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NJ governor signs COVID-19 supplemental benefits bill

New Jersey Gov. Phil Murphy

New Jersey Gov. Phil Murphy on Monday signed a bill to provide supplemental benefit payments to the dependents of essential workers who died from COVID-19 in the course of employment.

S.B. 2476 also provides a cost-of-living adjustment to workers compensation death benefits for dependents of essential workers who died from the disease.

The bill applies to benefits paid for all deaths that occurred after March 1, 2020. The measure defines essential employees to include public safety workers and first responders, health care providers, social service and emergency transportation workers. The bill also defines essential workers to include anyone performing functions that are essential to health, safety and welfare, and who operate in physical proximity to the public, including sale and distribution of food, medicine, fuel and supplies for conducting essential business.

Funding for the increased benefits will come from the state’s Second Injury Fund, which was created to help incentivize employers to hire workers with preexisting disabilities. The fund pays benefits to workers already partially disabled who suffered a second work-related injury that exacerbated the preexisting condition.

Gov. Murphy said in a statement the bill will create “certain complications” for the Department of Labor and Workforce Development regarding setting the annual surcharge for the SIF.

“The unique definition of essential employees in the bill coupled with the fact that the average salaries of essential workers vary greatly may prevent the DOLWD from being able to accurately calculate the cost of the benefits,” Gov. Murphy’s statement reads. “Because of these difficulties and the still unknown long-term effects of COVID-19, the bill could strain the fund balance of the SIF, in which case the payment of the benefits provided under this bill may necessitate a general fund appropriation.”

Gov. Murphy commended the Legislature for taking steps to ensure benefits paid to essential workers are commensurate with the annual cost of living. He said he signed the bill so essential workers would receive fair and financial compensation, even though he does not think SIF is the most appropriate funding source.

“Insufficient funding of the SIF poses a risk of significant harm to the disabled workers and their families who rely upon these benefits,” the governor’s statement reads. “The recent trend of utilizing the SIF to pay expenses for which the SIF was never intended is a troubling development. I look forward to working with my partners in the Legislature to find new ways to compensate our dedicated workforce without jeopardizing the funds that provide a critical lifeline to the workers and families for which the funds were established.”

WorkCompCentral is a sister publication of Business Insurance. More stories here.