—Summary—
Since 1911, the New Jersey Workers’ Compensation law (N.J.S.A. 34:15-1 et seq.) has provided income and benefits to workers who become sick or injured on the job. This document provides general guidance to help businesses better understand the system in terms of benefits, insurance coverage, employer requirements, and controlling costs.
—Background—
All 50 states, the District of Columbia, and the U.S. territories have Workers’ Compensation laws. Workers’ compensation provides wage replacement, medical treatment, and survivor benefits in the event a worker experiences a job-related accident or illness. In return, with some exceptions, both the employer and the employee give up the right to sue for negligence.
In New Jersey, all employers must have Workers’ Compensation insurance. This includes corporations and limited liability companies (LLCs) as long as at least one individual (including corporate officers) is paid to perform services for the business. Although large employers can fund their own Workers’ Compensation and be self-insured, the most common way employers get Workers’ Compensation insurance is through a private insurance company.
In the event of a job-related accident or injury, the employer’s insurance carrier or the employer itself, if it is self-insured, will investigate the claim and make a determination as to an employee’s eligibility to receive Workers’ Compensation benefits. Workers who disagree with the determination can appeal to New Jersey’s Division of Workers’ Compensation. Depending on the nature and severity of a workplace injury or illness, New Jersey’s Workers’ Compensation system provides workers with lost wages, medical treatment, and death benefits (to workers’ families).
—Employee Benefits under Workers’ Compensation—
What types of benefits does Workers’ Compensation provide?
Depending on the nature and severity of a workplace injury or illness, New Jersey’s Workers’ Compensation system provides workers with lost wages, medical treatment, and death benefits (to workers’ families.)
- Lost Wages: If an injured worker is unable to perform their job due to a work-related injury or disease, but is expected to recover, they are entitled to temporary disability benefits, up to a maximum of 400 weeks (7 years, 9 months). These benefits are based on 70 percent of the injured
workers’ gross average weekly wage, including overtime, commissions, tips, bonuses, etc, subject to a maximum and minimum rate every year. In 2018, the minimum is $241 and the maximum is $903. The injured worker may also be entitled to permanent disability benefits if there is a permanent impairment that restricts a function of the body up to and including total permanent disability.
- Medical Treatment: The employer/insurance carrier has the right to direct the worker’s medical treatment. This means they can select the health care provider(s) to treat injured workers for work related injuries and must provide all necessary medical treatment including artificial limbs, teeth, glasses, and anything reasonable and medically necessary to help the worker. The only exceptions to using the employer’s physicians for treatment are if: there is an emergency; the employer refuses to provide medical treatment; or, the employer instructs the injured worker to choose the doctor.
- Death Benefits (also known as Survivor Benefits): If death results from a work-related incident or illness, the worker’s dependents are entitled to death benefits. Additionally, the worker’s medical and hospital expenses and burial are paid.
Are all workplace accidents and injuries automatically eligible for Workers’ Compensation?
Most workplace accidents or injuries will be eligible for Workers’ Compensation. There are only a few circumstances that would make an employee who gets sick or injured on the job ineligible. These include self-inflicted and intentional injuries; injuries sustained while attempting to injure another employee; intoxication; and, deliberate violations of safety rules.
If an employee is injured on the way to work, are they eligible for Workers’ Compensation?
Generally, routine travel to and from work is not covered under Workers’ Compensation. In determining if an accident or injury is covered under Workers’ Compensation, a worker’s employment usually begins when they arrive at the place of business (which includes parking lots the employer owns and operates), and ends when they leave for the day. That said, there are some exceptions. If an accident, injury, or illness happens between two offices or job sites, it is usually covered. The same generally applies if a worker is directed to run a special errand on official business for the employer like picking up equipment or mailing something. (An errand like the worker picking up lunch for the office is typically not covered since it’s not official business.) Last, certain jobs that require that workers continuously travel – delivery personnel, truck drivers, repairman, salespeople, and claim representatives – are usually covered by Workers’ Compensation while the worker is completing their regularly assigned duties.
How long must a worker be unable to work to qualify for workers’ compensation?
In New Jersey, there is a seven day waiting period, during which time the worker must be unable to work. The waiting period begins the first day the injured worker is unable to continue to work due to the work related incident or exposure. It includes weekends and holidays, regardless of whether the injured worker is scheduled to work. Once an employee is absent from work due to injury for seven days, payments are retroactive to day one.
Although the insurance carrier/employer can direct an employee’s medical treatment, is it still possible for them to be treated by their own physician?
If an employer/insurance carrier directs the employee to use a specific doctor or medical facility, but the injured worker goes instead to their own physician, the employee assumes all financial responsibility even if the employee’s insurance plan exceeds the treatment.
How long does Workers’ Compensation last?
An injured worker can receive temporary disability benefits until they return to work, are released able to return to work by the treating physician, or, have reached what is known as the maximum medical improvement (MMI). Maximum medical improvement means it’s unlikely that the condition will be improved any further, or, that a plateau in the healing process has been reached. That said, temporary disability benefits cannot extend beyond 400 weeks.
—Obtaining Workers’ Compensation Coverage—
Are all employers eligible to purchase coverage through private insurers?
No. This could be because the company is a new business with no safety record, has a high number of accidents or injuries, or, is in a very risky business or industry. These companies are placed in a state pool created by New Jersey’s Compensation Rating & Inspection Bureau (CRIB) and assigned to private insurance companies. The private insurance company must provide coverage for at least one year for the employer who is placed in a high risk category.
How are premium rates calculated?
Premiums for workers’ compensation insurance are calculated by the formula below.
Classification Rate X Payroll (per $100) X Experience Modifier = Premium
- Classification – Businesses are separated into groups according to the type of work they do. The classification system identifies which type of work presents more risk to the employees performing these tasks. (For instance, workers compensation costs will be more for longshoremen than office workers.) For each classification of employee, the business owner must pay a certain amount for workers’ compensation based on every $100 in payroll. The rate is applicable to the total policy payroll.
- Payroll – As discussed above, for each $100 dollars of an employer’s payroll, there is a specific rate, which is determined by the employer’s classification codes.
- Experience Rating – The employer’s experience modifier – typically referred to as the MOD – is a numeric representation of the company’s claim experience. Employers with less severe accidents than others will pay less in workers’ compensation. Generally speaking, an employer’s lookback in determining the experience rating should only be about five years.
What can employers do to control rising premium costs?
Since the premium employers pay is based largely on their experience with claims, one of the most effective ways to control costs is through a management commitment to safety that includes employee training and voluntary safety inspections and audits. In the event of an accident, employers should work with their insurance carriers to direct medical treatment and conduct a thorough investigation to avoid future incidents. In addition, to reduce the length of a claim, many insurance carriers will encourage employers to offer temporary alternative duty assignments wherever possible so that the employee can return to work quicker than they would have if they had the same job duties prior to the incident.
—Employer Responsibilities—
What types of notices do employers have to provide about Workers’ Compensation?
New Jersey law requires every employer to post a notice about the availability of Workers’ Compensation in a public place. The notice must include the name of the insurance carrier and other items as required by the New Jersey Department of Banking and Insurance. To obtain copies of this notice, employers should contact their insurer.
Do employers have to hold the jobs of workers who are out on Workers’ Compensation?
In and of itself, New Jersey’s Workers’ Compensation law, N.J.S.A. 34:15-39.1, only prohibits the firing an employee in retaliation for filing a Workers’ Compensation claim or for testifying at a Workers’ Compensation hearing. That said, other laws that provide job protection may run concurrently, or at the same time, as Workers’ Compensation. These may include, but are not limited to, the federal Family and Medical Leave Act (FMLA), which provides 12 weeks of job protection. (See NJBIA’s Fast Facts on Family Medical Leave for more information.)
What is the threshold for an employer reporting an injury? For instance, if an employer is made aware of an injury, but thinks the worker will recover on his own, should that still be reported?
All workplace accidents, injuries, and illnesses arising from the job should be reported as soon as possible. After an incident is reported, an employer’s worker’s compensation carrier will contact the injured worker and the employer to determine if a claim is compensable. If the claim is accepted, the carrier will direct the worker to a medical provider to decide if the incident is in fact a Workers’ Compensation claim. If the time out of work extends beyond seven days, they will also provide the injured worker with temporary disability benefits while they recover.
Do employers have to provide light duty to workers who want to return, even if none is readily available?
In New Jersey, employers are not required by law to offer light duty. However, if it is offered, and the employee’s doctor clears the employee to do the work, they must return to work or risk losing their benefits or termination. From the employer’s standpoint, offering light duty may mean providing the worker with a reasonable accommodation for a disability. For instance, accommodating a lifting restriction by assigning that particular job function to another worker.
If no light duty is available, the worker will simply continue to receive disability benefits until they reach maximum medical improvement (discussed above) or reach 400 weeks.
Do employers have to continue to provide health insurance while a worker is out on Workers’ Compensation?
There is nothing in the New Jersey Workers’ Compensation law that prevents an employer from discontinuing an employee’s health benefits coverage while they are unable to work as a result of a job related injury. However, some protections are available under the Federal Family Medical Leave Act (FMLA) which may run concurrently, or at the same time, as Workers’ Compensation.
