPont deNemours & Co., 101 N.J. 161 (1985).

In exchange for the right to sue their employers in tort for potentially greater damages, employees under the New Jersey workers' compensation scheme are assured recovery of limited benefits in an expedited fashion without having to prove their employers' fault. See 1 Arthur Larson & Lex Larson, Larson's Workers' Compensation Law, §1.01 (2002). This exclusivity of remedy is primarily designed to "maintain the balance of sacrifices between employer and employee in the substitution of no-fault liability for tort-liability." See 6 Larson, §103.03.

In a dual employment scenario, the exclusive remedy provision of the Act precludes a special employee from suing a special employer, even if the latter did not pay workers' compensation benefits. See Antheunisse v. Tiffany & Co., 229 N.J. Super. 399 (App. Div. 1988), cert. denied, 115 N.J. 59 (1989) and Santos v. Standard Havens, Inc., 225 N.J. Super. 16 (App. Div. 1988). However, an employee of the borrowing corporation injured by a loaned employee may sue the lending corporation under the theory of "respondeat superior." See Volb v. G.E. Capital Corp., 139 N.J. 110 (1995).

The exclusive remedy provision of the act is not shared between corporate subsidiaries of the same parent corporation. As such, an injured employee of one corporate subsidiary can sue another corporate subsidiary in tort. See Vernon v. Supermarket Services Corp., 250 N.J. Super. 8 (App. Div. 1991).

The Intentional Wrong Exception

The so-called intentional wrong exception to the exclusive remedy provision of the Act permits an employee to sue his employer in a civil action for intentional wrongdoing. N.J.S.A. 34:15-8 provides in relevant part that:

If any injury or death is compensable under this article, a person shall not be liable to anyone at common law or otherwise on account of such injury or death for any act or omission occurring while such person was in the same employ as the person injured or killed, except for an intentional wrong.

In order to overcome the exclusive remedy provision of the Act, there must be a showing of a deliberate intent to injure. McGovern v. Resorts International, 306 N.J. Super. 174 (App. Div. 1997). As per Marinelli v. Mitts, 303 N.J. Super. 61 (App. Div. 1997), gross negligence or an abysmal lack of concern for the safety of employees does not amount to an intentional wrong sufficient to overcome the exclusive remedy provision.

A string of New Jersey Supreme Court cases beginning with Millison v. E.I. du Pont de Nemours & Co., 101 N.J. 161 (1985) have served to define what conduct constitutes intentional wrongdoing by an employer. In Millison, the Supreme Court adopted a "substantial certainty" standard to be utilized in evaluating employer intentional tort actions. Quoting W. Prosser & W. Keeton, The Law of Torts, §8 (5th Ed., 1984), the Court explained:

[T]he meaning of intent is that an actor desires to cause the consequences of his act or is substantially certain that such consequences will result from his actions. The mere knowledge and appreciation of a risk – something short of substantial certainty – is not intent. A defendant who acts in the belief or consciousness that an act is causing an appreciable risk of harm to another may be negligent, and if the risk is great the conduct may be characterized as reckless or wanton, but it is not an intentional wrong.

In Laidlow v. Hariton Machinery Co., 170 N.J. 602 (2002), the Supreme Court undertook another examination of the intentional wrong exception in the context of an industrial accident where the employer had disengaged a safety device for reasons of speed and efficiency. The Court delineated a two-prong test to be utilized as an analytical guide for judges who must consider and decide summary judgment motions based on the exclusivity provision.This test requires not only that the conduct of the employer be examined, but also the context of the event in question. As the Court instructed:

[T]he trial court must make two separate inquiries.The first is whether, when viewed in a light most favorable to the employee, the evidence could lead a jury to conclude that the employer acted with knowledge that it was substantially certain that a worker would suffer injury. If that question is answered affirmatively, the trial court must then determine whether, if the employee’s allegations are proved, they constitute a simple fact of industrial life or are outside the purview of the conditions the Legislature could have intended to immunize under the Workers’ Compensation bar.

The recent NJ Supreme Court case of Van Dunk v. Reckson Associates Realty Corp., 210 N.J. 449 (2012), demonstrates just how narrowly the Courts will construe the intentional tort exception of the Act's exclusive remedy provision. In Van Dunk, the Court held that an employer's willful violation of OSHA safety requirements does not, in and of itself, constitute an "intentional wrong" sufficient to overcome the exclusivity provision of the Workers' Compensation Act.

Notwithstanding its holding, the Van Dunk Court did distinguish the facts in that case from others that involved an employer's affirmative action to remove a safety device from a machine, prior OSHA citations, deliberate deceit regarding the conditions of the workplace, machine, etc., knowledge of prior injury or accidents, and previous complaints from employees. Such overt types of behavior on the part of employers seeking immunity under the workers' compensation bar have not been well-received by the Courts. See Mull v. Zeta Consumer Products, 176 N.J. 385 (2003) (employer's conduct in disengaging critical safety devices on a piece of equipment precluded summary judgment in favor of employer as employer had knowledge of the machine's dangerous condition due to prior accidents, employee complaints and OSHA violations); and Crippen v. Central Jersey Concrete Pipe Co., 176 N.J. 397 (2003)(reversing a summary judgment in favor of employer where employer intentionally deceived OSHA, deliberately failed to comply with directives of OSHA to address a dangerous condition, and had knowledge of the virtual certainty that a person could die in the confined spaces cited by OSHA.

JURISDICTION AND LIMITATIONS OF ACTIONS

General Rule

The Division of Workers' Compensation has exclusive original jurisdiction over claims for New Jersey Workers' Compensation benefits. See N.J.S.A. 34:15-49. The Division has the primary jurisdiction to decide issues of compensability and has the power to enter a binding judgment on issues of compensability. See Kristiansen v. State of New Jersey, 153 N.J. 298 (1998). A party does not have a right to elect to bring an action in Superior Court rather than the Division to resolve issues of compensability nor may an employee invoke the jurisdiction of the Superior Court simply by asserting that an accident is not compensable. See Kristiansen, supra. That notwithstanding, much of the law of compensability arises in matters in which the exclusive remedy provision of the Workers' Compensation Act, N.J.S.A. 34:15-8, is raised as an affirmative defense to claims of personal injury or death in Superior Court.

Subject Matter Jurisdiction

The Division of Workers' Compensation has jurisdiction over claims for workers' compensation benefits where New Jersey is:

(a) the place where the injury occurred; br>

(b) the place of the making of the employment contract;

(c) the place where the employment relationship exists or is carried out; or

(d) the place where the employee resides and the site of at least some employment contacts.

Extraterritorial Jurisdiction in Occupational Disease Claims

The Division of Workers' Compensation may exercise jurisdiction in extraterritorial occupational disease claims where there is a showing that:

(a) there was a period of work exposure in New Jersey which was not insubstantial;

(b) the materials to which petitioner was exposed were highly toxic; or

(c) the disease was obvious or disclosed while working in New Jersey.

Notice

Specific Incident Claims

N.J.S.A. 34:15-17 provides that

Unless the employer shall have actual knowledge of the occurrence of the injury, or unless the employee . . . shall give notice thereof to the employer within fourteen days of the occurrence of the injury, then no compensation shall be due until such notice is given or knowledge obtained. If the notice is given, or the knowledge obtained within thirty days from the occurrence of the injury, no want, failure, or inaccuracy of notice shall be a bar to obtaining compensation, unless the employer shall show that he was prejudiced by such want, defect or inaccuracy, and then only to the extent of such prejudice. If the notice is given, or the knowledge obtained within ninety days, and if the employee . . . shall show that his failure to give prior notice was due to his mistake, inadvertence, ignorance of fact or law, or inability, or to the fraud, misrepresentation or deceit of another person, or to any other reasonable cause or excuse, then compensation may be allowed, unless, and then to the extent only that the employer shall show that he was prejudiced by failure to receive such notice. Unless knowledge be obtained, or notice given, within ninety days after the occurrence of the injury, no compensation shall be allowed.

The primary objectives of the notice requirement are two-fold: (a) to afford the employer a timely opportunity to investigate the claim when the facts remain accessible; and (b) to enable the employer to provide medical care to minimize the employee's injury. See Brock v. Public Service Electric & Gas Co., 149 N.J. 378 (1997) Although failure to provide timely notice is an affirmative defense, the Courts have been consistently lenient in finding compliance with either the notice or knowledge requirement. See Gamon Meter Co. v. Sims, 114 N.J.L. 590 (Sup. Ct. 1935) (holding actual knowledge requirement fulfilled by employer's observation during course of employment that employee manifested unmistakable symptoms of chronic lead poisoning); A. Fishman Hat Co. v. Rosen, 6 N.J. Misc. 667 (Sup. Ct. 1928) (holding that notice from examining physician to employer regarding employee's disability from occupational disease satisfied statutory notice requirement); Mitchell v. Mucon Corp., 51 N.J. Super. 208 (Cty. Ct. 1958) (holding employee's report of disability to foreman sufficient to satisfy statutory requirement of actual knowledge by employer); Roberts v. Beitler, 34 N.J. Super. 470 (Cty. Ct. 1955) (rejecting claim of jurisdictional defect and holding that employee's discussion of dermatological condition with employer during course of employment satisfied statutory actual knowledge requirement); Calabria v. Liberty Mut. Ins. Co., 4 N.J. Super. 528 (App. Div. 1949), aff'd, 4 N.J. 64 (1950) (finding that examination of employee by company physician after chrome poisoning was at recognizable stage satisfied knowledge requirement and that letter from employee's counsel claiming compensation for chrome poisoning satisfied notice requirement).

