Key Takeaways

  • On September 24, 2021, New Jersey Gov. Phil Murphy signed into law a bill amending the New Jersey Workers’ Compensation Act to require employers with 50 or more employees to provide a hiring preference to employees, following a work-related injury, who have reached maximum medical improvement but are unable to return to the position at which the employee was previously employed

  • Going forward, employers with 50 or more employees must tread carefully whenever an employee who suffers a work-related injury reaches maximum medical improvement, but is unable to return to his or her former position based on new permanent work restrictions

  • Employers with 50 or more employees may now have further incentive to challenge worker’s compensation petitions and rulings, especially regarding maximum medical improvement/permanent restriction determinations

On September 24, 2021, New Jersey Gov. Phil Murphy signed into law a bill that amends New Jersey’s Workers’ Compensation Act to require employers with 50 or more employees to provide hiring preferences to employees, following a work-related injury, who have reached maximum medical improvement but are unable to return to the position at which the employee was previously employed.

The law does not require employers to create a new position for an employee who cannot return to his or her previous position. Notably, this law also does not impair any right of an individual with a disability to a reasonable accommodation under the New Jersey Law Against Discrimination.

This law raises more questions than answers. The law does not define “hiring preference” or provide any guidance as to an employer’s obligation in that regard, making it unclear whether an employer that makes a good-faith determination that another applicant is more qualified can still be liable under the law. Employers must also be mindful not to discriminate against other job applicants on the basis of any protected trait when providing this hiring preference.

The law is also silent on what avenues an aggrieved employee has. It does not expressly permit employees to sue their employers at all, although a court may conclude that an employee has an implied right to do so, as with the anti-retaliation provision of the Workers’ Compensation Act. If employees are permitted to sue, the law does not identify the court in which the employee may sue (e.g., Superior Court of New Jersey or Worker’s Compensation Court). Nor does the law identify what remedies are available to employees. Under traditional employment discrimination laws (e.g., the New Jersey Law Against Discrimination), an employee is entitled to back pay, front pay, emotional distress damages, attorney’s fees, and possibly even punitive damages. An employee may also seek non-monetary relief, such as reinstatement. Workers’ compensation, meanwhile, provides employees set benefits such as medical treatment, wage replacement (subject to certain limitations), and permanent disability compensation for work-related injuries and illnesses, regardless of fault.

Finally, this law only entitles employees to hiring preferences if they have reached maximum medical improvement but cannot return to the position at which they were previously employed. This appears to incentivize employers to challenge workers’ compensation applications from the outset, as well as determinations that employees have permanent restrictions once they have reached maximum medical improvement. This could ultimately be to the detriment of the very employees the law is designed to protect, as it could result in denial of workers’ compensation applications or determinations, and/or delays in those employees obtaining workers’ compensation benefits.