COVID-19 and Worker's Compensation Benefits In Pennsylvania and New Jersey

As COVID-19 has spread throughout the region, there is uncertainty as to the degree of its ultimate impact on an employee’s receipt of Pennsylvania and New Jersey workers’ compensation benefits. Employers are likely to face wage loss and medical claims, as well as requests for a reinstatement of benefits. The following is a brief overview of the impact that COVID-19 may have on Pennsylvania and New Jersey workers’ compensation claims.

Pennsylvania

The Pennsylvania Department of Labor & Industry has provided guidance with regard to whether or not COVID-19 is a compensable work injury. The Department has provided employees within the Commonwealth with two options to file for workers’ compensation benefits.

Claim as an Injury

First, an employee may file as a “disease-as-injury” claim. In order to be successful, at a minimum, an employee must present medical evidence to prove that he or she was exposed to COVID-19 in the workplace. The defendant would maintain its right to present evidence establishing that the employee could have contracted COVID-19 from a non-work-related source. This requires an employee to prove, through credible evidence, that his or her exposure to COVID-19 occurred in the workplace or at a site where the employee was required to be present to perform assigned work duties.

With exposure to COVID-19 stemming from various sources, it will be difficult for an employee to establish that his or her exposure occurred as a direct result of performing his or her job duties. The employer can create doubt as to the exact source of the virus, that an attempt by a medical expert to causally relate the exposure to one’s employment will more than likely be found to lack credibility.

Claim as an Occupational Disease

Second, an employee may file an “occupational disease” claim. In order to prevail, at a minimum, the employee must show that COVID-19 occurs more in the employee’s industry or occupation than in the general population. For example, those employees in the healthcare industry would be more likely to meet their burden of proof than employees in other industries.

Specifically, with regard to an occupational disease claim, as COVID-19 is not an enumerated disease, Section 108(n), the "catch-all" provision, applies. It establishes that an employee can claim that he or she sustained an occupational disease within the Act for a disease (1) to which the claimant is exposed by reason of his employment, and (2) which are causally related to the industry or occupation, and (3) the incidence of which is substantially greater in that industry or occupation than in the general population. If the disease falls within the “catch-all” provision, there is a rebuttable presumption that COVID-19 was related to the employee’s work, thereby shifting the burden to the employer.

From a practical standpoint, if it is found that COVID-19 does not meet the criteria set forth in the catch-all provision, it will be very difficult for the employee to meet his or her burden of proof that the contraction of COVID-19 is the result of exposure in the course and scope of employment.

Notably, the Workers' Compensation Insurance Organization approved the addition of a new code related to COVID-19. Specifically, there is a new Cause Code of 83 for Pandemic and a new Nature Code of 83 for COVID-19. As of April 1, 2020, EDI reporting and collections systems will be modified to recognize these new codes.

Reinstatement of Benefits

The Governor of Pennsylvania, Tom Wolf, recently signed an executive order closing all non-essential businesses as a result of the COVID-19 pandemic. This shutdown will potentially have an impact on an employee's receipt of workers' compensation benefits.

The most likely cases will involve employees who have returned to work in a light duty capacity after the acknowledgment of a work injury. These employees have previously been protected after a layoff, having been afforded the presumption that their wage loss is related to the work injury. Light duty employees have traditionally been treated differently than those who are working regular duty, as it is assumed that the light duty worker is not as capable of finding other work as the full duty employee. However, a strong argument can be made that a routine layoff is vastly different than the present day COVID-19 situation, as both the full duty and light duty employees are similarly situated. In other words, with all non-essential businesses forced to comply with Governor Wolf's order, both the full duty and light duty employees will be unable to find work. Therefore, defendants can argue that a light duty employee's benefits should not be reinstated as a result of a COVID-19 shutdown.

Furthermore, in the setting of a Claim or Reinstatement Petition, defendants should consider making the argument that, if benefits are ultimately awarded, the defendant is entitled to a "credit" for the period of the shutdown of all non-essential businesses. The basis for this argument is that those employees would receive a windfall if they are able to collect wage loss benefits for a period of time when those working full duty at the time of the shutdown did not receive wages.

In the event that it is determined that an employee’s benefits should be reinstated, it is recommended that the employee complete LIBC-756, Employee’s Report of Benefits, to determine if the employee is receiving any benefits where a credit against workers’ compensation benefits can be taken, such as unemployment compensation. In addition, if the employee receives a COVID-19 stimulus check from the federal government, the employer can potentially argue that it is entitled to a credit for same.

New Jersey

The New Jersey Department of Labor & Industry has recently stated that if an employee is directed to self-quarantine by his or her employer or a public health official, subsequent to known exposure to COVID-19 during the course of his or her work, the employee may be entitled to workers’ compensation benefits.

Pursuant to N.J.S.A. 34:15-31, a compensable occupational disease is a disease that arises out of and in the course of employment, which is due in a material degree to causes and conditions, which are or were characteristic of or peculiar to a particular trade, occupation, process or place of employment.

Based upon the above statutory provision, as well as relevant case law, it will likely be difficult for an employee to prove that COVID-19 was “more probably than not” contracted at work. Specifically, many employees will not be able to meet the burden of relating the COVID-19 exposure to his or her employment, as it will be difficult to prove that the exposure occurred at work. However, there are certain professions, including those within the healthcare industry, where an employee can more easily prove that he or she came into contact with an individual that tested positive for COVID-19, and, therefore, should be entitled to workers’ compensation benefits.

Reinstatement of Benefits

The Governor of New Jersey, Phil Murphy, recently issued an executive order directing all non-essential businesses to close in light of the COVID-19 pandemic. If a petitioner was out of work due to a work injury and was collecting temporary total disability benefits when the employer closed pursuant to Governor Murphy’s order, it is likely that the petitioner would be entitled to continue receiving temporary total disability benefits. However, if a petitioner returned to work in a light duty capacity and the employer is required to close in order to comply with Governor Murphy’s order, similar to Pennsylvania, a strong argument can be made that the employee is not entitled to a reinstatement of temporary total disability benefits. Specifically, it can be argued that similarly situated employees working full duty would also not have the benefit of getting paid, so there is no reason for the petitioner, on modified duty, to receive that benefit.

Practice Tip

For all claims involving COVID-19, it is imperative to perform a thorough investigation. Strong consideration should be given to obtaining recorded statements from the employee, wherein he or she must provide responses to questions pertaining to possible contraction of the disease through a non-work-related source.

About Berman Voss

Berman Voss is an innovative and progressive firm dedicated to excellence in the practice of law and in servicing its clients exclusively in the area of workers’ compensation. The firm defends clients ranging from Fortune 500 companies to small businesses, including those in the areas of construction, entertainment, food services, healthcare, hospitality, professional sports, retail and transportation. Its attorneys have earned a reputation of capturing the unique combination of high ethical standards, creative thinking and outstanding trial skills.

For additional information, please communicate with the attorney in the firm with whom you are in regular contact.

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Disclaimer: This newsletter has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice.