NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-3209-11T1
GINA PARASCANDOLO,
Appellant, APPROVED FOR PUBLICATION
v. May 22, 2014
DEPARTMENT OF LABOR, APPELLATE DIVISION BOARD OF REVIEW, BRICK TOWNSHIP BOARD OF EDUCATION and VINNY'S KING PIZZA,
Respondents. ________________________________________________________________
Submitted October 16, 2013 – Decided May 22, 2014
Before Judges Fisher, Espinosa and Koblitz.
On appeal from the Board of Review, Department of Labor, Docket No. 333,049.
Pezzano Mickey & Bornstein LLP, attorneys for appellant (Lisa Pezzano Mickey, on the brief).
John J. Hoffman, Acting Attorney General, attorney for respondent Board of Review (Lewis A. Scheindlin, Assistant Attorney General, of counsel; Alan C. Stephens, Deputy Attorney General, on the brief).
Berry, Sahradnik, Kotzas & Benson, attorneys for respondent Brick Township Board of Education, join in the brief of respondent Board of Review.
Respondent Vinny's King Pizza has not filed a brief. The opinion of the court was delivered by
ESPINOSA, J.A.D.
In enacting the Temporary Disability Benefits Law (TDBL),
N.J.S.A. 43:21-25 to -66, the Legislature sought to provide
relief to workers who suffered involuntary unemployment and loss
of wages due to illness or injury that was not covered by the
Workers' Compensation Act (WCA), N.J.S.A. 34:15-1 to -128.5.
The TDBL was to "fill the gap" in existing employee welfare
legislation and expressly provided that its benefits should not
duplicate benefits provided under the WCA. See N.J.S.A. 43:21-
26, -30. Because the TDBL was generally applied to situations
involving one employer, the legal issue that typically arose
thereafter involved an "either/or" analysis; the injury was
either covered by the WCA or the TDBL but not both.
We first considered the interplay of the two statutes in a
case where the worker had two employers in In re Scott, 321 N.J.
Super. 60 (App. Div. 1999), aff'd, 162 N.J. 571 (2000). The
worker was injured at his part-time job and we determined that
the receipt of temporary workers compensation benefits (TWCB)
from that employer did not bar the receipt of temporary
disability benefits (TDB) for the loss of wages from his primary
employer. Id. at 65-66. This appeal requires us to examine the
interplay of the two statutes once again to determine their
2 A-3209-11T1 application when only one of two employers is a "covered
employer" under the TDBL and whether the right to subrogation
applies under such circumstances even though there was no
duplication of benefits.
Appellant Gina Parascandolo held two part-time jobs when
she was injured in the course of her employment at one of the
jobs. She received TWCB from the employer where she was
injured, a public employer that did not participate in the State
Disability Benefits Fund, and TDB through her other employment.
Although she received both forms of benefits, she did not
receive duplicate benefits. She appeals from a final agency
decision of the Department of Labor, Board of Review (the
Board), that held appellant was obligated to reimburse the
Division of Temporary Disability Insurance (the Division)
because she received both TDB and TWCB for the same injury. For
the reasons that follow, we reverse.
I
We begin by briefly reviewing the history of employee
welfare legislation, which began with the enactment of the WCA.
Originally enacted in 1911, the WCA represented a "'historic
trade-off whereby employees relinquished their right to pursue
common-law remedies in exchange for automatic entitlement to
certain, but reduced, benefits whenever they suffered injuries
3 A-3209-11T1 by accident arising out of and in the course of employment.'"
Van Dunk v. Reckson Assoc. Realty Corp., 210 N.J. 449, 458-59
(2012) (quoting Millison v. E.I. du Pont de Nemours & Co., 101
N.J. 161, 174 (1985)). Compensation under the WCA is limited to
injuries suffered "in the course of employment when the employee
is engaged in the direct performance of duties assigned or
directed by the employer." N.J.S.A. 34:15-36; see Hersh v.
Cnty. of Morris, 217 N.J. 236, 249-50 (2014).
