Additional Question To Ask Before Paying Temporary Disability Benefits In New Jersey Even If Petitioner Is Disabled From The Work Injury

New Jersey -- Workers' Compensation

In many states, to determine if an injured worker is entitled to temporary disability benefits, the only question that needs to be asked is: "Is the petitioner's inability to work (or disability) caused by the work injury?" If the answer is yes, the petitioner would be entitled to temporary disability or wage loss benefits. However, in New Jersey workers' compensation, claims adjusters must ask themselves one very important additional question before paying temporary disability benefits: "Is the petitioner suffering an actual and current wage loss?"

Pursuant to N.J. Stat. Ann. 34:15-12(a), temporary disability benefits are payable during the period of disability from the day the employee is first unable to work because of the injury until the employee is able to resume work and continue permanently. Temporary disability continues until the employee is able to resume work and continue permanently there at or until he is as far restored as the permanent character of the injuries will permit, whichever happens first. Actual absence from work is a prerequisite to a temporary disability award. The purpose of temporary disability benefits is to provide an individual who suffers a work-related injury with a partial substitute for loss of current wages.

It is the petitioner's burden to prove not only that he is available and willing to work, but that he would have been working if not for the disability. This may lead to the question of whether a petitioner is entitled to temporary disability benefits if he becomes disabled at a time when he is no longer employed. The seminal case of Dennis Cunningham v. Atlantic States Cast Iron Pipe Co., 188 N.J. 492 (2006) discusses this very issue. In that case, the petitioner suffered a compensable injury, returned to full-duty work, and was later terminated for cause. Before he obtained other employment, his injury disabled him from the ability to work. There was no dispute that it was the work injury which caused the petitioner to become unable to work. The Court explained that because temporary disability benefits constituted replacement for actual wage loss, the employee must prove that, but for the disability, he would have been employed. Here, when the petitioner became disabled from the work injury, he was no longer employed by the respondent, nor was he employed by any other employer. The Court further commented that they found no material difference between termination for cause versus a voluntary departure. The Court further stated that there had been no allegation that the respondent fired the petitioner because of the disability or to avoid payment of temporary disability benefits (making it unlawful for an employer to discriminate against an employee because an employee has claimed or attempted to claim compensation benefits).

In Cunningham, the Court found that if temporary disability benefits were awarded for a period that the petitioner was not actually employed, then the benefits received would have been replacement for nothing more than a theoretical or fictitious wage loss.

The more recent unreported case Sheila Condi v. CompuCom, circulated on April 16, 2010, affirmed the principles laid out in Cunningham. In Condi, the petitioner sustained compensable orthopedic injuries. The respondent had a company policy that, once an employee had been on medical leave for 12 months, the employee's employment would be terminated. Per company policy, the petitioner was terminated on August 17, 2008, as this marked the twelth month on leave. About one week before that 12-month period was up (August 11, 2008), the petitioner filed a motion for temporary and medical benefits based upon the authorized treating doctor's June 3, 2008, prescription for a psychiatric consultation, evaluation and treatment for reactive depression. The respondent opposed the motion, relying upon a July 24, 2008, Independent Medical Evaluator's conclusion that the petitioner's chronic depression pre-existed and was unrelated to the work injury. Although terminated from her employment, the respondent continued to received her temporary disability benefits because she had not yet been released by the authorized treating doctor from her orthopedic injuries. A few months later, on December 9, 2008, the petitioner was released to return to work with permanent restrictions on an orthopedic basis, and temporary disability ceased. One day later, December, 10, 2008, the petitioner presented to a psychiatrist for an evaluation who wrote in that report that the petitioner had major depressive disorder related to the work injury and was in need of psychiatric treatment. That report did not address the petitioner's ability to work. Based upon this, the petitioner filed another motion for temporary and medical benefits on January 28, 2009. A second Independent Medical Evaluation was scheduled with a different physician, who found that the petitioner did have pre-existing anxiety disorder which was aggravated by the work injury. While the respondent authorized medical treatment, they did not reinstate temporary disability benefits, relying on Cunningham, claming the petitioner had no actual and current lost wages as she was terminated on December 9, 2008, one day prior to the December 10, 2008, evaluation (which was the first date that any doctor related the psychiatric condition to the work injury).

The Court looked to the Cunningham case, which tells one to look at the petitioner's status at the time of her disability and determine whether or not the petitioner is actually losing wages. Here, the petitioner was terminated for cause (she was out on leave for more than 12 months) and there were no current wage loss to replace as of December 10, 2008. The Court reiterated that the sole inquiry is whether an injured worker has lost income because of the work-related disability. More simply put, whether the petitioner was actually employed at the time she became disabled.

*Kristy Olivo is an associate who works in the firm's Cherry Hill, New Jersey, office. She can be reached at (856) 414-6405 or knolivo@mdwcg.com.

Defense Digest, Vol. 16, No. 3, September 2010