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Can an Employee Be Paid Less on Light Duty than the Employee Was Receiving in Temporary Disability Benefits?

New Jersey has a powerful provision allowing employers to terminate temporary disability benefits on an offer of light duty, provided that the offer is made.  If it is made, the employee must return to the light duty job or temp benefits will be terminated.

But what happens if the light duty offer involves fewer hours than the employee normally worked and less pay than the rate of temporary disability benefits?  There is no published case on this issue but there is a helpful decision in the Division of Workers’ Compensation entitled Soto v. Herr’s Foods, Inc., 2012 NJ Wrk. Comp. LEXIS 4 (September 7, 2012).

Mr. Soto was injured at work on January 29, 2011 and underwent two authorized surgical procedures involving his left knee.  In January 2012, the authorized treating physician wrote a report stating petitioner could return to work light duty.  “I would like to start light duty and see if we can get him back to work, sedentary, four hours a day, and progress to eight hours.”

The employer made a light duty offer for four hours a day.  Petitioner had been earning $976.15 per week at the time of his injury, entitling him to a temp rate of $683.31 per week.  However, his light duty wage was much lower since he was only working four hours per day.  While on light duty petitioner was receiving a net payment of $329.43 per week.  That was $353.88 less per week than petitioner was receiving on temp benefits.

Petitioner returned to the light duty job but also contested in the Division of Workers’ Compensation the right of the employer to pay him less than the amount he was receiving on temporary disability benefits.  The Honorable Emille Cox, Supervising Judge of Compensation, ruled in favor of petitioner, holding that a temporarily disabled worker is entitled to temporary disability benefits of 70% of his or her wage subject to the maximum and minimum limits in effect for the year in question. The Judge reasoned:

It seems rather obvious to this Court that if Respondent is responsible for the payment of temporary disability benefits, and, in this case, the amount to which Petitioner is entitled is $683.31 per week, to allow Respondent to provide minimum light duty and only pay the Petitioner an amount less than the $683.31 to which he is entitled defeats the purpose of both the temporary disability and the light duty provisions of the workers’ compensation statute.

The decision of Judge Cox was not appealed, and had it been, the decision would no doubt have been affirmed.  The reasoning is sound, that one is still temporarily disabled while on light duty and therefore an employee must receive at least as much as his or her temp rate while working light duty until the employee reaches maximal medical improvement or returns to work full duty. Light duty cannot be used to reduce an employee’s wage below the rate of temporary disability benefits.

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John H. Geaney

About the Author

About the Author:

John H. Geaney, an executive committee member and shareholder with Capehart Scatchard, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.

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There Are 4 Brilliant Comments

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  1. Marita Tortorelli says:

    There is no provision in the ACT for the payment of temporary partial disability. That is not a benefit type as defined. As claims professionals, we must advise our clients to either bring the employee back at their pre-accident wage or pay them at least at the temporary total rate if they are returning to work at reduced hours. Insurance carriers are required to unit report benefits to the rating and inspection bureau. When the temporary total rate is reported, but partial benefits are paid, it could generate a bureau criticism to correct or explain the rate.

  2. Robert Franchetti says:

    I’m glad for the clarification on making a claimant “whole” while at reduced wages. There is simply no other way to make a Light Duty program work for insured employers and I’m glad there is some legal basis to support compensating the workler.
    I also think that in the right circumstances, a RTW at reduced wages could be a great time to make a voluntary offer of PPD in lieu of paying the temporary disability. Any thoughts on that? Thanks so much. Robert

    • Great comments Robert and Marita. An interesting point that the judge did not raise is that NJSA 34:15-38 says that the period of temp is calculated by adding up all the days the employee is unable to work and then subtracting days or parts of days that the employee was able to work. In other words, our statute contemplates temp being paid for parts of days not worked, and this employee could only work four hours per day. I don’t think we could make a voluntary offer of permanency at the same time that temp is being made. NJSA 34:15-16 states that compensation is consecutive: first medical, then temp, then permanency. I agree with your point that the only way to make a light duty program work is to make the employee whole while on light duty.

      John Geaney

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