On Thursday, August 22, Senate President Nick Scutari, in his capacity as Acting Governor with Governor Murphy and Lt. Governor Way out of state, signed A-3986/S-2822, which increases workers’ compensation contingency fees from 20% to 25%.
The League strongly opposed this measure and had, testified multiple times against its passage in legislative committees. Most workers’ compensation cases are already settled near the 20% threshold and increasing it to 25% will undoubtedly increase municipal costs and strain compliance with the 2% appropriations cap. In addition, workers’ compensation insurance was among the items excluded from the appropriations cap by the Local Finance Board pursuant to Local Finance Notice 2024-03 issued by the Division of Local Government Services. These actions underscore the worrisome trend of ever-increasing insurance costs.
At the 2023 New Jersey State League of Municipalities Annual Conference, Resolution 2023-14 “Urging Action to Provide Relief from Increased Insurance Costs” was adopted. As noted in that Resolution, New Jersey has the highest workers’ compensation premiums in the nation. It urged that no further legislation be considered until an analysis as to why this was, and a plan enacted to reduce these premium costs to municipal taxpayers is enacted.
A-3986/S-2822 took effect immediately but will only apply to all claims pending on or after August 22.
Please review this information with your municipal professionals to determine the impact on your municipal budget.
Contact: Paul Penna, Senior Legislative Analyst, ppenna@njlm.org, 609-695-3481, x110.