Op-Ed: NJ Legislation to Shift COVID-19 Costs to Workers’ Comp Would Leave Federal Funds on Table

Alida Kass | July 29, 2020 | Opinion, Coronavirus in NJ
Shifting workers from federal programs to state-based workers’ compensation ‘places an additional burden on New Jersey businesses and taxpayers’
Alida Kass

Legislation that would shift the cost of the COVID-19 pandemic to New Jersey businesses and taxpayers is set to be voted out of the Assembly this Thursday and sent to the governor’s desk.

The bill would dictate that “essential” employees who develop COVID-19 are presumed to have caught it on the job, and therefore are entitled to full workers’ compensation benefits, in place of otherwise available federal funding.

At a time when the pandemic has put the entire state in a cash crunch, this legislation would have the effect of leaving federal dollars on the table, shifting cost of COVID-19 infections from federal CARES Act programs to New Jersey’s workers’ comp system.

We all appreciate the work that essential employees continue to do. And under existing law, they are already entitled to workers’ compensation when they can demonstrate that it’s more likely than not that they caught the virus on the job.

Early in the shutdown, an essential employee with significant interaction with the general public was very likely to meet that burden. Absent obvious other exposure like a family member already diagnosed, testimony that he or she went to work, came home and maybe walked the dog would be compelling.

But since New Jersey’s stay-at-home order was lifted June 9, economic and social interactions have increased significantly — from nonessential retail stores opening, to participation in protests, beach parties and travel to out-of-state hotspots. As these interactions have increased, COVID-19 infection rates have predictably begun to creep up.

Absence of supporting data

But there’s no data to suggest that it’s the result of increased risk for essential employees. And as we learn more about how the virus is transmitted, we can see why frontline retail and other essential workers have been spared the brunt of the COVID-19 virus. Knowing that the virus is most commonly transmitted through close-up, person-to-person interactions for extended periods has allowed business to adopt tactics to minimize that risk. Plexiglass barriers are up, and mask-wearing protocols are now universal for both employees and customers.

The same cannot be said for interactions off the job. Gov. Murphy and others have repeatedly tied the increase in new cases to parties and travel. As opportunities for transmission off the job increase, the validity of a legal presumption of on-the-job transmission becomes ever more attenuated. But in the legislation, as released from the Senate, the presumption is retroactive to the beginning of the declared public health emergency, and continues indefinitely, for as long as the emergency continues or is renewed.

The legislation also includes an expansive definition of “essential employee.” It not only covers health, emergency and first-responder workers, who are already entitled to a presumption of workplace infection under Canzanella legislation. It also includes everyone working at an “essential business” regardless of their interaction with the general public.

This legal fiction of on-the-job infection is not just contrary to available data, it’s also unnecessary. Advocates have been strangely ill-informed about the available programs, claiming workers who develop COVID-19 are “falling through the safety net.”

Federal benefits exceed workers’ comp

But from the beginning of the pandemic, anyone who is unable to work for a COVID-19-related reason is eligible for federal benefits that exceed what an employee would receive under workers’ compensation, and in most cases exceed even what an employee would earn working full time. Thanks to the federal CARES Act, Pandemic Unemployment Assistance benefits provide 60% of the regular wage, while the federal Pandemic Unemployment Compensation benefit provides a supplemental $600 per week. Both of these programs have been available to all workers, “essential” or otherwise. The supplemental $600 is currently available through the end of this month but is likely to be extended. Federal benefits also cover all COVID-19-related medical expenses for anyone who lacks health insurance.

Shifting workers from these federal programs to state-based workers’ compensation places an additional burden on New Jersey businesses and taxpayers, all to ensure a lower level of benefit for affected employees.

Gov. Murphy says he is guided by facts and science. But there is simply no data to support a presumption that workers are contracting COVID-19 on the job. This legal fiction is bad policy, and it will be New Jersey businesses, consumers and taxpayers who will pay the price.