New Jersey Enacts COVID-19 Workers’ Compensation Presumption Bill for Essential Workers

On September 14, 2020, New Jersey Governor Phil Murphy signed Senate Bill (SB) 2380 into law. SB 2380 creates a rebuttable presumption of workers’ compensation coverage for COVID-19 cases contracted by “essential employees” during a public health emergency declared by an executive order of the governor. The law is effective immediately and retroactive to March 9, 2020.

The law defines “essential employee” as “an employee in the public or private sector who during a state of emergency”:

1. is a public safety worker or first responder, including any fire, police or other emergency responders;
2. is involved in providing medical and other healthcare services, emergency transportation, social services, and other care services, including services provided in health care facilities, residential facilities, or homes;
3. performs functions which involve physical proximity to members of the public and are essential to the public’s health, safety, and welfare, including transportation services, hotel and other residential services, financial services, and the production, preparation, storage, sale, and distribution of essential goods such as food, beverages, medicine, fuel, and supplies for conducting essential business and work at home; or
4. is any other employee deemed an essential employee by the public authority declaring the state of emergency.

Number four is akin to a “catchall” provision that includes any workers deemed essential through public authority, such as executive orders issued by Governor Murphy during the pandemic. Examples include:

• grocery/food store employees;
• pharmacy employees;
• medical supply store employees;
• employees in retail functions of gas stations;
• convenience store employees;
• cashier and store clerks;
• construction workers; or
• employees providing childcare services to “essential employees.”

Under the new law, in a public health emergency declared by the governor, if an individual contracts COVID-19 during a time in which the individual is working as an essential employee in a place of employment other than the individual’s own residence, there shall be a rebuttable presumption that the contraction of the disease is work related and fully compensable for the purposes of workers’ compensation benefits.

An employer may rebut this presumption by a preponderance of the evidence showing that the worker was not exposed to the disease while working in the place of employment other than the individual’s own residence. Any workers’ compensation claims paid as a result of the rebuttable presumption provided in the law will not be considered in calculating an employer’s Experience Modification Factor, pursuant to the New Jersey Workers’ Compensation and Employers Liability and Insurance Manual administered by the Compensation Rating and Inspection Bureau established by Section 2 of P.L.1995, c.393 (C.34:15-89.1) and Section 1 of P.L.2008, c.97 (C. 34:15-90.1).

Establishing a presumption of compensability for certain essential workers during the pandemic has become a growing trend among states that significantly lessens an employee’s burden of proving that a COVID-19–related illness is compensable under workers’ compensation laws. Details of these state law amendments vary. For more detail and the latest developments, please refer to our Workers’ Compensation Coverage chart. In states that have implemented a rebuttable presumption, such as New Jersey, employers will be faced with the difficult burden of proving that an alleged COVID-19 contraction is not work related. However, while employers in these states may be faced with an uptick in workers’ compensation claims, employers will also likely be insulated from civil liability pursuant to the workers’ compensation bar, absent some exception to the bar, such as the intentional injury exception.

Ogletree Deakins will continue to monitor and report on developments with respect to the COVID-19 pandemic and will post updates in the firm’s Coronavirus (COVID-19) Resource Center as additional information becomes available. Important information for employers is also available via the firm’s webinar programs.