What are the penalties for not participating in Workers’ Compensation?
The penalties for not participating in Workers’ Compensation can be severe (even without a work-related injury) and can include criminal charges and fines of up to $5,000 for the first 10 days and up to $5,000 for each additional 10-day period where there is no insurance. In the case of a corporation, liability for failure to insure can extend to the corporate officers individually.
While most employers don’t consciously ignore the requirements, issues can arise when employers use contractors, or freelancers, or consultants (also known as independent contractors). Generally speaking, if someone is a true independent contractor, they are not eligible for workers’ compensation. The problem arises when someone has been misclassified, that is, their relationship with an employer is really that of an employee rather than a contractor with a portfolio of other clients who is free to come and go. There are a series of tests state and federal authorities use to determine whether someone is an employee or an independent contractor. (See NJBIA’s Fast Facts on Worker Misclassification and Independent Contractors for more information.) Worker misclassification may be brought to light as a result of state or federal audits for unrelated reasons, or, because a worker gets injured on the job.
—Other Resources—
An Employer’s Guide to Workers’ Compensation in New Jersey:
https://www.nj.gov/labor/forms_pdfs/wc/pdf/WC-373.pdf
New Jersey Compensation Rating & Inspection Bureau
—For more information—
If you need additional information, please contact NJBIA’s Member Action Center at 1-800-499-4419, ext. 3 or member411@njbia.org.
This information should not be construed as constituting specific legal advice. It is intended to provide general information about this subject and general compliance strategies. For specific legal advice, NJBIA strongly recommends members consult with their attorney.
25 responses to “Understanding New Jersey’s Workers’ Compensation System”
Leave a Reply
This site uses Akismet to reduce spam. Learn how your comment data is processed.
Hello. I like to know in plain English. In words I can understand regarding the over payment of temp by the insured. Insurance adjuster paired me but I didn’t know I was to be paid. Now they want me to give them back $7000.00 that I don’t have.
Someone told me to look at the statute 34:15-57.1. But being stupid I don’t exactly know what it pertains to.
Do I have to work the rest of my life to pay them back or in WC should they absorb the mistake. Thanks so much for your help.
I know your comment is over a year old, and your situation has most likely been resolved since, but in case someone else in a similar situation in the future sees this:
The comp carrier made what is referred to as a “gratuitous payment” to you. In NJ, the carrier/employer will be hard-pressed to get that back if fraud on your part is not the factor.
Basically, if the over-payment is not your fault via fraud, you PROBABLY aren’t compelled to pay it back unless the carrier/employer files in court if your claim is being/will be litigated.
Having worked in comp, I can say that there have been a few who received over-payments and returned the money.
If you were out of work for eight or more days, you are owed what is called TTD (total temporary disability) benefits which replaces your lost wages. In NJ, you are paid at 70% of your average weekly wages. You were probably out of work for eight or more days, though I am unsure as to what policies for the carrier/employer are in place that it seems that literally no one would have informed you that you were owed.
Hi , i am very close to a final settlement on my workmans comp case. However my attorney has yet to tell me the figures. This case is 4 yrs old now. Started with a minicus tear and then on to knee replacement, im trying to figure what is a fare settlement . if i don’t agree with the figure that my attorney says they offered do i have to accept it ? I have retired due to this injury and can no longer work in that field. Could you give me a ballpark figure what would be fair. Thank you.
Hi there, My left arm and wrist got injured at work I’ve only been for 3mths and I’m also new in the state of New Jersey. I really don’t know what to do… I need some good advice please!!!!
Can my husband collect w/c benefits simultaneously for 2 separate injuries and while on w/c, my husband took a buyout from his employer because his body can’t continue with the job.
About 3 years ago I got hurt on the job I used to work for waste management at the time of my injury my supervisor had went home and the manager lied on the report saying I felt to report the accident they don’t even paid my doctor bills
I replied via email.
I replied via email.
Three yers ago I servely injured my lower leg. My attorney tells me it’s classified as a foot injury and I will receive less money. What can be done to change the legal terms of body parts?
Responded via email.
I was ‘mandated’ by my boss to go out to a client’s site during a bad snow storm…the client didn’t shovel or blow and I went down. I reported it to my boss & they started a worker’s comp claim, 2 weeks later I was fired…the company said it was ‘poor performance’, yet all my reviews were above expectations, ready for promotion and outstanding…it was a virtual position and once fired, put out on worker’s comp, but they wouldn’t pay…they told unemployment they paid me severance and I resigned…what can I do, since they didn’t pay me worker’s comp, couldn’t accept another job for 4-5 months and had to fight to even get unemployment insurance and now getting harassed to pay those medical bills?