The next development came in 1936 with the passage of the
Unemployment Compensation Law (UCL), N.J.S.A. 43:21-1 to -24.30.
See Butler v. Bakelite Co., 32 N.J. 154, 160 (1960). From the
outset, the UCL was recognized as remedial legislation, its
"primary objective" being "to provide a cushion for the workers
of New Jersey 'against the shocks and rigors' of unemployment."
Philadelphia Newspapers, Inc. v. Bd. of Review, 397 N.J. Super.
309, 318 (App. Div. 2007) (internal citation omitted), certif.
denied, 195 N.J. 420 (2008). Accordingly, the provisions of the
UCL are liberally construed, even permitting a statutory
employer-employee relationship, the "center of the UCL," to be
found when the facts might not satisfy common law principles.
Id. at 318-19.
However, the worker who suffered involuntary unemployment
as the result of a disabling accident or illness that did not
4 A-3209-11T1 arise in the course of employment received no relief from these
statutes. See Butler, supra, 32 N.J. at 160-62; Janovsky v. Am.
Motorists Ins. Co., 11 N.J. 1, 4 (1952). In enacting the TDBL
in 1948, the Legislature recognized the need
to fill the gap in existing provisions for protection against the loss of earnings caused by involuntary unemployment, by extending such protection to meet the hazard of earnings loss due to inability to work caused by nonoccupational sickness, accidents, or other disabilities of workers.
[N.J.S.A. 43:21-26 (emphasis added).]
The Legislature declared that the TDBL was remedial
legislation to be liberally construed. Ibid. The Legislature
also clearly expressed its intent that, while the TDBL was to
fill a gap in the protections afforded by the WCA and the UCL,
it would not duplicate the benefits provided by those statutes.
The TDBL thus allows "the payment of reasonable cash benefits to
eligible individuals who are subject to accident or illness
which is not compensable under the workers' compensation law."
Ibid. (emphasis added). With certain specified exceptions,
N.J.S.A. 43:21-30(b) explicitly bars the duplication of benefits
paid under the WCA:
No benefits shall be required or paid under this act for any period with respect to which benefits . . . are paid or payable on account of the disability of the covered individual under any workers' compensation law . . . .
5 A-3209-11T1 Thereafter, the legal issue that was typically raised was
which of the statutes applied to provide relief to the worker
who suffered a loss of wages due to involuntary unemployment.
See, e.g., Janovsky, supra, 11 N.J. at 3-5; see also Butler,
supra, 32 N.J. at 157. As the Court explained,
Where an employee is disabled by accident or illness he will generally be entitled to benefits under either the compensation law or the benefits law, but not under both. If liability under the compensation law is clear, payment will be made thereunder, and if absence of liability under that statute is clear, payment will be made under the benefits law.
[Janovsky, supra, 11 N.J. at 5 (emphasis added).]
A "twilight zone" was recognized for cases when "liability
under the compensation law [is] doubtful and dependent on the
outcome of contested proceedings." Ibid. In such cases, the
TDBL provides benefits "to help tide the worker over during his
inability to work . . . with full reimbursement from any award
subsequently rendered in the compensation proceeding." Ibid.;
N.J.S.A. 43:21-30(b)(1), (2).
The application of this nonduplication requirement is
straightforward in cases where the employee holds one job. See
Sperling v. Bd. of Review, 301 N.J. Super. 1, 5 (App. Div.
1997), aff’d, 156 N.J. 466 (1998). When an employee has only
6 A-3209-11T1 one job and suffers an injury "arising out of and in the course
of his employment," Janovsky, supra, 11 N.J. at 4, it is clear
the injury is compensable under the WCA and, therefore, any TDB
for the same injury would duplicate those benefits. It was
within that factual context that we held in Sperling that an
individual who obtains workers' compensation benefits by
settlement "may not obtain temporary disability benefits for the
same injury." Sperling, supra, 301 N.J. Super. at 5 (emphasis
added). However, the interplay between the two statutes
requires closer scrutiny when, as here, the employee has more
than one job.