The Act contains a separate provision for notification as pertains to traumatic hernia injuries. N.J.S.A. 34:15-12(c)(23) provides that:

Where there is a traumatic hernia, compensation will be allowed if notice thereof is given by the claimant to the employer within 48 hours after the occurrence of the hernia, but any Saturday, Sunday or holiday shall be excluded from this 48-hour period.

The Courts have been similarly lenient in finding compliance with the notice provision in the context of traumatic hernia injuries. See Salerno v. McGraw-Edison Industries, 59 N.J. 129 (1971) (worker's failure to report hernia to employer within 48 hours of work-related strain as required by statute did not bar claim since worker had no knowledge or reason to know of a compensable injury until a later examination by the employer's physician).

Occupational Disease Claims

The occupational disease notice statute, N.J.S.A. 34:15-33, was repealed in its entirety effective January 14, 2004.

Statute of Limitations

Specific Incident Claims

N.J.S.A 34:15-51 provides, in relevant part, that:

Every claimant for compensation . . . shall . . . submit to the Division of Workers' Compensation a petition . . . within two years after the date on which the accident occurred . . . or in case a part of the compensation has been paid by the employer, then within two years after the payment of compensation[.]

Medical treatment is a payment of compensation and extends the period for the tolling of the statute of limitations. See DeAsio v. City of Bayonne, 62 N.J. Super. 232 (App. Div. 1960). However, DeAsio holds that it is the provision of medical treatment and not the date of payment for that treatment that begins the running of the two-year period. Payment of medical costs or disability benefits under an employer-provided policy for work-related conditions are considered a payment of workers' compensation benefits for the purposes of extending the period for the tolling if the employer is aware of the existence of the work-related injury and the employee reasonably understood that such payments constituted, at least in part, compensation for an injury compensable under the Act. See Sheffield v. Schering Plough, 146 N.J. 442 (1996).

Occupational Exposure Claims

N.J.S.A. 34:15-34 provides, in relevant part, that:

[W]here a claimant knew the nature of the disability and its relation to the employment, all claims for compensation for compensable occupational disease except as herein provided shall be barred unless a petition is filed . . . within two years after the date on which the claimant first knew the nature of the disability and its relation to the employment.

In Bucuk v. Edward A. Zusi Brass Foundry, 49 N.J. Super. 187, cert. denied, 27 N.J. 398 (1958), the Court stated, "knowledge of the nature of [the] disability connotes knowledge of the most notable characteristics of the disease sufficient to bring home substantial realization of its extent and seriousness." Knowledge of the "nature" of a disability includes knowledge that the condition is compensable. See Earl v. Johnson & Johnson, 158 N.J. 155 (1999).

Although there is no Court decision speaking to the issue, where a petitioner knows the nature of his disability and its relationship to his employment and does not file a claim, but continues to be exposed, the Division of Workers' Compensation has held that the statute of limitations runs from the last date of exposure. As the Earl Court noted:

It appears to be the administrative understanding of the workers' compensation bench and bar that claimants who wait until the end of their exposure to bring claims involving occupational disease will not be denied that opportunity on statute of limitations grounds, assuming that they bring their actions within two years after the cessation of exposure if they know the nature of the disability and its relation to the employment. In many work places, workers feel pressure not to file claims for workers' compensation while they are still employed. The culture of the work place discourages workers from filing claims because to do so is seen as an act of disloyalty to the employer. Despite statutes prohibiting discrimination against workers who bring claims, workers still fear that taking action means risking their jobs.

The Division is free to continue to apply its administrative understanding of the statute until such time as the issue is squarely presented to a court and that court explicitly addresses the Division's interpretation.

ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT

General Rule

N.J.S.A. 34:15-7 provides in relevant part:

When employer and employee shall by agreement, either express of implied, as hereinafter provided, accept the provisions of this article, compensation for personal injuries to, or for the death of, such employee by accident arising out of and in the course of employment shall be made by the employer without regard to the negligence of the employer[.]

Arising Out of Employment

The requirement that a compensable accident arise out of the employment looks to a causal connection between the employment and the injury. See Coleman v. Cycle Transformer Corp., 105 N.J. 285 (1986). It must be established that the work was at least a contributing cause of the injury, and that the risk of the occurrence was reasonably incident to the employment. The Coleman Court devised the "but for" or positional-risk test in determining the requisite connection between the risk and the employment. The "but-for" test asks:

[W]hether it is more probably true than not that the injury would have occurred during the time and place of employment rather than elsewhere. Unless it is more probable that the injury would not have occurred under the normal circumstances of everyday life outside of the employment, the necessary causal connection has not been established.

The "but for" or positional-risk test contemplates three types of risk: [a] risks distinctly associated with the employment; [b] neutral risks; and [c] personal risks. See Coleman, supra.

Risks Distinctly Associated with Employment

Those risks distinctly associated with the employment include all obvious kinds of injury one thinks of as "industrial injury." See Howard v. Harwood's Restaurant Co., 25 N.J. 72 (1957) ("all the things that can go wrong around a modern factory, mill, mine, transportation system or construction project machinery breaking, objects falling, explosives exploding, tractors tipping, fingers getting caught in gears, excavations caving in and so on are clearly in this category and constitute the bulk of what not only the public but perhaps also the original draftsmen of compensation acts had in mind as their proper concern"). Injuries resulting from these types of risks are clearly compensable within the purview of the Act.

Neutral Risks

Neutral risks are defined as "uncontrollable circumstances" and "do not originate in the employment environment" but rather "happen to befall the employee during the course of his employment." See Gargiulo v. Gargiulo, 13 N.J. 8 (1953) (an employee, who while at work in the back yard of his employer's store, was injured when struck by an arrow that a neighborhood boy had shot in the general direction of a tree on the employer's property, received compensation because "but for" the employment, he would not have been in the line of fire and therefore would not have been hit). An injury resulting from a neutral risk such as a lightning strike may be compensable when the employee is in the course of his employment – i.e., when he is doing what he is supposed to be doing and is injured as a result of a risk totally unrelated to his employment activities.

Personal Risks

Personal risks are those personal proclivities or contacts of the employee wholly unrelated to the employment which give rise to the harm. See Coleman v. Cycle Transformer Corp., 105 N.J. 285 (1986) (benefits were denied claimant who set her hair on fire while lighting cigarette during lunch break because the cause of the accidental injuries were totally personal to the worker); Marky v. Dee Rose Furniture Co., 241 N.J. Super 207 (App. Div. 1990) (petitioner who was shot by former boyfriend was denied benefits for resulting injuries because her injury was due to her relationship with her rejected suitor and had nothing to do with her employment); and Money v. Coin Depot. Corp., 299 N.J. Super. 434 (App. Div. 1997) (fatal injury sustained by employee playing "Russian roulette" was not compensable because it was not due to a risk peculiar to employment, but rather "personal" to the employee). Risks falling within this classification do not bear a sufficient causative relationship to the employment to permit courts to say that they arise out of that employment.

An injury resulting from an idiopathic condition – i.e., a purely personal condition unrelated to employment – in combination with a condition specific to the employment is compensable. See George v. Great Eastern Food Products, Inc., 44 N.J. 44 (1965) (a factory worker who, as a result of an attack of dizziness induced by a cardiovascular condition, sustained a fractured skull when his head struck the concrete floor on which he was standing was entitled to workers' compensation benefits as the concrete floor was a condition specific to his employment).

Accidents occurring on the employers premises during the employee's personal time are not compensable. See Patterson v. The Atlantic Club, Docket No. A-0657-12T1, 2013 N.J. Super. Unpub. LEXIS 1716 (App. Div., decided July 11, 2013)(benefits denied a personal trainer injured on the employer's premises because she had changed out of her work clothing into her personal workout attire, was not with a client, and was working out on her own for her own benefit at the time of the accident); Sparrow v. La Cachet, Inc., 305 N.J. Super. 301 (App. Div. 1997) (a beautician, who after ending her own job responsibilities for the day, requested a facial and was burned in the process by hot water, was denied workers' compensation benefits despite the fact that the injury occurred at her workplace); and Zahner v. Pathmark Stores, Inc., 321 N.J. Super. 471 (App. Div. 1999) (a supermarket employee who sustained injuries when she slipped and fell after she punched out and started shopping for herself was not entitled to compensation because she was not working at the time). But see Chen v. Federated Dept. Stores, 199 N.J. Super. 336 (App. Div. 1985) (department store employee injured while shopping during lunch hour found to have suffered an accident arising out of his employment as such on-premises activity was both convenient for the employee and beneficial to the employer).

In the Course of Employment

The test defining when an accident arises "in the course of the employment" was laid down in Bryant v. Fissell, 84 N.J.L. 72 (Sup. Ct. 1913), and has since been consistently followed.

[A]n accident arises "in the course of the employment" if it occurs while the employee is doing what a man so employed may reasonably do within a time during which he is employed, and at a place where he may reasonably be during that time.

An employee need not actually be working in order to satisfy the "in the course of employment" test. In Secor v. Penn Serv. Garage, 19 N.J. 315, 321, 117 A.2d 12, 15 (1955), the Court recognized that an on-premises employee might not actually be working at the time he or she was injured but that in certain circumstances compensation nonetheless should be available. This so-called "minor deviation" rule considers personal habits or errands, such as smoking or making a phone call, as well as the basic human functions of eating and using the lavatory, to be in the "course of employment." However, there must generally be a finding that an off-premises worker is performing his work responsibilities at the time of the injury to be compensable. See Jumpp v. City of Ventnor, 177 N.J. 470 (2003) (a city employee, whose daily assignment required that he visit various sites within the city was denied benefits when he sustained injury at the post office while picking up his personal mail between assignments). But see Cooper v. Barnickel Enterprises, Inc., 411 N.J. Super. 343 (App. Div. 2010) (injuries sustained by employee while driving employer's truck from his union hall to a nearby delicatessen to get coffee were found compensable as a minor deviation from employment).

An employer always retains the power to expand the scope of employment by directing the employee to engage in tasks outside of the employee's general job duties. When an employer compels an employee's participation in an activity generally viewed as recreational or social in nature, the employer renders that activity work-related as a matter of law. Lozano v. Frank De Luca Construction, 178 N.J. 513 (2004). See also, Sager v. O.A. Peterson Construction Co., 182 N.J. 156 (2004). To recover under this theory of compulsion the employee must demonstrate an objectively reasonable basis in fact for his belief that participation in the activity was required. See Lozano, supra.

The Going and Coming Rule

N.J.S.A. 34:15-36 provides in relevant part:

Employment shall be deemed to commence when an employee arrives at the employer's place of employment to report for work and shall terminate when the employee leaves the employer's place of employment, excluding areas not under the control of the employer; provided however, when the employee is required by the employer to be away from the employer's place of employment, the employee shall be deemed to be in the course of employment when the employee is engaged in the direct performance of duties assigned or directed by the employer[.]

This so-called "going and coming rule" provides that employment begins when an employee arrives on the premises of his employer and ends when he leaves the premises. See Cannuscio v. Claridge Hotel & Casino, 319 N.J. Super. 342 (App. Div. 1999) (injury sustained on public sidewalk after leaving place of employment is not compensable); N.J. Manufacturers Insurance Co. v. Public Service, 234 N.J. Super. 116 (App. Div. 1989), cert. denied, 118 N.J. 178 (1989) (employee driving on access road two miles from employer's parking lot was not in the course of her employment when she was involved in a motor vehicle accident); and Plodzien v. Township of Edison Police Dept., 228 N.J. Super. (App. Div. 1989)(motor vehicle accident sustained by police officer in full uniform on his way to work was not compensable).

In Zelasko v. Refrigerated Food Corp., the Supreme court held that there are two exceptions to the going and coming rule: [a] the "special-mission" exception allows compensation at any time for employees required to be away from the conventional place of employment if actually engaged in the direct performance of employment duties; and [b] the "travel-time" exception allows portal-to-portal coverage for employees paid for travel time to and from a distant job site, or using an employer-authorized vehicle for travel time to and from a distant job site.

Special Mission Exception to the Going and Coming Rule

The "special-mission" exception to the going and coming rule allows compensation at any time for employees required to be away from the conventional place of employment if actually engaged in the direct performance of employment duties. See Zelasko, supra.

Travel to and from a special mission is considered to be in the course of employment. See Nemchick v. Thatcher Glass, 203 N.J. Super. 137 (App. Div., 1985)(injuries sustained by technician while traveling to trouble shoot a problem on a piece of equipment sold to customer deemed compensable); and Ehrgott v. Jones, 208 N.J. Super 393 (App. Div. 1986) (petitioner awarded compensation benefits for injuries sustained in motor vehicle accident on the way to the airport to fly to a professional meeting). However, injuries sustained while on a special mission, but not in direct performance of duties, are not compensable. See Mangigian v. Fran Warner Assoc., 205 N.J. Super. 422 (App. Div. 1985)(employee injured while returning to her motel room with food for her and her supervisor after having engaged in a period of exercise was not in the course of her employment); Ohio Casualty v. Aetna, 213 N.J. Super. 283 (1986) (motor vehicle accident sustained by claimant while using company vehicle on a special mission held not compensable as claimant was running a personal errand at the time of the accident); and Walsh v. Ultimate Corp., 231 N.J. Super 383(App. Div. 1990) (claimant's death in a motor vehicle accident while on special mission in Australia was held not compensable as it occurred on the weekend during a personal sight-seeing excursion).

Travel Time Exception to the Going and Coming Rule

The "travel-time" exception to the going and coming rule allows portal-to-portal coverage for employees paid for travel time to and from a distant job site, or using an employer-authorized vehicle for travel time to and from a distant job site. See Zelasko, supra.

In Brown v. American Red Cross, 272 N.J. Super. 173 (1994), a phlebotomist who traveled on a regular basis to a satellite Red Cross station was awarded compensation for injuries sustained in a motor vehicle accident while traveling from her home to a designated job site. As the Brown Court held:

Petitioner falls within the travel-time exception. She has no conventional work place. She travels from her home in her own vehicle to various donor sites selected daily by respondent. Travel is thus an essential component of her services upon which respondent relies and derives a direct benefit. [R]espondent recognized this benefit by agreeing to pay petitioner an identifiable amount of compensation . . . for the travel time as reflected in both the eight-hour guaranteed payment and respondent's policy to pay the phlebotomists for travel time beyond one-half hour from their respective residences.

However, reimbursement of travel expenses alone is not sufficient to bring travel within the course of employment. See Nebesne v. Crocetti, 194 N.J. Super. 278 ( App. Div., 1984). See also Scott v. Foodarama Supermarkets, 398 N.J. Super. 141 (App. Div. 2008) (the "travel time" exception to the going and coming rule does not apply where a salaried employee is reimbursed for gas, tolls and wear and tear on his vehicle, but is not paid wages for the time of his commute to and from work).

Additionally, the Act specifically provides for a "travel time" exception to the going and coming rule in the context of ridesharing or carpooling. N.J.S.A. 34:15-36 states in relevant part:

Employment shall be deemed to commence when an employee is traveling in a ridesharing arrangement between his place of residence or terminal near such place and his place of employment, if one of the following criteria is satisfied: the vehicle used in the ridesharing arrangement is owned, leased or contracted for by the employer, or the employee is required by the employer to travel in a ridesharing arrangement as a condition of employment.

The Premises Rule and Parking Lot Cases

N.J.S.A. 34:15-36 provides in relevant part:

Employment shall be deemed to commence when an employee arrives at the employer's place of employment to report for work and shall terminate when the employee leaves the employer's place of employment, excluding areas not under the control of the employer.

The so-called "premises rule" limits recovery to injuries which occur on the employer's premises by confining the term "in the course of employment" to the physical limits of the employer's premises. See Cressey v. Campus Chefs, Div. of CVI Serv., Inc., 204 N.J. Super. 337, 342-43, 498 A.2d 1274 (App.Div.1985). However, In Kristiansen v. Morgan, 153 N.J. 298, 316, 708 A.2d 1173 (1998), modified for other reasons, 158 N.J. 681, 730 A.2d 1289 (1999), the Court reasoned that the Legislature used the phrase "excluding areas not under the control of the employer" in its definition of employment because it intended to include within the definition areas controlled by the employer but not necessarily within the physical limits of the employer's premises.

Although the Act does not define "control," the Court has stated that control exists when the employer owns, maintains, or has exclusive use of the property. See Kristiansen v. Morgan, 153 N.J. 298, 316, 708 A.2d 1173 (1998) (fatal injuries were compensable when suffered by a bridge employee who was struck by a car while crossing a four-lane roadway on his way home as the employer owned, maintained, and had exclusive use the bridge where decedent was fatally injured); and Ramos v. M&F Fashion, 154 N.J. 583 (1998) (employer found to have control of a building's freight elevator under the "premises rule," despite its use by other building tenants, because the employer used and operated the elevator to conduct its business).

A long line of parking lot cases have held that employment commences when an employee arrives at a parking lot owned, maintained or used by the employer. See Livingstone v. Abraham & Straus, Inc., 111 N.J. 89 (1988) (designation of an under-utilized portion of a shopping center parking lot for employee parking renders that area the equivalent of an employer-owned lot); Hersh v. County of Morris, Docket No. A-1442-10T4, 2012 N.J. Super. Unpub. LEXIS 1774 (App. Div., decided July 24, 2012) (an employee struck by a car on a public street while walking to her workplace from an employer-controlled parking garage is eligible for workers' compensation benefits); and Ehrlich v. Strawbridge & Clothier, 260 N.J. Super. 89 (App. Div. 1992) (injury that occurs on a sidewalk necessary to be traversed to reach employer-designated parking lot is compensable).

Accidents occurring during off-premises lunch breaks do not arise out of and in the course of employment. See Ward v. Davidowitz, 191 N.J. Super. 518 (App. Div. 1983).

STATUTORY DEFENSES

N.J.S.A. 34:15-7 provides, in relevant part, that an injury is compensable except when the injury or death is intentionally self-inflicted, or when intoxication or the unlawful use of controlled dangerous substances . . . or willful failure to make use of a reasonable and proper personal protective device or devices furnished by the employer . . . clearly made a requirement of the employee's employment by the employer and uniformly enforced and . . . despite repeated . . . warnings, the employee has willfully failed to properly and effectively utilize . . . or when recreational or social activities are . . . the natural and proximate cause of the injury or death.

Suicide

The Act precludes an award of compensation when the injury or death is intentionally self-inflicted. However, in Kahle v. Plochman, Inc., 85 N.J. 539 (1981), the Supreme Court established a "chain-of-causation test" to be applied to determine if an employee's death or injury by suicide is compensable:

[A]n employee's death by suicide is compensable where the original work-connected injuries result in the employee's becoming dominated by a disturbance of mind directly caused by his or her injury and its consequences, such as extreme pain and despair, of such severity as to override normal rational judgment. A suicide committed by an employee suffering from such disturbance of mind is not to be considered "intentional" within the meaning and intent of N.J.S.A. 34:15-7, even though the act itself may be volitional.

