On Thursday, the Senate Labor Committee favorably reported S-2822 out of committee. The bill revises the workers’ compensation law to increase the attorney fee cap from 20% to 25%.
The League testified in opposition to this legislation as it will increase insurance costs to municipalities. While it allows judicial discretion in setting the fee rate, testimony from both the JIF and the Insurance Council of New Jersey noted that more than two-thirds of current attorneys’ fees are at the current maximum cap of 20% and a majority of the remainder are near the maximum. Raising the cap from 20% to 25% will significantly increase insurance premium costs to municipalities. New Jersey has the highest Workers’ Compensation costs in the nation; and for the second year in a row, the Division of Local Government Services has utilized its administrative authority to exclude this cost from the 2% cap.
The Assembly counterpart, A-3986, has been referred to the Assembly Labor Committee and has not been scheduled for consideration yet.
This legislation is similar to S-4059 which was considered in committees in both chambers during the lame-duck time in the last legislative session. It did not advance due to a large coalition of local government, insurance, and business organizations that highlighted the cost increases, which are ultimately borne by the property taxpayers. While the current bill is less onerous, we still oppose it and we encourage you to reach out to your legislators and urge them to oppose this legislation.
Contact: Paul Penna, Senior Legislative Analyst, ppenna@njlm.org, 609-695-3481, x110.