We had an employee who needed a ride across the road to go to our urgent care facility for treatment of a work related injury. An employee in our HR department who I work with decided that she would go pick him up from the urgent care facility. Outside of this being the “nice thing to do” is this best practice to put another employee at risk of a potential other injury? I do not agree with this practice as one could argue what if there was an accident after you picked up this employee? Please advise on how you would address this issue.
As an employer in New Jersey, can I supplement the benefit an employee receives from workers comp with paid time off? So that the employee received 100% of their weekly wage?
You probably can. Standard, though, is that it’s usually either one of the other: either salary continuance or the TTD rate (although some public schools give full salary continuance for a year and then switch to TTD checks.)
NJ statutes only outline that 70% of the twenty-six weeks prior to the date of injury are to be paid in TTD benefits. NJ does not provide partial lost time benefits (e.g., comp doctor said to work only four hours when normal shifts are eight, etc.)
Nothing in the NJ statutes compels the employer to pay the difference of lost wages, only the bare-minimum TTD rate (subject to the maximum and minimum rates of that year the injury occurred).
I would consult your workers’ comp attorney (not your labor attorney) on this matter. This may also depend on the sector your company is in (e.g., private or public, nursing home, construction company, etc.).
Does an employer have to pay WC premiums on the overtime portion of the payroll, or a shift differential for 2nd/3rd shift?
I have a workers comp attorney for acase in 2008. The attorney says the case is “still open and being worked on.” My last day at work was 9/6/2008. I received temp disability from NJ for a short period of time. I went for all the medical exams their insurance company sentme for. I’m living in FL now as I could not financially stay in NY or NJ. My lawyer gives me no details and just says the case is still in the works. It is almost 11 years. Who else can help me with this. This was in Bergen County.
My husband has S-corp. We would like to switch to LLC, to save money. He is president, 100% shares, I am listed as secretary, 0%. Construction company, no employees. He has been getting a w2 each year for $20k from his S-corp, to cover social security. He turns 65 next month, he has plenty of credit to qualify for social security, but won’t collect til older. I have stopped paying him “wages” the past three quarters…we just can’t come up with the quarterly taxes.
Question: If the S-corp or LLC does NOT pay W2 wages to him, do we still need to pay for Workmans Comp Insurance? Thank you very much.
as a S-Corp, he is still an employee as you are an employees as well and you would still need to maintain worker comp coverage. you may be required to have a minimum payroll and you will be classified under clerical with has a very low rate.
As a LLC, He is excluded but can request to be elected to the policy. however, the policy would still need to maintained as you would be considered an employee.
If you decide to switch to an LLC, it would save you on the workers comp but so long as there is an employee, it would need to be maintained to avoid getting fined by the state.
Its been 8 month since I’ve been on workmans comp and I havent received any payment. I got struck inside of a container and the forklift was carrying 3,500 on a pallet the forklift had NO BRAKES and it struck me .i got my mri and it stated my ankel was badly damaged. Now im waiting for there doctor review. How long do i wait to be recompense for my back pay and do i wait for sugery
My claim is court ordered and still being defrauded..im n. Need of serous med treatment..cant stop it ..
Can a employer demote you from a position that you had previously held prior to your work place injury, upon your return to work?
I receive worker compensation full maximum. In the state of New Jersey I was giving $70,000 400 weeks. I was told. In New Jersey. You don’t pay back. Is that correct. I sue. The. Place were I got injured. The contractor. I was award money. My. Lawyers. Took over $100,000 to pay back workers compensation. Did my lawyer rob me. Or. Do I have too pay back what worker compensation gave me Please. Enlightenment me. On this. Jorge Pagan
In NJ does the company or the insurance company,when you go back to work on lite duty and you go to therapy during working hours have to pay you for that time while you are at therapy.
I was injured on the job and became disabled as a result of my injuries. I recently asked for a copy of the Workers Compensation policy because quite frankly I don’t trust anything they have told me. They have been under paying my weekly wage since my benefits began in 2011. This has been $158 short per week. All the screaming and yelling I’ve done no one will listen to me. I would like to see if anything, what benefits they have decided not pay me. Can someone please tell me if I have a legal right to a copy of the policy or how I can obtain a copy on my own? Thanks in advance. Believe me when I say this isn’t even close to the other things the Carrier has done and the way they have treated me. 15 surgeries later and they still talk to me as I’m overstating my injuries.
Thanks for highlighting this topic. I have found it while looking for attorney in California. This was a great read. Keep up the good work.