The employee bears the burden of establishing by a preponderance of the evidence that there was an unbroken chain of causation between the compensable injury and her ultimate suicide. See Kahle, supra.

Intoxication

An employee can establish the statutory defense of intoxication only if it can prove by a preponderance of the evidence that employee's intoxication was the sole cause of the accident. See Tlumac v. High Bridge Stone, 187 N.J. 567 (2006). See also White v. Atl. City Press, 64 N.J. 128, 137 n.1, 313 A.2d 197 (1973) (noting employer must establish by greater weight of evidence that intoxication was sole cause of death), certif. denied, 30 N.J. 557, 154 A.2d 449 (1959)); and Warner v. Vanco Mfg. Inc., 299 N.J. Super. 349, 354, 690 A.2d 1126 (App. Div.) (noting that employer must establish employee's injury caused solely by employee's intoxication to defeat compensation award), certif. denied, 151 N.J. 72, 697 A.2d 544 (1997).

Recreational or Social Activity

The Act removes from the scope of compensability injuries or death resulting from recreational activities "unless such activities are a regular incident of employment and produce a benefit to the employer beyond improvement in employee health and morale." See Sarzillo v. Turner Constr. Co., 101 N.J. 114 (1985).

However, where an employer compels an employee to participate in an activity that ordinarily would be considered recreational or social in nature, the employer thereby renders that activity a work-related task as a matter of law. See Lozano v. Frank De Luca Construction, 178 N.J. 513 (2004). See also Sarzillo, supra (declining to award benefits to employee in part because employer had not compelled participation in injury-inducing recreational activity); Dowson v. Borough of Lodi, 200 N.J. Super. 116 (App.Div.1985) (affirming judge of compensation's denial of benefits based in part on absence of evidence that employer compelled employee to participate in softball game); and Cotton v. Worthington Corp., 192 N.J. Super. 467 (App. Div.), cert. denied, 96 N.J. 301 (1984) (declining to categorize softball games as regular incident of employment when "employer's contribution to, participation in, and encouragement of the activity did not rise to a level suggesting any compulsion on employees").

Horseplay & Skylarking

N.J.S.A. 34:15-7.1 provides that

An accident to an employee causing his injury or death, suffered while engaged in his employment but resulting from horseplay or skylarking on the part of a fellow employee, not instigated or taken part in by the employee who suffers the accident, shall be construed to have arisen out of and in the course of the employment of such employee and shall be compensable under the Act.

If the injured employee participated in the horseplay or skylarking, the injury may be compensable if additional circumstances exist which make the injury particularly work-related. See Diaz v. Newark Industrial Spraying, Inc., 135 N.J. 588 (1961) (injuries sustained by an employee injured when doused with a bucket of lacquer thinner which caught fire were compensable as the employer utilized lacquer thinner in its work); McKenzie v. Brixite Mfg. Co., 34 N.J. 1 (1961) (benefits awarded employee who was injured by a hot poker being used at work by a co-employee who reacted angrily to the employee's provoking prank); and Maltais v. Equitable Life Assur. Soc., 93 N.H. 237, 40 A.2d 837 (Sup. Ct. 1944) (decedent who was fatally injured when a co-employee inadvertently applied an air hose to decedent's rectum in response to decedent's prank was not precluded from obtaining workers' compensation benefits because the air hose was an incident of his employment).

ACCIDENT & OCCUPATIONAL DISEASE

The New Jersey Workers' Compensation Act provides a remedy to an employee who suffers injury arising out of and in the course of employment either by accident, N.J.S.A. 34:15-7, or by contracting a compensable occupational disease, N.J.S.A. 34:15-34. The schedule of benefits is the same under both statutes, N.J.S.A. 34:15-32, although different notice and claim provisions are applicable.

Accident

Definition

N.J.S.A. 34:15-7 provides, in relevant part, for the payment of:

compensation for personal injuries to, or for death of, such employee by accident arising out of and in the course of employment shall be made by the employer.

N.J.S.A. 34:15-7 does not define "by accident," however, it has been held that an accident is an unintended or unexpected occurrence which produces hurt or loss. See Brunell v. Wildwood Crest Police Dept., 176 N.J. 225 (2003).

Cardiovascular or Cerebral Vascular Claims

N.J.S.A. 34:15-7.2 provides that:

In any claim for compensation for injury or death from cardiovascular or cerebral vascular causes, the claimant shall prove by a preponderance of the credible evidence that the injury or death was produced by the work effort or strain involving a substantial condition, event or happening in excess of the wear and tear of the claimant's daily living and in reasonable medical probability caused in a material degree the cardiovascular or cerebral vascular injury or death resulting therefrom.

The Court in Hellwig v. J.G. Rast & Co., 110 N.J. 37 (1988) clarified the statute as follows:

The statute mandates that the "work effort or strain [must be] in excess of the wear and tear of the claimant's daily living." This language would appear to require proof that the strain of the work effort that allegedly precipitated the worker's disability or death from coronary disease was qualitatively more intense than the strain of the physical activity to which the worker was accustomed in his leisure time. The specific requirement that the work effort or strain involve a "substantial condition, event or happening" does not mean that a worker's ordinary work effort is insufficient to establish causation. Rather, the statutory language is designed to focus attention on the intensity and duration of the precipitating work effort or strain in evaluating its capacity to cause cardiac dysfunction.

Occupational Disease

Definition

N.J.S.A. 34:15-31 provides in relevant part:

[T]he phrase "compensable occupational disease" shall included all diseases arising out of an in the course of employment, which are due in a material degree to causes and conditions which are or were characteristic or peculiar to a particular trade, occupation, process or place of employment. Deterioration of a tissue, organ or part of the body in which the function of such tissue, organ or part of body is diminished due to the natural aging process thereof is not compensable.

The term "material degree" is defined in N.J.S.A. 34:15-7.2 as "an appreciable degree or a degree substantially greater than de minimis."

Per Lindquist v. City of Jersey City Fire Department, 175 N.J. 244 (2003), to establish causation in an occupational disease claim it is sufficient to prove that the risk or danger in the work place was a contributing cause – i.e., the work-related activity probably caused or contributed to the employee's disability as a matter of medical fact. There is no requirement of direct causation. Rather activation, acceleration or exacerbation of the employee's disability symptoms is sufficient. See Giambattista v. Thomas A. Edison, Inc., 32 N.J. Super. 103 (App. Div. 1954) (basic fungoid condition of hands, nonoccupational in origin, aggravated by immersion in benzene, held compensable as an occupational disease); Reynolds v. General Motors Corp., 40 N.J. Super. 484 (App. Div. 1956) (lighting-up of latent tubercular condition by irritation caused by inhalation of dust from grinding operation); and Bober v. Independent Plating Corp., 28 N.J. 160 (1958)

(chrome dust activating latent predisposition to allergic bronchial asthma).

Manifestation of Occupational Disease

Falcon v. American Cyanamid, 221 N.J. Super. 252 (App. Div. 1987), cert. denied, 108 N.J. 185 (1987) defines manifestation as either diagnosis by medical examination, manifest loss of physical function, or incapacity to work.

Apportioning Disability Among Respondents

Bond v. Rose Ribbon, 42 N.J. 308 (1964) holds liable that employer or carrier during whose employment or coverage the occupational disease was disclosed by medical examination, work incapacity, or manifest loss of physical function. As the Bond Court reasoned:

Where . . . an employee is exposed to work conditions which activate or cause a progressive occupational disease, and the existence of such disease remains undisclosed and unknown over a period of time . . . and where the employment under such work conditions was under the aegis of successive employers or insurance carriers . . . the most workable rule . . . is to hold liable that employer or carrier during whose employment or coverage the disease was disclosed . . . by medical examination, work incapacity, or manifest loss of physical function.

Notwithstanding Bond, the necessary prerequisite of imposition of liability on the last employer or workers' compensation insurance carrier in a succession of such employers or carriers is that there be actual causation or actual contribution to the petitioner's condition by the work exposure during such employment or period of coverage. Vastino v. Man-Roland, Inc., 299 N.J. Super. 628 (1997)

Occupational Cardiac Claims

Per Fiore v. Consolidated Freightways, 140 N.J. 452 (1995), a petitioner claiming occupational heart disease must demonstrate:

(1) that the disease is due in "a material degree" to causes "arising out of the workplace and that are or were characteristic of or peculiar to a particular trade, occupation, process or place of employment.

(2) that the work exposure exceeds the exposure caused by the petitioner's personal-risk factors – e.g., smoking.

(3) that the employment exposure substantially contributed to the development of the disease.

An occupational exposure substantially contributes to the development of coronary-artery disease when the exposure is so significant that, without the exposure, the disease would not have developed to the extent that it caused the disability resulting in the claimant's incapacity to work. See Fiore, supra.

Psychiatric Claims – Accidental or Occupational

Per Goyden v. State of New Jersey, 256 N.J. Super. 438 (App. Div. 1981), for an employee's mental disability to be compensable:

(1) The working conditions must be stressful, viewed objectively;

(2) The believable evidence must support a finding that the worker reacted to them as stressful;

(3) The objectively stressful working conditions must be peculiar to the particular work place;

(4) There must be objective evidence supporting a medical opinion of the resulting psychiatric disability in addition to the bare statement of the patient;

(5) The work exposure must have a material impact on the workers' condition.