In 1999, we decided Scott, which, we recognized, was unlike
cases such as Janovsky and Sperling that dealt "with the
traditional situation of a worker who has one job and is injured
in circumstances not covered, or clearly covered, by workers'
compensation." Scott, supra, 321 N.J. Super. at 65. In Scott,
the employee held both full-time employment, with Konica
Business Machines, and a part-time job, with Holiday Bowl. He
was injured "in the course of his employment" at his part-time
job. Id. at 62-63. He obtained workers' compensation for the
injury calculated solely on his earnings from Holiday Bowl.
Ibid. As a result, the compensation benefits he received were
less than he would have received if the accident occurred at
7 A-3209-11T1 Konica. Id. at 64. His application for TDB based on his
inability to work at his full-time employment was denied by a
private plan hearing officer. Id. at 63. On appeal, Konica
argued that no TDB should be paid because "such benefits are
payable only for injuries 'not compensable under the workers'
compensation law,' N.J.S.A. 43:21-29," and argued further that,
because Scott obtained workers' compensation from Holiday Bowl,
N.J.S.A. 43:21-29 and -30 prohibited the payment of any TDB to
him. Scott, supra, 321 N.J. Super. at 63-64.
We acknowledged that the argument had "some literal appeal"
but rejected the notion that the Legislature intended a blanket
prohibition against the payment of any TDB:
[W]e do not interpret those provisions to reflect a legislative intention to deny all temporary disability benefits to a disabled full-time worker, merely because he receives a workers' compensation award as a result of an accident "arising out and in the course of" unrelated part-time employment, when the workers' compensation benefits he receives are calculated solely on the basis of his earnings with that employer and are far less than would have been payable had the accident occurred on the full-time job.
[Id. at 64.]
Noting the remedial nature of the TDBL, N.J.S.A. 43:21-26,
we found
neither logical support nor empirical evidence that the Legislature intended to deprive a worker who pays deductions for
8 A-3209-11T1 temporary disability benefits from obtaining those benefits to compensate him for the loss of income at his full-time employment merely because his injury occurred at a second or part-time job taken to supplement that income.
[Id. at 65.]
We observed, "The employee should not be worse off because the
accident, not related to his full-time or prime employment and
therefore otherwise entitling him to temporary disability
benefits through that employer, happened to occur at an
unrelated part-time work site." Id. at 66.
We remanded the case to the Department of Labor for further
proceedings consistent with our opinion. Citing Justice Stein's
concurring opinion in Sperling v. Bd. of Review, 156 N.J. 466,
468 (1998), we directed the Department of Labor to examine
"whether the disability carrier should be entitled to a set-off
'to the extent of the' temporary workers' benefits obtained
through workers' compensation . . . or in some other amount" and
the manner in which such a set-off would be undertaken. Scott,
supra, 321 N.J. Super. at 66-67 (emphasis added). Significantly
for the purposes of this appeal, both employers in Scott were
"covered employers" under the TDBL, and we did not establish any
procedure to be followed regarding a set-off. Rather, we stated
the set-off argument "must be examined in light of our
conclusion that the statutory interplay itself must be examined
9 A-3209-11T1 separately with respect to each job." Id. at 66 (emphasis
added). And, we explicitly adopted the point emphasized by
Justice O'Hern in his separate opinion in Sperling:
It is quite obvious to even the most casual reader of its title that N.J.S.A. 43:21-30 intends to avoid double recovery, not full recovery. Although no specific offset provision exists, the purpose of the law demonstrates that recovery for temporary disability and workers' comp is not mutually exclusive. The title to N.J.S.A. 43:21-30 is "Nonduplication of benefits," not "Election of benefits."
[Sperling, supra, 156 N.J. at 473 (O'Hern, J., concurring and dissenting).]
