Workers’ Compensation Insurance in NJ
All New Jersey Businesses must carry Worker's Compensation Insurance.
140,000
Worker’s Comp
Claims per Year in NJ
Unless covered by a federal program, all New Jersey businesses must carry Workers’ Compensation Insurance. Every year there are over 140,000 injury claims in NJ alone. Unlike other states, this number also includes undocumented workers and any other unlawfully employed workers such as minors.
Coverage for Contractors
An independent contractor might not be covered by a hiring company’s insurance policy. If you are a contractor, you may need to provide proof of your own Workers’ Compensation Insurance in NJ.
Keep in mind that the New Jersey Workers’ Compensation Act applies a liberal interpretation of the term “employee.” In New Jersey, this may actually be broader than other state or Federal definitions.
If you’re not sure about a workers classification, here are some tips to help determine whether a worker is classified as an employee or independent contractor.
Small Businesses
Corporate officers must be covered, but members of an LLC or its partners do not have to be covered.
A principal owner of a sole proprietorship also is not required to be covered.
Coverage in New Jersey
Since NJ has a high amount of Workers’ Compensation claims, the state has one of the highest compensation rates in the country. This makes Workers’ Compensation insurance higher than average, though no less important.
Past claims and payroll load will impact premiums. Small business owners should contact us for the best prices and exact amount of Workers’ Compensation insurance required.
Benefits of Workers’ Comp
Workers’ Compensation Coverage offers advantages to both employers and employees.
For employees, it provides:
- Financial assistance for reasonable medical services necessary for treatment.
- Short term disability benefits to replace lost wages.
- Permanent disability benefits for long-term injuries or illness.
- Death benefits, including burial expenses, if the employee dies as a result of an on-the-job injury.
For employers in NJ, it typically covers:
- Financial liability.
- The cost of legal representation.
In Case of Death
Workers’ Compensation benefits can be awarded to a surviving spouse and dependent children if an employee dies after a work injury or illness. Children are dependents until age 18, or until age 23 if they are full-time students. There could be additional benefits provided to a dependent child who is physically or mentally disabled.
If the surviving spouse remarries, he or she would no longer be eligible to receive benefits, unless there are surviving children who still require support. In that case, benefits could continue for up to two years. A civil union partner could also qualify to receive death benefits, and parents and siblings of the deceased are eligible if they can prove dependency.
Workers’ Compensation in NJ death benefits include:
- Approved medical bills.
- Up to $3,500 for funeral or burial expenses.
- 50 percent of the deceased employee’s wages to one dependent.
- That amount increases by 5 percent for each additional dependent, up to a maximum of 70 percent of the worker’s wages.
- Up to 450 weeks of payments to the surviving spouse. There is a maximum set each year by the Commission of Labor.
- Up to 450 weeks of payments to mentally or physically disabled children.
Penalties for Not Having Workers’ Comp Insurance
The State of New Jersey Department of Labor and Workforce Development regulates and enforces Workers’ Compensation. If a company fails to carry appropriate Workers’ Comp Insurance for a business, the result can be penalties that range from administrative fines to criminal charges as severe as fourth-degree felonies.
The financial penalties are up to $5,000 for the first 20 days of noncompliance and up to $5,000 for each 10-day period thereafter. These penalties are delivered in the form of liens against the employer, and prosecution is through the seizure of property.
