Workers' Compensation in the age of COVID-19

How workers' compensation works for employers in a pandemic

It goes without saying that the COVID-19 pandemic has turned working life in America upside down. New Jersey employers have made big adjustments, and may be wondering how the pandemic affects workers' compensation laws.

Businesses that formerly thrived on person-to-person interaction migrated to the virtual realm. Highly trained employees in major industries found themselves furloughed or out of a job altogether, while formerly entry-level positions became categorized as both essential and "frontline" hazardous. The public health emergency reversed the migration of talent from the suburbs to the cities; interrupted the careers of parents with school-age children; left businesses in travel/ hospitality, dining, entertainment and recreation unable to capitalize on an epic increase in available leisure time — and, from coast to coast, forced potentially permanent adjustments to the ways we work, socialize and think about protections like workers' compensation.

When properly applied, workers' comp functions to the benefit of both employer and employee; working to address both medical and legal issues by establishing a plan of regular compensatory payments to an individual who is injured or otherwise incapacitated during the period of their employment — while minimizing courtroom-related costs for the public/private entity that carries the individual on its payroll.

Beyond the basics, the laws governing workers' compensation coverage can differ significantly from state to state — and, as Trusted Choice independent insurance agent Hal Soden, Jr. observes, “The pandemic has highlighted these differences…and New Jersey has been much more proactive in addressing the many questions surrounding workers' comp in the COVID era.”

The New Jersey Statehouse gets to work

"NJ already had in place some of most comprehensive family leave and disability insurance regulations in the US," says Soden, a risk management expert with the Jamesburg, NJ-based Oliver L.E. Soden Agency. “But being one of hardest-hit states during pandemic has inspired state government to enact protections that go above and beyond.”

March 2020

On the federal level, the onset of the COVID-19 crisis saw the United States Congress pass the Families First Coronavirus Response Act, a package of emergency aid designed to expand unemployment benefits, paid sick leave, and food assistance to millions of Americans, in addition to furnishing stimulus payments to individuals and tax credits to businesses. While the March 2020 legislation elicited criticism for the modest size of the benefits and stimulus checks — as well as for inequities in the disbursement of business funds — the New Jersey State Legislature got to work in an attempt to address some questions that began to arise, regarding the pandemic's longer-term impacts on the workforce.

July 2020

Under the existing Family Medical Leave Act, employees who tested positive for the virus were covered for the mandated two weeks of quarantine and monitoring during the initial period of lockdown in New Jersey. However, even as the state began to relax restrictions on dining and other public activities during the warmer months — and as the new cases, hospitalizations and deaths continued to rage throughout the greater New York metro area — it soon became evident that additional worker protections, beyond things already covered by workers' compensation, were called for. These protections were enacted via two pieces of legislation that landed on NJ Governor Phil Murphy's desk in the summer of 2020.

Signed into law on July 1, the first of these was Senate Bill A3945, an act designed specifically for law enforcement officers and other first responders enrolled in one of three pension systems: Public Employees Retirement System (PERS), Police and Firefighters Retirement System (PFRS), and State Police Retirement System (SPRS). The bill allowed for an accidental disability pension for an eligible person who becomes disabled due to exposure to other COVID-infected individuals, and a death benefit to the person's beneficiaries should that individual die from the virus.

September 2020

The legislation with the greatest broad-based impact on the Garden State's workforce was signed on September 14, when Senate Bill S2380 established the presumption that any "essential worker" who contracts COVID-19 during the period of their employment has done so during the course of performing their job — with the burden of proof shifted to the employer to prove otherwise.

Re-drawing the front lines…and re-defining the Essential Worker

Among the primary distinguishing features of Bill S2380 is the expansion of "essential worker" classification well beyond the categories of "frontline" healthcare workers and what are traditionally called first responders — taking in anyone who performs a function according to a federally declared or state-declared emergency response/ recovery operation, whether paid or volunteer — as well as anyone in either the public or private sector whose job "is essential to the public's health, safety and welfare." This does not directly affect workers' compensation laws, but may have some effect on the application of workers' comp coverage.

Applying retroactively to March 9, 2020 — the date that a public health emergency was first declared in New Jersey — Bill S2380 identified four categories of essential worker:

Further clarification of "essential worker" status was provided in a pair of executive orders signed in subsequent weeks by the governor. Executive Order 103 included employees of grocery stores, pharmacies, and gas stations, as well as school employees who provide food services and other support functions. Executive Order 107 further defined the list to include hardware/ home stores, medical supply stores, banks, pet supply stores, postal and delivery services, childcare, construction and utility crews. While "essential" status does not extend to employees who are allowed the opportunity to perform their jobs from home, these bills and orders state that any individual who contracts COVID-19 in the course of working in any of these settings is granted the "rebuttable" presumption that the virus was contracted on the job. 

