On behalf of our member companies that make NJBIA the largest, most impactful association representing New Jersey businesses, I write to you in opposition to Assembly Bill No. 3986 (Verrelli) which would increase the fees paid by employers and employees to petitioners’ attorneys in workers’ compensation cases. This increase in attorneys’ fees will significantly raise workers’ compensation cost for employers, including small businesses, and even chip away at awards for injured workers. As the Legislature continues its focus on making New Jersey a more affordable and attractive place to live, work and run a business, this legislation runs counter to those goals.
This legislation increases the current cap on fee awards from 20% to 25% of the underlying recovery. When paying attorneys’ fees, employers typically end up covering 60% of this cost and the other 40% is paid by injured workers through a deduction in their final settlement. Settlement awards, and thus attorney fees, have steadily increased each year based on changes in the State Average Weekly Wage (“SAWW”). Over the last decade, the SAWW has increased more than 28%, providing a direct increase in fees paid to attorneys based on those amounts. Absent evidence demonstrating that increased fee awards are necessary to attract competent counsel to workers’ compensation cases, NJBIA does not believe there is a need to arbitrarily increase attorneys’ fee awards at the expense of employers and injured workers.
This legislation combined with a bill that recently moved through the Legislature to increase physician fees in workers’ compensation cases will serve as a one-two punch to employer and employee workers’ compensation costs in New Jersey. We urge the Legislature to proceed with caution and take into consideration the collective impact bills like these will have on our business climate.
For these reasons, we respectfully ask you to vote NO on A-3986. Thank you for taking our concerns into consideration. If you have any questions or would like to further discuss, please contact me at efrank@njbia.org.