See Williams v. Western Electric Co., 178 N.J. Super. 571 (App. Div. 1981)(aggravation of a pre-existing schizophrenia is not compensable if the aggravation is caused by the schizophrenic's subjective interpretation of the normal stress and strain of employment. See also Walck v. Johns-Manville, 56 N.J. 533, (1970).

Merited criticism cannot fairly be considered to be a "cause . . . and condition . . . characteristic of or peculiar to a particular trade, occupation, process or place of employment." as it is common to all occupations and places of employment. See Goyden supra. See also Cairns v. City of East Orange, 267 N.J. Super. 395 (App. Div. 1993) (psychiatric condition precipitated by a lay-off notice is not compensable because a lay-off is not peculiar to the employment but rather is common to all employment); and Klein v. New York Times Co., 317 N.J. Super. 41 (App. Div. 1998) (injury resulting from emotional reaction to legitimate personnel decisions that alter an employee's work status are not compensable).

A compensable psychiatric disability need not be evidenced by symptoms of physical disability. See Saunderline v. E.I. duPont deNemours & Co., 102 N.J. 402 (1986). See also, Margaritondo v. Stauffer Chemical, 217 N.J. Super. 565 (App. Div. 1986).

Post Traumatic Stress Disorder (PTSD) may qualify as either an "accidental injury" or an "occupational disease." Per Brunell v. Wildwood Crest Police Dept., 176 N.J. 225 (2003), where the employee suffers a traumatic event with delayed onset PTSD, the statute of limitations will not begin to run until such time as the employee knows or should know that he has sustained a compensable injury.

MEDICAL BENEFITS

Medical Treatment

N.J.S.A. 34:15-15 provides, in relevant part, that:

The employer shall furnish to the injured worker such medical, surgical and other treatment, and hospital service as shall be necessary to cure and relieve the worker of the effects of the injury and to restore the functions of the injured member or organ where such restoration is possible . . . provided, however, that the employer shall not be liable for any amount expended by the employee or by any third person on the employee's behalf for any such physicians' treatment and hospital services, unless such employee or any person on the employee's behalf shall have requested the employer to furnish the same and the employer shall have refused or neglected so to do[.]

The employer has the right to control treatment under the Act. See Benson v. Coca Cola Co., 120 N.J. Super 60 (App. Div. 1972). As the Benson Court held:

[U]nder the rule we here enunciate, the choice of physician is not free to the workman until after the employer's refusal or neglect to provide the treatment required by statute. In such a circumstance the free choice of physician which eventuates to the workman is imposed neither by statute nor by our law, but rather is offered by the employer itself in its refusal or neglect to comply with its obligation.

Accordingly, the employee must make an appropriate request of the employer for treatment in the first instance. See Benson, supra. See also Bobertz v. Hillside, 126 N.J.L. 416, 417 (E. & A. 1941); D'Amico v. General Elec. Supply Co., 16 N.J. Super. 472 (Cty. Ct. 1951), aff'd 22 N.J. Super. 199 (App. Div. 1952), aff'd o.b. 12 N.J. 607 (1953). However, there are circumstances when prior notification of the employer is not possible, as in the case of medical emergency that necessitates immediate medical treatment. See University of Massachusetts Memorial Medical Center, Inc. v. Christodoulou, 180 N.J. 334 (2004). The employer is responsible for providing both curative and palliative care – i.e., treatment which provides a patient with relief from the symptoms, pain, and stress of an illness or condition. See Howard v. Harwood's Restaurant Co., 25 N.J. 72 (1975) (the requirement to furnish medical treatment includes not only treatment that "cures" the injured worker, but also treatment that provides "relief"); and Hanrahan v. Township of Sparta, 284 N.J. Super. 327 (App. Div. 1995), cert. denied 143 N.J. 326 (1996) (directing the provision of physical therapy designed to relieve symptomatology and restore function to the injured worker's back despite the fact that treatment would not be curative of the underlying injury).

       The phrase "other treatment" contained in N.J.S.A. 34:15-15 has been interpreted liberally by the Court to include certain assistive technologies and services not typically associated with medical treatment. See Squeo v. Comfort Control Corp., 99 N.J. 588 (1985) (construction of a self-contained wheelchair-accessible apartment attached to the home of the parents of an employee rendered quadriplegic by work-related fall was found to constitute treatment under the Act).

Medical Provider Applications

N.J.S.A. 34:15-15 gives a medical provider an independent basis to pursue payment in the Division of Workers' Compensation from the employer for treatment of an employee's work-related injury. See University of Massachusetts Memorial Medical Center, Inc. v. Christodoulou, 180 N.J. 334 (2004).

INDEMNITY BENEFITS

Computation Of Average Weekly Wage

N.J.S.A. 34:15-37 governs the calculation of an employee's average weekly wage. It provides, in relevant part, that the average weekly wage "shall be construed to mean the money rate at which the service rendered in recompense under the contract of hiring in force at the time of the accident." It also allows for the use of a "twenty-six week wage statement" in determining the average weekly wage for certain employees:

Where prior to the accident, the rate of wages is fixed by the output of the employee, the daily wages shall be calculated by dividing the number of days the worker was actually employed into the total amount the employee earned during the preceding 6 months[.] N.J.S.A. 34:15-37

The Act provides for the inclusion of "tips" or gratuities in the calculation of an employee's average weekly wage. As set forth in N.J.S.A. 34:15-37:

Gratuities, received regularly in the course of employment from other than the employer, shall be included in determining the weekly wage only in those cases where the employer or employee has kept a regular daily or weekly record of the amount of gratuities so received. In such cases the average weekly amount of gratuities over a period of 6 months, or for the entire time of employment, whichever period is less, shall be added to the fixed weekly wage to determine the employee’s total weekly wage.

Temporary Total Disability Benefits

Calculation of Temporary Total Disability Rate

N.J.S.A. 34:15-12(a) provides the following schedule of compensation for temporary total disability benefits:

For injury producing temporary disability, 70% of the worker's weekly wages received at the time of the injury, subject to a maximum . . . and a minimum [rate in effect at the time of the accident.] This compensation shall be paid during the period of such disability, not however, beyond 400 weeks.

The wages of a part-time worker may not be reconstructed to reflect a forty (40) hour week for the purposes of temporary disability. As N.J.S.A. 34:15-37 provides

[I]f the employee worked less than the customary number of working days constituting an ordinary week in the character of the work involved, the weekly wage for the purposes of compensation under provisions of R.S.34:15-12a only shall be found by multiplying the hourly rate by the number of hours work regularly performed by that employee[.]

As such, temporary disability for a part-time employee is based upon the actual part-time wages subject to the maximum and minimum rates in effect at the time of the accident. See Russell v. Saddle Brook Restaurant Corp., 199 N.J. Super. 186 (App. Div. 1985).

Definition and Discussion

Temporary disability benefits represent a "partial substitute for loss of current wages." Electronic Associates, Inc. v. Heisinger, 111 N.J. Super. 15 (App. Div. 1970), cert. denied 57 N.J. 139 (1970). As such, a person who has not lost wages or time from work may not receive temporary disability benefits. See Calabria v. Liberty Mutual Insurance Co., 4 N.J. 64 (S.C. 1950).

There is a waiting period of seven days before an employee becomes entitled to temporary disability benefits. However, as N.J.S.A. 34:15-14 provides, "should the total period of disability extend beyond seven days," compensation shall at once become payable retroactively "covering the above prescribed waiting period." As a general rule, temporary disability continues "until the employee is able to resume work and continue permanently" thereafter, or until he "is as far restored as the permanent character of the injuries will permit," whichever happens first. Monaco v. Albert Maund, Inc., 17 N.J. Super. 425 (App. Div. 1952) (quoting Cf. Mt. Olive Coal Co. v. Industrial Commission, 129 N.E. 103 (Ill. 1920)). See also Tamecki v. Johns-Manville, 125 N.J. Super. 355 (App. Div. 1973).

       Where an injured employee is under active medical treatment and is able to perform light-duty work, the employer must either supply that work or continue paying temporary disability benefits. See Harbatuk v. S&S Furniture Systems Insulation, 211 N.J. Super. 614 (App. Div. 1986); and Williams v. Topps Appliance City, 239 N.J. Super. 528 (App. Div. 1989). The burden is on the employer to evidence that light-duty was offered the employee, but it was refused. See Harbatuk and Williams, supra.

       An employee who removes himself from the labor market is not entitled to temporary disability. See Tamecki v. Johns Manville Products Corp., 125 N.J. Super. 355 (App. Div. 1973) (injured worker's return to full time academic studies is tantamount to ability to work and terminates his entitlement to temporary disability). See also Electronic Associates v. Heisinger, 111 N.J. Super. 15 ( App. Div. 1970) (an employee who voluntary terminates his employment and while out of the labor market becomes temporary disabled due to a prior work-related injury is not entitled to temporary disability benefits).

       A seasonal employee is entitled to temporary benefits during the off-season if he can prove that he is unable to resume whatever type of work he would have had during that time. See Outland v. Monmouth-Ocean Education Service Commission, 154 N.J. 531 (1998)(a schoolteacher injured during the school year was entitled to temporary disability during her summer recess as she was able to demonstrate a loss of wages during that period of time).