Our opinion thus moved the interpretation of the
nonduplication provisions of the TDBL away from a literal
approach that would permit language designed to preclude "double
recovery" to unfairly limit a worker's benefits based upon
chance circumstances when a worker has more than one job. As we
emphasized, the interplay between the WCA and the TDBL "must be
examined separately with respect to each job." Scott, supra,
321 N.J. Super. at 66. As part of that examination, due
consideration should be given to the employee's payments for TDB
and the principle that it is only double recovery, not full
recovery, of benefits that is prohibited. Our decision prompted
both legislative and regulatory action.
10 A-3209-11T1 N.J.S.A. 43:21-30(b)(3) was intended to codify Scott by
establishing a set-off procedure:
If there has been a settlement of a workers' compensation claim pursuant to [N.J.S.A.] 34:15-20 in an amount less than that to which the claimant would otherwise be entitled as disability benefits under the [TDBL] for the same illness or injury, the claimant shall be entitled to disability benefits for the period of disability, reduced by the amount from the settlement received by the claimant under [N.J.S.A.] 34:15-20.
The Department of Labor promulgated N.J.A.C. 12:18-1.5 to
"conform[] the regulations to the Scott decision which addressed
the issue of the offset by the Division of Temporary Disability
Insurance of temporary workers' compensation benefits." 33
N.J.R. 3622(a) (Oct. 15, 2001).1
The Department's statement regarding the proposed rule
explained that it had been "rewritten to ensure that the
Division or the private plan retains the right of subrogation"
to all aspects of workers' compensation awards, as upheld in
Janovsky, supra, "thereby insuring the integrity of the
Temporary Disability Trust Fund . . . . Specifically, to permit
a claimant to keep disability benefits and temporary workers'
1 The Division of Temporary Disability's right of subrogation of duplicate workers' compensation benefits was previously established by N.J.S.A. 34:15-57.1.
11 A-3209-11T1 compensation benefits would result in a windfall not
contemplated by law." Ibid. (emphasis added). Addressing the
concern we raised in Scott, the Department stated the rule would
ensure that an employee who works more than one job, who is injured during the course of his or her duties with one of his or her employers, and who seeks to collect disability benefits, is not worse off merely because his or her injury or illness occurred at a second job taken to supplement his or her income. In other words, the proposed new rule seeks to ensure that injured workers in New Jersey receive all of the benefits to which they are entitled by law.
[Ibid. (emphasis added).]
N.J.A.C. 12:18-1.5 states,
(a) If a covered individual with more than one employer receives temporary workers' compensation benefits for an injury or illness incurred at one place of employment and that individual files a claim for New Jersey temporary disability benefits as a result of the same injury or illness on the basis of his or her employment with the other employer(s), those benefits are payable under the New Jersey State plan or an approved private plan provided that:
1. The claimant otherwise meets the eligibility criteria for temporary disability benefits in accordance with [the TDBL];
2. Wages from all covered employers are used to calculate the temporary disability insurance weekly benefit rate . . . ;
3. The temporary disability insurance weekly benefit rate is reduced by the
12 A-3209-11T1 temporary workers' compensation weekly benefit rate;
4. The claimant receives the temporary disability insurance benefits at the adjusted rate; and
5. Any such reduction in the temporary disability insurance weekly benefit rate shall also reduce the maximum total benefits payable during the period of disability.
II
We now turn to the facts of this case.
Appellant had two part-time jobs. At the time of her
injury, her major source of income was her part-time job with
Vinny's Pizza, where she earned $500 per week. She was also
employed, part-time, as a cafeteria worker by the Brick Township
Board of Education (BOE), earning approximately $215 per week.
She tore the rotator cuff on her right shoulder after picking up
a heavy tray at BOE and eventually required surgery. She was
unable to work for either employer for the period from January
20, 2009, through May 1, 2009.
The TDBL established an entitlement program funded out of
contributions paid by covered employers and employees, N.J.S.A.
