Newly Signed Hand and Foot Bill Increases Amount of Workers’ Compensation Benefits

Submitted by New Jersey Workers Compensation Lawyer, Jeffrey Hark.

New Jersey Governor Phil Murphy this week signed into law the long-considered hand and foot Bill, increasing the amount of workers’ compensation benefits paid for injuries producing loss of function for such injuries. The Bill accomplishes the legislature’s goal of providing greater compensation for hand and foot injuries by increasing the number of weeks that an employer will pay.  L. 2019, C. 387 also provides modest increases in awards for loss of function of the fingers.

To understand how the new law works, it is important to appreciate that loss of function in New Jersey is compensated with payments of weeks that vary depending on the part of body that is injured.  The more weeks one receives, the more money one receives.  Injuries producing loss of function to the trunk, head, neck, back, shoulder, and hip (falling under the partial total category on the rate chart) are compensated the highest in New Jersey with each percentage correlating to a payment of 6 weeks.  So an award of 50% for loss of function of the back means payments will be made over 300 weeks because each percent awarded is multiplied by 6 to arrive at total weeks.

Historically, hand and foot injuries have been compensated with a relatively small number of weeks compared to those involving the back, neck, trunk, and shoulder as described above.  Currently an injury producing loss of function of 1% of the hand is compensated with 2.45 weeks.  Under the new law, such an injury is now compensated at 2.6 weeks until the award level reaches 25%.  Similarly, under current law an injury producing loss of function of 1% of the foot is compensated with 2.3 weeks.  Under the new law, each percent of loss of function of the foot is now compensated at 2.5 weeks until the award level reaches 25%.

Here is the big change.  For more serious hand and foot injuries, the new law creates a stepped up number of weeks.  This is new to New Jersey law.  L. 2019, C. 387 creates a disability threshold at which there is now a second increase in the number of weeks over current law.  The threshold is 25% loss of function.  Once an award is found to produce loss of function of 25% of the hand, each percentage of the hand is compensated at 3 weeks instead of 2.6 weeks (current law is 2.45 weeks).  Similarly, at 25% of the foot, each percentage of the foot is compensated at 2.85 weeks instead of 2.5 weeks (current law is 2.3 weeks).  So the big change is that hand and foot injuries, unlike all other scheduled losses (legs, arms, etc) will have two schedules for weeks for compensation.  There will be one weekly schedule for loss of function under 25%, and then a new weekly schedule for loss of function of 25% or higher.

This sounds confusing but it is easier to understand by considering an award of 25% of the hand and 25% of the foot.  Such an individual will receive 75 weeks of benefits (3 weeks times 25) instead of 65 weeks because there is an upward adjustment in the number of weeks at the 25% level. (Note that current law is 61.25 weeks for 25% of the hand).  An injured worker with an award of 25% of the foot will receive 71.25 weeks of benefits instead of 62.5 weeks if there had been no upward adjustment in the number of weeks. (Note that current law is 57.5 weeks for 25% of the foot).  This will make a larger percentage difference in dollars as the loss of function rises.

This concept should ring a bell for experienced practitioners who know about the “bump” at 30% permanent partial disability.  In 1979, the New Jersey Legislature accomplished the same goal of compensating more serious injuries with higher dollar rates when an injury produces loss of function greater than 30% or above 180 weeks.  The hand and foot bill does it differently.  It does not increase the dollar rate for each week, but rather it increases the number of weeks of compensation one will receive once an injury reaches the 25% loss of function threshold.   An injured worker will receive more weeks of compensation over current law for hand and foot injuries no matter what the percentage, but when the injury produces loss of function of 25% or higher, that injured worker will receive an upward adjustment to his or her weeks starting from week one.

Let’s consider an award of 50% of the hand and 50% of the foot under the new law at 2020 rates versus the current law.  One can see that in actual dollars, the new law generates substantially more money to an injured worker on account of the jump in weeks for any award at or above 25%.

Current law – 50% of the hand equals 122.5 weeks or $33,364
New law – 50% of the hand equals 150 weeks or $43,128 (an increase of 29%)

Current law – 50% of the foot equals 115 weeks or $30,969
New law – 50% of the foot equals 142.5 weeks or $40,318.50 (an increase of 30%)

Now let’s compare an award of 15% for carpal tunnel syndrome and an award of 15% for tarsal tunnel syndrome:

Current law – 15% of the hand equals $9,261
New law – 15% of the hand equals $9,828 (an increase of 6%)

Current law – 15% of the foot equals $8,694
New law – 15% of the foot equals $9,450 (an increase of 8%)

Readers can see that the percentage increase in dollars on small awards is far less than the percentage increase on higher awards.  The new law also makes some minor changes in compensation for the following finger injuries in terms of adjusting weeks higher:

• 80 weeks of compensation for the low of a thumb (currently 75);
• 60 weeks of compensation for the loss of a first (index) finger (currently 50);
• 50 weeks of compensation for the loss of a second finger (currently 40);
• 40 weeks of compensation for the loss of a third finger (currently 30);
• 30 weeks of compensation for the loss of a fourth (little) finger (currently 20)

There are two other changes to N.J.S.A. 34:15-12 worth mentioning as part of this Bill.  Section 12E has been amended to raise from $3,500 to $5,000 the amount paid by the employer in case of death of the person from any cause other than the accident or occupational disease during the period of payments of permanent injury.  The remaining payments shall be paid to such of the deceased person’s dependents or, if there are no dependents, the remaining amount due, but not exceeding $5,000, shall be paid for burial or funeral expenses.

In addition, Section 12(c) has been amended to read: “An award of permanent total disability shall not bar an additional amount from being added to an amputation award.  The amount of the additional award shall not be subject to subrogation pursuant to R.S. 34:15-40, as it shall not be considered a payment for compensation except for rating purposes.”  This clarifies that the so-called amputation bonus is not lienable and is payable even in the case of a total and permanent disability award.