The Act provides for a significant penalty for the delay or refusal of payment of temporary disability benefits. As set forth in N.J.S.A. 34:15-28.1

If a self-insured . . . or employer’s insurance carrier, having actual knowledge of the occurrence of the injury, or having received notice thereof such that temporary disability compensation is due pursuant to R.S. 35:15-17, unreasonably or negligently delays or refuses to pay temporary disability compensation, or unreasonably or negligently delays denial of a claim, it shall be liable to the petitioner for an additional amount of 25% of the amounts then due plus any reasonable legal fees incurred by the petitioner as a result of and in relation to such delays or refusals. A delay of 30 days or more shall give rise to a rebuttable presumption of unreasonable and negligent conduct on the part of a self-insured or uninsured employer or an employer’s insurance carrier.

Notwithstanding the foregoing, there is no common law cause of action available to an employee for his employer's intentional conduct in failing to provide benefits. See Dunlevy v. Kemper Insurance Group, 220 N.J. Super. 464 (App. Div. 1987), cert. denied, 110 N.J. 176 (1988). See also Stancil v. ACE USA, 211 N.J. 276 (2012) (an employee who suffered a work-related injury does not have a common-law cause of action for damages against a workers' compensation carrier for its willful failure to comply with court orders compelling it to provide medical treatment when the delay or denial of treatment caused a worsening of the employee's medical condition and/or pain and suffering).

Permanent Partial Disability Benefits

Calculation of Permanent Partial Disability Rate

N.J.S.A. 34:15-12(c) provides the following schedule of compensation for permanent partial disability benefits:

For disability partial in character and permanent in quality, weekly compensation shall be paid based upon 70% of the weekly wages received at the time of the injury, subject to a maximum compensation per week of 75% of the Statewide average weekly wages (SAWW) earned by all employees covered by the “unemployment compensation law” (R.S. 43:21-1 et seq.)[.]

An employee's permanent partial disability benefits may never exceed 70% of his actual wages. See McMonegal v. E&B Management, 214 N.J. Super 481 (App. Div. 1986).

The wages of a part-time worker may be reconstructed to reflect a forty (40) hour week for the purposes of permanent partial disability if there is a demonstration that the injuries which disable the employee in his part-time employment also cause a "loss of earning capacity, i.e., a diminution of future earning power" with respect to contemporary or future full-time employment. Katsoris v. South Jersey Publishing Co., 131 N.J. 535 (1993). However, where a part-time worker has contemporaneous full-time employment which is not affected by the residuals of an injury sustained in part-time employment, his compensation benefits are based only on his actual part-time earnings. See Katsoris, supra. See also, Torres v. Trenton Times Newspaper, 64 N.J. 458 (1974); and Engelbretson v. American Stores, 49 N.J. Super. 19 (App. Div. 1957).

Definition and Discussion

N.J.S.A. 34:15-36 defines permanent partial disability as:

[A] permanent impairment caused by a compensable accident or compensable occupational disease, based upon demonstrable objective medical evidence, which restricts the function of the body or of its members or organs; included in the criteria which shall be considered shall be whether there has been a lessening to a material degree of an employee’s working ability. Injuries such as minor lacerations, minor contusions, minor sprains, and scars which do not constitute significant permanent disfigurement, and occupational disease of a minor nature such as mild dermatitis and mild bronchitis shall not constitute permanent disability within the meaning of this definition.

In Perez v. Pantasote, Inc., 95 N.J. 105 (1984), the Supreme Court held that entitlement to permanent partial disability requires that:

[T]he employee must first prove by demonstrable objective medical evidence a disability that restricts the function of his body or its members or organs. Second, he must establish either that he has suffered a lessening to a material degree of his working ability or that his disability otherwise is significant and not simply the result of a minor injury.

A second criterion is whether there has been a disability in the broader sense of impairment in carrying on the "ordinary pursuits of life." See Perez, supra.

A subjective complaint of pain or discomfort without accompanying "demonstrable objective medical evidence," does not satisfy a petitioner's burden of proving the existence of partial-permanent disability. See Colon v. Coordinated Transport, Inc., 141 N.J. 1 (1995) (range of motion tests are subjective evidence and do not, standing alone, satisfy the statutory requirement of demonstrable objective medical evidence). See also Porter v. Elizabeth Board of Education, 281 N.J. Super. 13, App. Div. 1995), cert. denied 142 N.J. 455 (1995) (an employee who underwent cervical disc surgery demonstrated objective medical evidence of disability); Perez v. Monmouth Cable Vision, 278 N.J. Super. 275 (App. Div. 1994), cert. denied, 140 N.J. 277 (1995) (a "hands-on" examination demonstrating loss of range of motion and strength is sufficient to satisfy requirement of demonstrable objective medical evidence); and Rakip v. Madison Ave. Food Town, 272 N.J. Super. 590 (App. Div. 1994) (modest findings of restriction of flexion, extension and bending, and complaints of continuing pain in his low back that interfered with his activities of daily living, were sufficient to sustain award of permanent partial disability).

       Where there is a conflict of medical testimony the court will give greater weight to that of the treating physician. See Pellegrino v. Monahan McCann Stone Co., 61 N.J. Super, 561 (App. Div. 1959); and Mewes v. Union Bldg. & Construction Co., 45 N.J. Super. 88 (App. Div. 1957), certif. denied 24 N.J. 546 (1957).

Computation of Permanent Partial Disability Awards

Permanent partial disability awards are scheduled losses payable in accordance with the provisions of N.J.S.A. 34:15-12.

As the Court is Poswiatowski v. Standard Chlorine Chemical Co., 96 N.J. 321 (1984), explained:

Workers' compensation benefits for permanent disability are calculated by translating the worker's loss into a stated number of weeks and paying the worker a sum of money per week over the period. Thus the loss of a hand is equated with 245 weeks, a leg 315 weeks, and a foot 230 weeks. N.J. Stat. 34:15-12(c). Partial losses are expressed in percentages; for example, the loss of the first phalange of a finger is considered the loss of one-half of the finger. N.J. Stat. 34:15-12(c)(12). The loss of an unscheduled bodily function for example, a back injury is equated with a percentage of total disability (now 600 weeks). N.J. Stat. 34:15-12(c)(22).

The appropriate dollar amount of compensation is determined by consulting the Schedule of Disabilities prepared by New Jersey Manufacturers Insurance Company for the calendar year in which the accident occurred or the occupational disease manifested itself. The Schedule of Disabilities is organized by percent of disability and weeks of disability. A copy of the 2014 Schedule of Disabilities, as well as schedules for prior calendar years, can be found on the Division of Workers' Compensation's website at http://lwd.dol.state.nj.us/labor/wc/legal/legal_index.html.

Stacking

In Poswiatowski v. Standard Chlorine Chemical Co., 96 N.J. 321 (1984), the Supreme Court held that the weeks of compensation awarded for an accident involving multiple injuries that establish a single compensable disability should be cumulated, not separated, in computing the award.

By way of example, an award for bilateral total knee replacements arising out of a single accident would be calculated by adding the number of weeks of disability attributable to each leg and placing the overall award in terms of the partial total – i.e., the whole person. Therefore, assuming an impairment of 50% of the left knee and 50% of the right knee – each the equivalent of 157.5 weeks of disability – we would arrive at a partial total award of 315 weeks of disability, or 52 1/2% of PT. At the 2013 rates, and assuming that the maximum permanency rate applies, 50% of the leg is the equivalent of $40,225.50. Without "stacking," an award for 50% of the left leg and 50% of the right leg would equate to $80,251 – i.e., $40,225.50 + $40,225.50. However, "stacking" of the left and right knee injuries results in an award of 52 1/2% of PT, or $190,890, at the 2013 rates. The "stacking" of the left and right knees gives rise to a considerably higher weekly disability rate than if these disabilities were allocated separately, resulting in a significantly greater monetary award.

However, it is not appropriate in all situations to simply add up the weeks attributable to each injury in arriving at an overall percentage of disability. Ventre v. CPC International, 285 N.J. Super. 567 (App. Div. 1995). Rather, the Court should evaluate the impact of the various disabilities on the employee before arriving at an assessment of his overall disability. Ventre, supra.

Abdullah Credits

N.J.S.A. 34:15-12(d) provides that:

If previous loss of function to the body, head, a member or an organ is established by competent evidence, and subsequently an injury or occupational disease arising out of and in the course of an employment occurs to that part of the body, head, member or organ, where there was a previous loss of function, then the employer or the employer's insurance carrier at the time of the subsequent injury or occupational disease shall not be liable for any such loss and credit shall be given the employer or the employer's insurance carrier for the previous loss of function.

In Abdullah v. S.B. Thomas, Inc., 190 N.J. Super. 26 (App. Div. 1983), the Court held that where an employee's overall disability is increased by a subsequent compensable accident, N.J.S.A. 34:15-12(d) provides that the employer at the time of the subsequent injury is liable for the employee's overall disability minus a credit for the prior functional loss. The Abdullah Court provided the following as an example of how such credits are to be calculated:

A worker who has a preexisting compensable disability of 37 1/2 percent of partial total who is rendered 50 percent disabled by a subsequent compensable accident and a worker with a preexisting non-compensable 37 1/2 percent disability also rendered 50 percent disabled and who also qualifies for the maximum weekly rate, are treated in the following manner. The overall aggravated disability of 50 percent equals 300 weeks (50 percent of 600 weeks). The schedule of N.J. Stat. Ann. § 34:15-12(c) provides that for disability, falling within the bracket of 271-300 weeks, the maximum weekly rate is 50 percent of statewide average weekly wages (SAWW). The extent of credit for the preexisting disability of 37 1/2 percent is determined by calculating 37 1/2 percent of 600 weeks or 225 weeks, which falls into the bracket of 211-240 weeks in the schedule and calls for a lesser maximum weekly payment of 40 percent of SAWW. This is the credit allowed to the employer, leaving the worker entitled to the remaining sum.

