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S676CV

S676CV

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Published by: Governor Chris Christie on Jan 09, 2012
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01/09/2012

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January 9, 2012SENATE BILL NO. 676To the Senate:Pursuant to Article V, Section I, Paragraph 14 of the NewJersey Constitution, I am returning Senate Bill No. 676 with myrecommendations for reconsideration.This bill would increase the amount of workers'compensation paid for certain hand and foot injuries.Specifically, the legislation provides that for certain handinjuries, the award of workers’ compensation shall becalculated based on a maximum of 300 weeks of compensation, asopposed to the current 245 weeks. In addition, the legislationprovides that for certain foot injuries, the award of workers’compensation shall be calculated based on a maximum of 275weeks of compensation, as opposed to the current 230 weeks.Since assuming the Office of the Governor in 2010, one ofmy principal objectives has been to improve the business climatein our State. For too long, New Jersey businesses have sufferedunder the weight of a heavy tax burden and a punitive regulatoryscheme that only stifles economic growth. Under myAdministration, the business climate in New Jersey has begun toimprove, however there is still much work to be done.Unfortunately, while well-intended, this legislation is counter-productive to the strides that we have made so far and will onlyserve to increase the cost of doing business in New Jersey.Specifically, this bill will have an adverse impact uponthe business climate in our State by increasing workers’compensation costs for employers. The Compensation Rating andInspection Bureau estimates the bill’s mandated increases forcertain hand and foot injuries would result in insurance premiumrate increases of approximately 0.8% -- a $17 million increasein premiums paid by all businesses in the State. Moreover, the
 
 
2market for workers’ compensation insurance in New Jersey hasbeen volatile in recent years due to increased health carecosts. For instance, rates were increased by nearly 4% in 2011and an additional 7% increase is expected in 2012. Thesefluctuations have added to an already challenging environmentfor New Jersey’s business community, and this legislation wouldonly serve to exacerbate these difficulties.In addition, the bill’s piecemeal approach to revising theState’s workers’ compensation benefits payment schedule is ill-considered. The current schedule was developed through acomprehensive analysis of workers’ compensation claims andcosts, and successfully balances the interests of both employersand employees. Also, by linking benefits to the statewideaverage weekly wage, the system is already designed to providefor automatic adjustments in benefit levels to ensure thatbenefit amounts reflect current economic conditions. In fact,over the last 30 years, benefit levels have increasedautomatically each year, with the exception of one. Thus,revising the compensation schedule by significantly increasingcompensation levels for two specific injuries withoutcomprehensively analyzing all of the other components of thesystem is imprudent and may create an imbalance.Based upon the foregoing, I cannot approve thislegislation in its present form. Instead, I recommend revisingthe bill to eliminate the compensation increases and to requirethe Commissioner of Labor and Workforce Development work incooperation with the Commissioner of Banking and Insurance toperiodically study the State’s workers’ compensation system andto make recommendations for ways in which the system can beimproved for both employers and employees. In doing so, we canensure that any inequities or inefficiencies in the workers’
 
 
3compensation system are identified and addressed and the systemwill continue to best serve the needs of both businesses andworkers.Accordingly, I herewith return Senate Bill No. 676 andrecommend that it be amended as follows:Page 2, Title, Lines 1: Delete “increasing: andinsert “concerning”Page 2, Title, Line 1: Delete “for loss of hand orfoot”Page 2, Title, Line 2: Delete “R.S.34:15-12” andinsert “P.L.1948, c.446”Page 2, Section 1, Lines 7-45: Delete in their entirety.Page 2, Section 1, Line 7: Insert “1. Section 3 ofP.L.1948, c.446 (C.34:1A-3)is amended to read asfollows:3. The commissioner, ashead of the departmentshall: (a) Administer thework of the department;(b) Appoint and removeofficers and otherpersonnel employed withinthe department, subject tothe provisions of Title 11of the Revised Statutes,Civil Service, and otherapplicable statutes, exceptas herein otherwisespecifically provided;(c) Perform, exercise anddischarge the functions,powers and duties of thedepartment through suchdivisions as may beestablished by this act orotherwise by law;(d) Organize the work ofthe department in suchdivisions, not inconsistentwith the provisions of thisact and in such bureaus andother organizational unitsas he may determine to benecessary for efficient andeffective operation;(e) Adopt, issue andpromulgate, in the name ofthe department, such rulesand regulations as may beauthorized by law;(f) Formulate and adoptrules and regulations forthe efficient conduct of

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