Calculating Temporary Disability Benefits in New Jersey Workers’ Compensation

The New Jersey Workers Compensation Act recognizes three types of indemnity benefits: temporary disability, permanent disability and dependency benefits. For each of these benefits, the benefit rates will be determined based off of the petitioner’s wage rate or average weekly wage at the time of the loss. Therefore, in order to calculate the petitioner’s temporary disability benefit rate, it is important to first calculate the petitioner’s wage rate or average weekly wage.

The petitioner’s wage rate or average weekly wage is simply the amount of money the petitioner makes in an average work week. In New Jersey, when the petitioner’s wage rate varies from week to week, employers will use a 26 week or 6 month analysis to determine the petitioner’s average weekly wage rate for which the petitioner gets paid. Simply stated, an employer may add the petitioner’s last 26 weeks of wages together and divide that number by 26. For example, if the petitioner made $500.00 on odd weeks and $700.00 on even weeks, for 26 weeks, the petitioner would have an average weekly wage of $600.00. This was equated by adding together the 13 weeks of wages at $700.00 with the 13 weeks of wages at $500.00 and dividing that number by 26. The 26 week analysis approach, however, may not always be applicable considering that the nature of the work may be seasonal or part time. Therefore, in New Jersey, if the 26 week analysis has the effect of not representing the petitioner’s true weekly wage rate, then the courts may look to the hourly rate.

Under NJSA 34:15-37, in order to determine the petitioner’s average weekly wage rate, using the petitioner’s hourly rate, one must multiply the hourly rate of pay by the number of hours the employee customarily worked at the time of the accident. Specifically, the statue states that one must determine the “customary number of working hours constituting an ordinary day in the character involved.”

For example, if a roofer makes $10.00 an hour roofing, where the customary number of hours per week for a roofer is 40 hours, the petitioner will likely be deemed to have an average weekly wage of $400.00. This was equated by taking the $10.00 an hour and multiplying it by the custom 40 hours per week. As long as the petitioner was willing and able to work the 40 hours, as is customary in the industry, the petitioner will be deemed to have an average weekly wage rate of $400.00. This may be so even if the petitioner never worked a full 40 hour work week.

Once we have the petitioner’s average weekly wage, in order to determine the petitioner temporary disability benefits in New Jersey, one must simply take 70% of the average weekly wage. Using the example above, if the petitioner has an average weekly wage of $400.00, the rate of temporary disability will be $280.00.

Rate Restrictions

Please note that the rate of temporary disability is subject to the maximum and minimum wage rate for that particular statutory year. For example, for the year 2016, a petitioner may not receive temporary disability benefits in an amount that exceeds the maximum rate of $871.00. To the contrary, the petitioner may not receive temporary disability benefits in an amount below the minimum of $232.00. It is important to look up the wage rate for that year prior to calculating the temporary disability rate as the maximum and minimum change nearly every year. The year will be based on the year the petitioner sustained his or her injury.

Waiting Period

When calculating the temporary disability benefit rate, it is important to remember that the petitioner will need to be out of work for at least 7 days before the petitioner can collect temporary disability benefits. N.J.S.A. 34:15-14. Once the petitioner misses more than 7 days, the petitioner will be able to collect temporary disability benefits for all time going forward as well as the original 7 days missed.

Time Restraints

Finally, please note that the petitioner may only collect 400 weeks of temporary disability benefits, which equates to roughly over 7 and a half years. Therefore, once the petitioner receives his 400th week of compensation, the employer is no longer obligated to provide the petitioner with temporary disability benefits.

Learn more.

Download our New York Workers’ Compensation law Handbook:

Handbook

Register for our New York webinar series:

Register for Webinars

Sign up for monthly newsletter:

Newsletter

Michael Gervolino is an associate attorney at Lois LLC where he defends employers and carrier in New Jersey workers’ compensation claims. He can be reached directly at mgervolino@lois-llc.com or 201-880-7213.