Worker’s Compensation Changes Due To COVID-19

Posted on Sep 28, 2020
Worker’s Compensation Changes Due To COVID-19

COVID-19 has undoubtedly changed so many things in our world. A condition that initially required 15 days to “flatten the curve” is changing lives, and even ending some lives, six months and counting, later.

Existing worker’s compensation laws before COVID-19 specifically excluded situations in which communicable illnesses, such as flu or common colds, were spread because there was no proof that exposure didn’t occur outside the workplace.

In fact, most states excluded these types of illnesses in their worker’s compensation coverage requirements. Some states had specific exceptions, such as nurses and healthcare workers that may have been exposed as part of their employment and first responders who developed respiratory illnesses due to exposure to certain chemicals when responding to fires.

Unfortunately, even those exceptions leave some ambiguity as to how they address COVID-19 or if it would even if it would qualify for coverage under existing worker’s compensation regulations and requirements.

State Actions to Respond to COVID-19

These are undoubtedly unprecedented times. Since worker’s compensation laws and requirements vary significantly from one state to the next, it is up to the states to address the issue.  Not only in how the state responds to COVID-19 but also as to whether or not there will be changes to state requirements for worker’s compensation.

In the state of New Jersey, certain amendments were approved by the Commissioner of Banking and Insurance to address the following as they relate to COVID-19:

  • Payroll
  • Premium
  • Classification
  • Experience rating
  • Statistical reporting of claim matters

These amendments also reclassify exposure for employers related to hazards affiliated with working in work-from-home environments.

New Jersey Worker’s Compensation Amendments

There were multiple amendments to existing laws regarding COVID-19 in New Jersey. These are specific amendments to be aware of:

  1. Section 3:3-35 is amended to specifically exclude payroll payments made by employers to employees who are not rendering services to the employer from the basic of premiums. It doesn’t matter where these funds originate. Payroll in these circumstances are to be reported under a new code, 0012. This reporting is only for data tracking purposes.
  2. Section 3:3-25 is amended to allow employees previously assigned higher-rated classifications according to their job duties to be reassigned to a clerical classification (8810) as long as they are now working from home and performing duties more aligned with clerical employees as long as the established classification is not clerical in nature.
  3. Section 3:11-31 and -37 is amended to exclude all COVID-19 claims from being used in the experience rating classification. These amendments are made with the understanding that COVID-19 claims are not indicative of future claim costs by the employer and should not be included in modifications to experience calculations.

The revisions above only apply to policies that are in effect on or after the original date of the state’s stay at home order, March 21, 2020, and will remain until 45 days after the order is lifted. The purpose is to provide employers with the flexibility they require to create safe return-to-work plans.

The amendments are related to the government-declared emergency and should be used to avoid penalizing employers for circumstances beyond their control. The idea of extending these amendments 45 days beyond the date at which “non-essential” businesses can resume operations is designed to allow employers to return to the workplace in a manner that takes appropriate safety and social distancing cautions into effect.

That doesn’t mean employers must bring employees back into the workplace at this time. It simply means that the benefits these amendments provide will end at that time.

Additional New Jersey COVID-19 Workers Compensation Requirements

In addition to the amendments mentioned above, on September 14, 2020, Governor Phil Murphy signe legislation determining that essential workers who test positive for COVID-19 are presumed to have contracted it while at work. The law creates a rebuttable presumption that the contracting of COVID-19 for an essential employee will be considered work-related for the purpose of employment benefits, including but not limited to workers’ compensation. The law shifts the burden of proof to the employer to demomstate by a preponderance of evidence that the essential employee was not exposed to COVID-19 on the job. The law is effective immediately and is retroactive to March 9, 2020.

Getting the Worker’s Compensation Protection Your Business Requires

In these uncertain times, it is more important than ever for employers to take every possible precaution to ensure your employees have the protection they deserve and the law demands. 

It can get quite confusing, though, for business owners to sort out. Work with an independent insurance agency that understands the intricacies of existing laws and the new amendments, like Otterstedt Insurance Agency, to ensure you have all the essential protection.

Why Otterstedt Insurance Agency?

Otterstedt Insurance Agency has been serving the needs of New Jersey businesses and homeowners since 1919. Our commitment has always been serving the needs of the people in our communities rather than simply selling insurance policies.

We understand that these are frightening and confusing times for business owners and the people in our communities. Let us help you get the right worker’s compensation coverage for your business and make sure you understand what these changes mean for you.

Contact us today so we can help you manage your worker’s compensation insurance needs today, and as you bring your workers back into the fold.

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