The employer bears the burden of proof in establishing the existence of a prior functional loss. Abdullah, supra.

Section 20 Settlements

N.J.S.A. 34:15-20 provides, in relevant part, that:

[Where there are] . . . issues . . . of jurisdiction, liability, causal relationship or dependency of the petitioner under this chapter, and the petitioner and the respondent are desirous of entering into a lump-sum settlement of the controversy, a judge of compensation may with the consent of the parties, after considering the testimony of the petitioner and other witnesses, together with any stipulation of the parties, and after such judge of compensation has determined that such settlement is fair and just under all the circumstances, enter “an order approving settlement.”

A payment pursuant to N.J.S.A. 34:15-20 has the force and effect of a dismissal and extinguishes the employee's rights to any future compensation and the employer's rights to any third party recovery. See Aetna Life & Casualty v. Engard, 218 N.J. Super. 239 (App. Div. 1986) (a carrier cannot recoup any part of a settlement which it previously paid under N.J.S.A. 34:15-20). But see Calle v. Hitachi Power Tools, 2011 N.J. Super. Unpub. LEXIS 341 (App. Div. 2011) (an employer that paid a lump sum settlement pursuant to a negotiated settlement agreement that purported to reserve its lien pursuant to N.J.S.A. 34:15-40 of the Workers' Compensation Act is entitled to reimbursement from the disbursements of a third-party tort recovery in favor of the employee).

Permanent Total Disability

Definition and Discussion

In Zabita v. Chatham Shop Rite, Inc., 208 N.J. Super. 215 (App. Div. 1986), the Appellate Division defined permanent total disability as follows:

Total and permanent disability exists where a worker is rendered unemployable in a reasonably stable job market after a work-related accident, notwithstanding that factors personal to the individual play a contributory part in such unemployability.

The ability for light, intermittent or sedentary work is not inconsistent with permanent total disability. See Zabitha, supra. See also Germain v. Cool-Rite Corp., 70 N.J. 1 (1976).

Factors other than physical and neuropsychiatric impairments may be considered in the determination of permanent total disability, where such physical and neuropsychiatric impairments constitute at least 75% or higher of total disability. See N.J.S.A. 34:15-36. This so-called "odd lot doctrine" may be applied when a claimant is at least 75% partially totally disabled and is unemployable in a reasonably stable job market due to a combination of the medical consequences of his work-related injury and his pre-existing personal handicaps. See Padilla v. Concord Plastics, Inc., 221 N.J. Super. 301 (App. Div. 1987) (vocational expert testified that employee was virtually unemployable after the amputation of the right forearm based upon petitioner's age, language barrier, lack of education, lack of employment skills, inability to adapt to his prosthesis and the severity of the injury and its psychiatric sequelae). See also Germain, supra; Lawicki v. N.J. Art Foundry, 88 N.J. 75 (1981); and Zanchi v. S.K. Construction Co., 63 N.J. 331 (1973).

Calculation of Permanent Total Disability Benefits

N.J.S.A. 34:15-12(b) provides, in relevant part, the following schedule of compensation for permanent total disability benefits:

For disability total in character and permanent in quality, 70% of the weekly wages received at the time of injury, subject to a maximum and a minimum compensation as stated in subsection a. of this section. This compensation shall be paid for a period of 450 weeks, at which time compensation payments shall cease unless the employee shall have submitted to such physical or educational rehabilitation as may have been ordered by the rehabilitation commission, and can show that because of such disability it is impossible for the employee to obtain wages or earnings equal to those earned at the time of the accident, in which case further weekly payments shall be made during the period of such disability[.]

Social Security Offset

The employer is entitled to offset Social Security disability benefits against permanent total disability benefits payable to an employee under the age of 62. See Ries v. Harry Kane, Inc., 195 N.J. Super. 185 (App. Div. 1984).

The Second Injury Fund

N.J.S.A. 34:15-95, provides, in relevant part, that:

The sums collected under R.S. 34:15-94 shall constitute a fund, to be known as the Second Injury Fund, out of which a sum shall be set aside each year by the Commissioner of Labor from which compensation payments in accordance with the provisions of paragraph (b) of R.S. 34:15-12 shall be made to persons totally disabled, as a result of experiencing a subsequent permanent injury under conditions entitling such persons to compensation therefor, when such persons had previously been permanently and partially disabled from some other cause[.],br>

The Act provides that Fund benefits are payable at the employee's permanent total disability rate for the year of the last compensable accident or injury. See N.J.S.A. 34:15-95 and N.J.S.A. 34:15-12(b).

The Supreme Court in Katz v. Township of Howell, 68 N.J. 125 (1975) has held that in order for Fund liability to attach: (a) the employee must be permanently and totally disabled; (b) the prior disability must have been partial and permanent in nature; and (c) the prior condition and the subsequent work-related accident must "in conjunction" result in permanent total disability. See also Paul v. Baltimore Upholstering Co., 66 N.J. 111 (1974).

There is no Fund liability "if the disability resulting from the . . . last compensable accident in itself and irrespective of any previous condition or disability constitutes total and permanent disability." N.J.S.A. 34:15-95(a). The Act also expressly excludes the Fund from liability where the pre-existing condition or disease is progressive, "and by reason of such progression," renders an employee permanently and totally disabled following the last compensable accident. N.J.S.A. 34:15-95(c) and (d).

The Fund is entitled to exercise third-party lien credits against any monies recovered by the employee arising out of the last compensable accident or exposure. See N.J.S.A. 34:15-40.

Dependency Benefits

N.J.S.A. 34:15-13(a) through (j) provides that:

[I]n case of death, compensation shall be computed, but not distributed . . . at 70% of wages . . . for one or more dependents[.] Distribution shall be made among dependents, if more than one, according to the order of the Division of Workers’ Compensation, which shall, when applied to for that purpose, determine, upon the facts being presented to it, the proportion to be paid to or on behalf of each dependent according to the relative-dependency. Payment on behalf of infants shall be made to the surviving parent, if any, or to the statutory or testamentary guardian.

The Act defines “dependents” as including husbands, wives, parents, stepparents, grandparents, natural children, legally adopted children, stepchildren, grandchildren, children in esse, posthumous children, illegitimate children, brothers, sisters, half brothers, half sisters, nieces and nephews, provided that they are dependent upon the deceased at the time of accident or the occurrence of occupational disease. N.J.S.A. 34:15-13(f).

There is a presumption of dependency as pertains to decedent’s spouse and to any natural child of a decedent under 18 years of age or, if enrolled as a full-time student, under 23 years of age, who was actually a part of the decedent’s household at the time of the decedent’s death. N.J.S.A. 34:15-13(f). See also Toms v. Dee Rose Furniture, 262 N.J. Super 446 (App. Div. 1993), cert. denied, 134 N.J. 474 (1993) (petitioner who had a twelve-year common-law relationship with decedent was not entitled to dependency benefits as New Jersey does not recognize common-law marriage). But see Dawson v. Hatfield Wire & Cable Co., 59 N.J. 190 (1971) (dependency benefits awarded woman who in good faith entered into a sixteen-year "marriage" with decedent whom she was unaware was previously married and not divorced); and Parkinson v. J&S Tool Co., 64 N.J. 159 (1974) (petitioner awarded benefits where she and decedent had married, divorced and then resumed cohabitation following reconciliation).

N.J.S.A. 34:15-13(j) provides that in the case of a surviving spouse, compensation is to be paid during the entire period of survivorship or until such surviving spouse shall remarry, and in the case of dependents under 18 years of age, until they reach 18 years of age, or 23 years of age while enrolled as a full-time student. All other dependents are entitled to 450 weeks of compensation. N.J.S.A. 34:15-13(j).

A payment to a decedent under N.J.S.A. 34:15-20 does not preclude a dependency claim by a dependent who has not participated in that settlement. See Kibble v. Weeks Dredging & Construction Co., 161 N.J. 178 (1999).

The cost of burial and of a funeral, not to exceed $3,500, shall be paid to the dependent or other person having paid said costs. N.J.S.A. 34:15-13(h).

LIENS AND CREDITS

Section 40 Liens

N.J.S.A. 34:15-40 provides, in relevant part, that:

Where a third person is liable to the employee or his dependents for an injury or death . . [i]n the event that the employee or his dependents shall recover and be paid from the said third person or his insurance carrier, any sum in release or in judgment on account of his or its liability to the injured employee or his dependents . . . the employer or his insurance carrier . . . shall be entitled to be reimbursed, as hereinafter provided, for the medical expenses incurred and compensation payments theretofore paid to the injured employee or his dependents less employee’s expenses of suit and attorney’s fee as hereinafter defined.

Section 40 of the Act addresses situations in which a third person is liable to the employee for an injury. While permitting an injured worker to both collect compensation benefits and pursue a third-party tortfeasor, Section 40 requires an employee to reimburse the employer from the proceeds of any third-party recovery. See Pool v. Morristown Mem'l Hosp., 400 N.J. Super. 572 (App. Div. 2008). This right of reimbursement attaches even if the employee's claim is ultimately found noncompensable. See Green v. AIG Casualty Co., 433 N.J. Super. 59 (App. Div. 2013).