43:21-46; N.J.S.A. 43:21-7(d)(1)(G); N.J.S.A. 43:21-7(e). Only
one of appellant's employers, Vinny's Pizza, was a "covered
employer" under the TDBL. N.J.S.A. 43:21-27(a)(1) defines a
"covered employer" as "any . . . employer subject to the
13 A-3209-11T1 'unemployment compensation law' . . . except the State, its
political subdivisions, and any instrumentality of the State
unless such governmental entity elects to become a covered
employer." Because BOE did not elect to participate in the TDB
program, it is not a "covered employer." It did not contribute
to the State Disability Benefits Fund and no contributions
toward the fund were taken from the wages appellant earned from
BOE.
Through her employment with Vinny's, appellant contributed
to the State Disability Benefits Fund as required by N.J.S.A.
43:21-46 and N.J.S.A. 43:21-7(d)(1)(G). Accordingly, when
appellant became unable to work due to her injury, she filed a
claim for TDB for the loss of her income from Vinny's Pizza in
January 2009.2 Following instructions given her by the
Division's customer service representative, appellant submitted
a claim form that stated she had not been injured during the
course of her employment at Vinny's. However, she also supplied
a certification from BOE, which stated her injury was work-
related and that a workers' compensation claim was anticipated.
N.J.S.A. 43:21-40 provides in pertinent part that the
amount of an individual's weekly TDB "shall be two-thirds of his
2 Appellant identified her employer as "Vinnie's Pizza" on her claim form. Since all pleadings refer to the employer as "Vinny's Pizza," we use that spelling.
14 A-3209-11T1 average weekly wage, subject to a maximum of 53% of the
Statewide average weekly remuneration paid to workers by
employers." The definition of "average weekly wage"3 contained
in N.J.S.A. 43:21-27(j) is explicitly linked to the amount of
3 As applied to appellant's claim for TDB, N.J.S.A. 43:21-27(j) provides, in pertinent part:
(1) "Average weekly wage" means the amount derived by dividing a covered individual's total wages earned from the individual's most recent covered employer during the base weeks . . . by the number of such base weeks.
(2) If the computation in paragraph (1) . . . yields a result which is less than the individual's average weekly earnings in employment with all covered employers during the base weeks . . . then the average weekly wage shall be computed on the basis of earnings from all covered employers during the base weeks . . . .
(3) For periods of disability commencing on or after July 1, 2009, if the computations in paragraphs (1) and (2) . . . both yield a result which is less than the individual's average weekly earnings in employment with all covered employers during the base weeks in the 26 calendar weeks immediately preceding the week in which the period of disability commenced, then the average weekly wage shall, upon a written request . . . be computed by the department on the basis of earnings from all covered employers of the individual during the base weeks in those 26 calendar weeks . . . .
[Emphasis added.]
15 A-3209-11T1 wages a "covered individual" earns from a "covered employer."
Similarly, the definition of "wages" to be used in interpreting
the TDBL is "all compensation payable by covered employers to
covered individuals for personal services . . . ." N.J.S.A.
43:21-27(h) (emphasis added).
Because BOE was not a "covered employer," only the wages
earned from Vinny's Pizza were used to calculate appellant's
weekly entitlement under the State Disability program.
Consistent with the weekly benefit rate authorized by N.J.S.A.
43:21-40, appellant received weekly TDB of $333 per week (minus
FICA), an amount equal to two-thirds of her average weekly wage
at Vinny's, for the period from January 20, 2009, to May 1,
2009.
In April 2009, appellant filed a claim petition with the
Division of Workers' Compensation for the injury she sustained
at BOE. Her claim for lost wages was based only on the gross
weekly wages she received from BOE, which she listed as $215.
BOE did not dispute her claim.
In September 2010, the Division of Temporary Disability
Insurance filed a Notice of Lien pursuant to N.J.A.C. 12:18-1.5
with the Division of Workers' Compensation in the amount of
$4,788.19 on the claim pending before the Division of Workers'
16 A-3209-11T1 Compensation. The amount of the lien represented the full
amount of TDB appellant had received.
