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Using Voluntary Tenders (Advance Payments) To Reduce Exposure in New Jersey.

When an employer knows (with certainty) that an employee has been injured and will suffer some degree of permanent injury (for example, when there has been loss of a limb), a voluntary tender, made at the appropriate time, may be offered to reduce exposure for attorney’s fees when the underlying claim is disposed of. N.J.S.A. 34:15-64 provides (in part):

When, however, at a reasonable time, prior to any hearing compensation has been offered and the amount then due has been tendered in good faith or paid within 26 weeks from the date of the notification to the employer of an accident or an occupational disease or the employee’s final active medical treatment or within 26 weeks after the employee’s return to work whichever is later or within 26 weeks after employer’s notification of the employee’s death, the reasonable allowance for attorney fee shall be based upon only that part of the judgment or award in excess of the amount of compensation, theretofore offered, tendered in good faith or paid.

Read on to discover how to use this legal tool to reduce exposure on New Jersey Workers’ Compensation claims.

On February 2, 2005, the Appellate Division affirmed the decision of the Workers’ Compensation Judge to deny the employer the benefit of a reduced contribution to the petitioner attorney’s fee award because the employer’s voluntary tender of disability benefits was untimely when it occurred slightly beyond the twenty-six week period allowed by statute. In reviewing the statutory history of N.J.S.A. 34:15-64 and viewing that statute in pari materia with N.J.S.A. 34:15-16, the Appellate Division concluded that when the NJ Legislature amended this statute in 1979, it intended to create a “bright line” timeframe and set a clear and certain deadline an employer must meet to reduce its contribution to an attorney fee award by invoking the “26-week rule.” See Gorman v. Waters & Bugbee, Inc., 374 N.J. Super. 513 (App. Div. 2005).

When issuing a voluntary tender in a workers’ compensation case, be sure to send a covering letter stating that the compensation is being offered “without prejudice.” The Court of Appeals repeated the fact that no such correspondence asserting that the payments were being made “without prejudice” was ever issued in finding that the widow was due dependency benefits.

In a recent case, the payment of a voluntary tender was relied upon by the Judge of Compensation to reduce petitioner’s attorney’s fees to only $50! The Appellate Court, reviewing this, re-iterated the rule that a tender must strictly follow the rules. The Appellate Judges said the tender must be:

  • an unconditional and unqualified offer to pay compensation;
  • express terms that leave no room for misunderstanding; and
  • the offer must be made within a reasonable time after notice of the injury and extent of disability, prior to any hearing and prior to the expiration of the twenty-six week period allowed in statute.

See Alvarado v. J & J Snack Foods, 397 N.J. Super. 418 (App. Div. 2008).

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For more than 20 years we have represented insurance carriers, self-insured employers, third party claim administrators, and employers before New Jersey’s Division of Workers’ Compensation. Our founding partner, Gregory Lois, is co-author of the LexisNexis “Practice Guide to Workers’ Compensation in New Jersey” (2017, ISBN:9781632838735) and served as Law Clerk to Hon. Joan Mott, Administrative Supervisor of Workers Compensation.

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