Problems for employers and employees…and questions all around

For the employer, the process of trying to argue against COVID-related workers' comp claims can be especially difficult, as it can necessitate a detailed tracing of all potential contacts (customers, patients, clients, vendors, etc.) experienced by that individual over the course of several weeks on the job. Add to that the fact that a detailed rebuttal could potentially conflict with the confidentiality of an employee's medical records.

As Soden observes, “One way to rebut claims is to demonstrate that employer has enforced proper masking/ social distancing/ sanitation guidelines in the workplace…proof of proper procedure also helps shield employer from civil liability.”

As COVID-19 has appeared to affect different individuals in many different ways, numerous questions exist about its means of transmission, risks of re-infection, and long-term effects — including damages to pulmonary/ respiratory systems and cognitive functions that are only just beginning to be recognized and understood. Consequently, the ability for employees to claim long-term impairment — and to file for workers' compensation coverage claims at an indeterminate future date from initially contracting the virus — remains a gray area.

While the federal government enacts a vaccine rollout program, another question speaks to whether an adverse reaction to a vaccine is grounds for a workers' comp claim. Many attorneys consider the 1979 revision to the New Jersey Workers Compensation Act to have taken such claims off the table, as an activity which is not "a regular incident of employment" — but another line of reasoning holds that if vaccinations are mandated by an employer, and an employee suffers an adverse reaction, then the compulsory nature of the action (receiving the vaccine) constitutes a justification for a compensation claim.   

At present, the sole statutory provision addressing injuries resulting from vaccination in the New Jersey Workers Compensation Act applies exclusively to first responders and other public safety personnel. Other claimants can get assistance from a federal program known as the National Vaccine Injury Compensation Program — and, as vaccines are considered "countermeasures" against a public health emergency, COVID-19 claims are also covered under the federal Countermeasures Injury Compensation Program.

Workers' Compensation: one program among many to help New Jersey workers

When an employee tests positive for COVID, or cannot go to work due to school/daycare closing, or is advised by a physician to stay home, or is caring for a sick family member, then that individual can seek assistance through state and federal means. The same applies in the event of an employee being unable to work due to the employer's compliance with a mandated lockdown — or even in those cases where the employer remains open in defiance of such an order, and the employee fears being placed at heightened risk of exposure to the virus. In each instance, the individual has access to Federal Emergency Paid Sick Leave (up to 80 hours), Earned Sick Leave (up to 40 hours), Unemployment Insurance (up to 39 weeks), Temporary Disability Insurance (through the State of NJ) — or, when applicable, Workers' Compensation Insurance.

The Trusted Choice for your questions on Workers' Comp

Even during an interlude in which many New Jersey workers' compensation courts have been temporarily closed to the public, employees in designated "essential" lines of work have used New Jersey's recently enacted laws to their advantage. While some insurance industry observers have expressed the opinion that the new state laws will cause workers' comp claims to increase exponentially, resulting in skyrocketing premiums, many questions remain to be monitored and addressed by professionals from the medical, legal and insurance fields.

While a pandemic can rightly be said to have "spread like wildfire," the broadly global scope and protracted duration of such a threat sets it apart from strictly localized catastrophic events as earthquakes, floods and tornadoes. In the ever-evolving saga of COVID-19, infectious disease experts are still very much in the process of learning about its means of transmission, its most effective treatment procedures, and proper preventive measures — to say nothing of re-infection rates and long-range effects on the human body.

The intersection of this recently established peril with the existing framework of workers' compensation laws is likewise an evolving thing — and your Trusted Choice independent insurance agent can help you stay up-to-date on how to best navigate the rapidly shifting currents of this ongoing crisis.

One significant way for an employer to deal with the Age of COVID is to identify potentially unhealthy or unsafe procedures and practices in the workplace — as well as to take note of which employees run the risk of greater exposure to infection — and to prepare a proactive plan for the clean, safe, properly distanced operation of your business. Share your plan and guidelines with all members of your staff, and take the time to train all employees in the steps that they can take to personally minimize their exposure.

In the event that an employee does contract COVID, be sure to have documentation of that individual's recent work hours and interactions within the course of performing their job. Include documentation of any steps taken to keep the workplace safe and sanitized; issue prompt and proper notification to all other employees, and submit the documented information to the Worker's Compensation claims administrator.

Most important of all, consult your Trusted Choice independent insurance agent to discuss your specific insurance needs as they relate to the COVID-19 pandemic — and to design a plan that can maximize employee safety, minimize your liability under the new laws, and ensure the survival of your business during this most challenging time.this is where you put copy.