That same month, appellant filed an appeal from the lien,
arguing she had not received a duplicate payment of benefits for
her injury. On April 5, 2011, the Division of Temporary
Disability reduced the lien to $2,848.23 to reflect the
difference between appellant's weekly benefit rate entitlement
to TDB and her weekly entitlement to TWCB. The net effect was
to reduce appellant's weekly TDB rate from $333, the equivalent
of two-thirds of her average weekly wage at Vinny's, to $135.
On March 31, 2011, an Order Approving Settlement was filed
in the Division of Workers' Compensation. Appellant and BOE
stipulated that appellant had "an admittedly compensable injury"
and agreed upon a 22 1/2% partial total permanent disability
award to appellant in the total amount of $23,271. The order
approving settlement listed her weekly wages as "$350
(reconstruct[)]" and the TWCB rate as "$198.00/$245.00." She
received $2,941.68 in TWCB. Appellant agreed to pay the revised
lien, reserving her right to appeal the assertion of the lien.
Appellant satisfied the lien before her appeal was
conducted telephonically by an Appeals Examiner in June 2011.
Testimony was taken from appellant and Robert Goyne, a
17 A-3209-11T1 supervisor in the Division of Temporary Disability Insurance's
claims intake section.
Goyne maintained that, pursuant to our decision in Scott,
and N.J.A.C. 12:18-1.5, a lien was required to reduce
appellant's TDB by the amount of workers' compensation paid.
According to Goyne, it was immaterial that BOE was not a covered
employer and that appellant's TDB was based solely upon her
wages from her only covered employer. He said that, "following
the Scott procedure," when there are two employers, one of whom
is paying workers' compensation benefits, "the [TDB] benefit
must be reduced by the amount of the workers' compensation if
the weekly benefit rate is higher." Goyne testified that the
lien of $2,848.23 represented the difference between the
benefits "exactly as the Scott procedure stated."
The Appeal Tribunal concluded that the lien was properly
imposed pursuant to N.J.A.C. 12:18-1.5, stating,
The evidence presented indicates that the claimant received Workers' Compensation benefits and State Plan Disability benefits for the same disability for the same period of time. In this case, the claimant's monetary entitlement to State Plan Disability benefits was based on her wages earned solely with [Vinny's Pizza] since her wages with [BOE] were not covered under the State Plan Disability Law in accordance with N.J.S.A. 43:21-27(a)(1). Her weekly benefit rate of $333.00 is therefore considered appropriate in accordance with N.J.A.C.
18 A-3209-11T1 12:18-1.5 since the calculation was based on wages earned from all covered employers.
. . . [T]he claimant's entitlement to an adjusted rate of $135.00 is also considered appropriate under N.J.A.C. 12:18-1.5 since she received Workers' Compensation benefits in the amount of $198.00 per week as a result of the same injury or illness. Therefore, the claimant is liable for refund in the amount of $2,848.23 for State Plan Disability benefits paid from 1/20/2009 through 5/01/2009.
Appellant timely filed an appeal from the decision of the
Appeal Tribunal to the Board of Review, which affirmed the
decision of the Appeal Tribunal.
III
Appellant advances several arguments to support her
contention that the lien was improperly asserted here. She
argues that, because she was not entitled to receive workers'
compensation benefits for her loss of income from Vinny's, the
Division of Temporary Disability Insurance could not properly
assert a lien on her TWCB for the TDB she received based upon
her wages from Vinny's. She argues further that her TDB weekly
benefit should not have been reduced by the TWCB she received
based on her wages from BOE because those wages were not
included in calculating her TDB rate.4
4 In addition, appellant argues that her receipt of TWCB did not disqualify her from receiving TDB for the income she lost from (continued)
19 A-3209-11T1 The Board counters that, pursuant to N.J.S.A. 43:21-30 and
N.J.A.C. 12:18-1.5, appellant was paid TDB she was not entitled
to receive. Because both TDB and TWCB were paid for "the same
injury," the Board argues it correctly determined that a
reduction of appellant's TDB was required and that she is liable
for a partial refund of benefits pursuant to N.J.S.A. 43:21-
55.1.