The employer is entitled to a lien against any recovery the employee might recognize from his own uninsured motorist insurance. See Midland Insurance Co. v. Colatrella, 102 N.J. 612 (1986) (we remain persuaded that when a negligent motorist, including one who is uninsured or unidentified, injures a worker, a compensation lien should attach to the uninsured motorist proceeds recovered by the injured employee).

Medical Malpractic Liens

The employer is entitled to reimbursement from the proceeds of an action for medical malpractice arising out of the employee's treatment for a work-related injury to the extent that the employer has paid for the residuals of the malpractice. See Camp v. Lockheed Electronics, 178 N.J. Super. 535 (App. Div. 1981). See also Schmidt v. Revolvator Co., 46 N.J. Super. 558 (Law Div. 1957); and Brum v. International Terminal, 125 N.J. Super. 558 (App. Div. 1973).

Pip Liens

Although the insured is entitled to payment of PIP benefits in the context of a work-related motor vehicle accident, the PIP carrier does have a right of reimbursement from the workers' compensation carrier or employer for medical payments or any other benefits determined to be compensable. See Solimano v. Consolidated Mutual, 146 N.J. Super. 393 (Law Div. 1977). The Solimano Court also allows for the PIP carrier to initiate, in its own name, a claim in the Division of Workers' Compensation in order to determine the amount, if any, collectible from the workers' compensation carrier.

Abdullah Credits

N.J.S.A. 34:15-12(d) provides that:

If previous loss of function to the body, head, a member or an organ is established by competent evidence, and subsequently an injury or occupational disease arising out of and in the course of an employment occurs to that part of the body, head, member or organ, where there was a previous loss of function, then the employer or the employer's insurance carrier at the time of the subsequent injury or occupational disease shall not be liable for any such loss and credit shall be given the employer or the employer's insurance carrier for the previous loss of function.

In Abdullah v. S.B. Thomas, Inc., 190 N.J. Super. 26 (App. Div. 1983), the Court held that where an employee's overall disability is increased by a subsequent compensable accident, N.J.S.A. 34:15-12(d) provides that the employer at the time of the subsequent injury is liable for the employee's overall disability minus a credit for the prior functional loss. The Abdullah Court provided the following as an example of how such credits are to be calculated:

A worker who has a preexisting compensable disability of 37 1/2 percent of partial total who is rendered 50 percent disabled by a subsequent compensable accident and a worker with a preexisting non-compensable 37 1/2 percent disability also rendered 50 percent disabled and who also qualifies for the maximum weekly rate, are treated in the following manner. The overall aggravated disability of 50 percent equals 300 weeks (50 percent of 600 weeks). The schedule of N.J. Stat. Ann. § 34:15-12(c) provides that for disability, falling within the bracket of 271-300 weeks, the maximum weekly rate is 50 percent of statewide average weekly wages (SAWW). The extent of credit for the preexisting disability of 37 1/2 percent is determined by calculating 37 1/2 percent of 600 weeks or 225 weeks, which falls into the bracket of 211-240 weeks in the schedule and calls for a lesser maximum weekly payment of 40 percent of SAWW. This is the credit allowed to the employer, leaving the worker entitled to the remaining sum.

The employer bears the burden of proof in establishing the existence of a prior functional loss. Abdullah, supra.

COSTS AND FEES

Counsel Fees

N.J.S.A. 34:15-64 permits a reasonable attorney fee not exceeding 20% of the judgment.

The Judge of Compensation has complete discretion to set fees. See Wright v. Plaza Ford, 164 N.J. Super. 203 (App. Div. 1978) (court has jurisdiction to award a counsel fee of less than 20% of the award); Gromack v. Johns-Manville Products, 147 N.J. Super. 131 (App. Div. 1977) (a judge of compensation's assessment of counsel fees will not be changed by a reviewing court unless manifestly excessive or inadequate); and Maskell v. Mid-State Filigree, 322 N.J. Super. 68 (App. Div. 1999) (it is not an abuse of discretion for a judge of compensation to assess a fee only on petitioner's net recovery after deduction of Section 40 lien credits).

Medical Expert Costs

N.J.S.A. 34:15-64 provides, in relevant part, for the following medical expert costs:

A fee of not more than $400 paid to an evaluating physician for an opinion regarding the need for medical treatment or for an estimation of permanent disability, if the physician provides the opinion or estimation in a written report;

An additional fee of not more than $400 paid to the evaluating physician who makes a court appearance to give testimony;

A fee of not more than $450 paid to a treating physician for the preparation and submission of a report including the entire record of treatment, medical history, opinions regarding diagnosis, prognosis, causal relationships between the treated condition and the claim, the claimant’s ability to return to work with or without restrictions, what, if any, restrictions are appropriate, and the anticipated date of return to work, and any recommendations for further treatment;

An additional fee of not more than $300 per hour, with the total amount not to exceed $2,500, paid to the treating physician who gives testimony concerning causal relationship, ability to work or the need for treatment; and

An additional fee of not more than $300 per hour, with the total amount not to exceed $1,500, paid to the treating physician who gives a deposition concerning causal relationship, ability to work or the need for treatment.

An evaluating or treating physician may not charge a fee for a report, testimony or deposition in excess of the amounts set forth above. N.J.S.A. 34:15-64(b)(2).

Bona Fide Offers

Petitioner's counsel is not entitled to a fee on a voluntary tender of disability benefits which is determined to be "bona fide" – i.e., in good faith. N.J.S.A. 34:15-64(c) provides, in relevant part, that:

When . . . at a reasonable time, prior to any hearing compensation has been offered and the amount then due has been tendered in good faith or paid within 26 weeks from the date of the notification to the employer of an accident or an occupational disease or the employee’s final active medical treatment or within 26 weeks after the employee’s return to work whichever is later . . . the reasonable allowance for attorney fee shall be based upon only that part of the judgment or award in excess of the amount of compensation, theretofore offered, tendered in good faith or paid.

In Alvarado v. J&J Snack Foods Corp., 397, N.J. Super. 418 (App. Div. 2008), the Appellate Division held that an offer will be considered "bona fide" if:

[T]he employer . . . make[s] an unconditional and unqualified offer to pay compensation and . . . express[es] it in terms that leave no room for misunderstanding . . . at a reasonable time after notice of injury and extent of disability . . . prior to any hearing and prior to the expiration of the applicable twenty-six-week period.

Per the Alvarado Court, the phrase "prior to any hearing," means a scheduled court appearance at a point in time when the parties have assembled their medical proofs on the extent of petitioner's disability and are in a position to proceed to trial, whether or not they actually proceed.

Penalties

The Act provides for a significant penalty for the delay or refusal of payment of temporary disability benefits. As set forth in N.J.S.A. 34:15-28.1:

If a self-insured . . . or employer’s insurance carrier, having actual knowledge of the occurrence of the injury, or having received notice thereof such that temporary disability compensation is due pursuant to R.S. 35:15-17, unreasonably or negligently delays or refuses to pay temporary disability compensation, or unreasonably or negligently delays denial of a claim, it shall be liable to the petitioner for an additional amount of 25% of the amounts then due plus any reasonable legal fees incurred by the petitioner as a result of and in relation to such delays or refusals. A delay of 30 days or more shall give rise to a rebuttable presumption of unreasonable and negligent conduct on the part of a self-insured or uninsured employer or an employer’s insurance carrier.

Notwithstanding the foregoing, there is no common law cause of action available to an employee for his employer's intentional conduct in failing to provide benefits. See Dunlevy v. Kemper Insurance Group, 220 N.J. Super. 464 (App. Div. 1987), cert. denied, 110 N.J. 176 (1988). See also Stancil v. ACE USA, 211 N.J. 276 (2012) (an employee who suffered a work-related injury does not have a common-law cause of action for damages against a workers' compensation carrier for its willful failure to comply with court orders compelling it to provide medical treatment when the delay or denial of treatment caused a worsening of the employee's medical condition and/or pain and suffering).

Interest

N.J.S.A. 34:15-28 provides, in relevant part, that:

Whenever lawful compensation shall have been withheld from an injured employee or dependents for a term of 60 or more days following entry of a judgment or order, simple interest on each weekly payment for the period of delay of each payment may, at the discretion of the division, be added to the amount due at the time of settlement.

FRAUD

N.J.S.A. 34:15-57.4(c)(1) provides, in relevant part, that:

If a person purposely or knowingly makes, when making a claim for benefits pursuant to N.J.S.A 34:15-1 et seq., a false or misleading statement, representation or submission concerning any fact which is material to that claim for the purpose of obtaining benefits, the Division may order the immediate termination or denial of benefits with respect to that claim and a forfeiture of all rights of compensation or payments sought with respect to the claim.

The so-called "NJ Workers' Compensation Fraud Act" empowers the Judge of Compensation to address instances of fraudulent conduct on the part of Petitioner. See Dubrel v. Maple Crest Auto Group, Docket No. A-3321-10T3, 2012 N.J. Super. Unpub. LEXIS 188 (App. Div., decided January 30, 2012) (court dismissed employee's claim with prejudice, ordered termination of benefits and forfeiture of rights to any future compensation where employee made purposely and knowingly false statements in order to enhance his prospective award of benefits); Johnnie Jackson v. Township of Montclair, Docket No. A-2212-11T2, 2012 N.J. Super. Unpub. LEXIS 1598 (App. Div., decided July 5, 2012) (failure to disclose prior relevant medical history resulted in a dismissal with prejudice of employee's claim and reimbursement to carrier for previously paid temporary disability benefits).