We recognize that our review of administrative agency
decisions is "limited." Brady v. Bd. of Review, 152 N.J. 197,
210 (1997). An appellate court will not upset the ultimate
determination of an agency unless shown "that it was arbitrary,
capricious or unreasonable, that it lacked fair support in the
evidence, or that it violated legislative policies expressed or
implicit in the act" governing the agency. Campbell v. Dep't of
Civil Serv., 39 N.J. 556, 562 (1963); see also Brady, supra, 152
N.J. at 210. However, the central issue in this appeal concerns
the interpretation of our decision in Scott and the statute and
regulation that were intended to codify and implement it,
N.J.S.A. 43:21-30(b)(3) and N.J.A.C. 12:18-1.5. While we
(continued) Vinny's. The Board does not contend that she was disqualified from receiving TDB, only that the right to subrogation applied to the TDB she received. Finally, she argues that the Division's right to subrogation is limited to TDB payable under the WCA, N.J.S.A. 34:15-12, and does not extend to permanency benefits. We need not address this issue.
20 A-3209-11T1 respect an agency's expertise, the interpretation of statutes
and caselaw is ultimately a judicial, rather than an
administrative, function. We are therefore not bound by the
agency's interpretation. Mayflower Sec. Co. v. Bureau of Sec.,
64 N.J. 85, 93 (1973); see also Shim v. Rutgers, 191 N.J. 374,
384 (2007). "Although judicial review of administrative actions
is limited, courts will intervene when 'an agency action is
clearly inconsistent with its statutory mission or other state
policy.'" N.J. Ass'n of Realtors v. N.J. Dep't of Envtl. Prot.,
367 N.J. Super. 154, 160 (App. Div. 2004) (quoting In re Musick,
143 N.J. 206, 216 (1996)).
As we have noted, the Department expressly stated that
N.J.A.C. 12:18-1.5 was proposed to conform the regulations to
our decision in Scott. In its statement, the Department said
that the subrogation procedure set forth in the regulation would
preserve the integrity of the Fund and insure a full recovery of
benefits by the worker while precluding a windfall to the worker
that was not contemplated by the Legislature. These objectives
are fully compatible with Scott.
However, in Scott, we also stated that, when the injured
worker has more than one employer, the interplay of the TDBL and
WCA must be viewed separately with respect to each job. And,
the worker should not be worse off, i.e., denied full recovery
21 A-3209-11T1 of benefits, because the injury occurred at one workplace rather
than another.
Viewing each job separately here, the injury occurred "in
the course of employment when" appellant was "engaged in the
direct performance of duties assigned or directed by" BOE.
N.J.S.A. 34:15-36. Therefore, her claim for lost wages under
the WCA was limited to the wages earned at BOE.
The loss of appellant's substantially higher wages from
Vinny's was "not compensable under the [WCA]," N.J.S.A. 43:21-
26, and fell within the very gap the TDBL was designed to fill.
The only remedy available to cushion her against the loss of
those wages was the TDB for which she was eligible pursuant to
N.J.S.A. 43:21-29(a).5 Deductions were taken from the wages she
earned at Vinny's for the Fund, and her "full recovery" of TDB
5 Curiously, the Board does not dispute appellant's eligibility for TDB under this statute, which provides:
In the case of the disability of a covered individual, disability shall be compensable . . . if the disability is the result of the covered individual suffering an accident or sickness not arising out of and in the course of the individual's employment or if so arising not compensable under the workers' compensation law, . . . and resulting in the individual's total inability to perform the duties of employment.
22 A-3209-11T1 was two-thirds of her wages from Vinny's, or $333 per week, in
accordance with N.J.S.A. 43:21-40.
The Board has failed to show that appellant's receipt of
the sum paid to compensate her for the wages she lost from
Vinny's was a "windfall" to appellant. Still, the Board
maintains that appellant's receipt of the full amount of TDB due
her based solely on her wages from Vinny's must be reduced
pursuant to N.J.S.A. 43:21-30(b)(3) and N.J.A.C. 12:18-1.5.
The authorities relied upon do not clearly support the
interpretation adopted by the Board, i.e., that the fact only
one of a worker's employers is a "covered employer" under the
TDBL has no impact on the Division's right to subrogation.
N.J.S.A. 43:21-30(b)(3) describes the worker's entitlement
to disability benefits and a subsequent reduction in benefits in
a specific scenario: when the workers' compensation claim has
been settled for less than the applicable TDB "for the same
illness or injury." Given the fact that this statute was
enacted in response to Scott, and its reference to the receipt
of both TDB and TWCB, it can be assumed that employment by
multiple employers was contemplated. Notably, Scott did not
concern a situation in which one employer was a "covered
employer" under the TDBL and the other was not and the statute
is silent on that point.
23 A-3209-11T1 On its face, N.J.A.C. 12:18-1.5 is similarly
undiscriminating on this issue. In the first instance, it
refers to
a covered individual with more than one employer [who] receives temporary workers' compensation benefits for an injury or illness incurred at one place of employment and . . . files a claim for New Jersey temporary disability benefits as a result of the same injury or illness on the basis of his or her employment with the other employer(s).
[N.J.A.C. 12:18-1.5(a) (emphasis added).]
The disparity between identifying the employee as a
"covered individual" and using the term "employer," rather than
"covered employer," suggests that the status of the employer as
"covered" or not, is immaterial to the application of the
subrogation provision. This is the interpretation applied by
the Board.
However, review of the definitions section for the TDBL
reveals that such an interpretation is erroneous. N.J.A.C.
12:18-1.1 states that "'Employer' means a covered employer as
defined in N.J.S.A. 43:21-27(a)." (Emphasis added). Therefore,
when the literal language of the subrogation provision is
altered to reflect the actual meaning of the words, the right to
24 A-3209-11T1 subrogation is clearly limited to circumstances where the
injured worker has more than one covered employer:6
(a) If a covered individual with more than one [covered] employer receives temporary workers' compensation benefits for an injury or illness incurred at one place of employment and that individual files a claim for New Jersey temporary disability benefits as a result of the same injury or illness on the basis of his or her employment with the other [covered] employer(s), those benefits are payable under the New Jersey State plan or an approved private plan provided that:
. . . .
2. Wages from all covered employers are used to calculate the temporary disability insurance weekly benefit rate . . . ;
3. The temporary disability insurance weekly benefit rate is reduced by the temporary workers' compensation weekly benefit rate;
4. The claimant receives the temporary disability insurance benefits at the adjusted rate; and
5. Any such reduction in the temporary disability insurance weekly benefit rate shall also reduce the maximum total benefits payable during the period of disability.
[N.J.A.C. 12:18-1.5]
In sum, we conclude that the Board's decision was based
upon an erroneous interpretation of N.J.S.A. 43:21-30(b)(3) and
6 This interpretation is consistent with the regulation regarding "Concurrent coverage," N.J.A.C. 12:18-3.5.
25 A-3209-11T1 N.J.A.C. 12:18-1.5 that undermined the policy underlying the
TDBL by denying appellant the full recovery of benefits due her
when there was neither a duplication of benefits nor a windfall
to her. We discern no legislative mandate to penalize
appellant's diligence in holding two jobs by reducing the TDB
she was entitled to receive from Vinny's. The Board's decision
was therefore arbitrary, capricious, and unreasonable, requiring
reversal. See Russo v. Bd. of Trs., Police and Firemen's Ret.
Sys., 206 N.J. 14, 33 (2011) (reversing an administrative
decision where the board's interpretation of a legal standard
was held to be "inaccurate, . . . contrary to the legislative
objectives that standard embodies, and . . . clearly erroneous
as a matter of law").
Reversed and remanded for further proceedings consistent
with this opinion. We do not retain jurisdiction.
26 A-3209-11T1