a male with a broken left hand filling out a work injury form

Workers’ Compensation Insurance in NJ: Who Needs it & Why

Workers’ compensation laws in NJ are designed to provide injured employees with a fixed monetary return.

Insurance coverage applied within this legal framework helps reduce the necessity for lawsuits following an injury, and also affords the employee easier access to necessary compensation.

This allows them to gain adequate medical treatment, wage replacement, or easier access to full-time disability compensation as is appropriate.

Workers’ compensation also covers illnesses sourced from work-related tasks, as well as funneling compensation to the dependants of an employee in the event of their untimely death.

These laws are designed to ensure fair monetary compensation that also protects both employee and employer in its processing.

Each state will have its own particular laws surrounding workers’ compensation in New Jersey and what insurances are required for its practical use.

However, thanks to how important these protections, your state will require employers to invest in this coverage by law.

If your insurance is pursuant to state law, you can avoid the high financial penalties (via litigation and fines) that would otherwise take place.

In New Jersey, workers’ compensation can be provided by Schumacher Insurance Agency.

How Does This Specifically Translate To New Jersey Law?

In New Jersey, workers’ comp insurance is legally required for any business with one or more employees. This includes part-time and temporary employees that accept salaries or wages and thus pay tax contributions.

However, subcontractors, volunteers, or interns are not included in this. Furthermore, self-employed workers without employees do not have to invest in workers’ comp insurance.

An injured employee will be entitled to their financial compensation regardless of who was at fault in the injury. Again, this helps lessen the necessity of lawsuits, while also protecting against them.

In 1911, the State of New Jersey made coverage mandatory for all employees of this nature.

It is the responsibility of the employer to find and apply for correct coverage. This is not always the case if they are already protected by federal programs.

In 1979, reforms were implemented, this time improving benefits for those severely disabled while also reducing disability benefits for those temporarily injured or expected to make a full recovery.

The standardized compensation sums were also altered to cater to the rising cost of living expenses for disabled individuals.

DWC, the Division of Workers’ Compensation, are responsible for the administration of New Jersey Worker’s Compensation Law (N.J.S.A. 34:15-1).

In New Jersey Law, the requirements include that workers’ comp applies if the employee’s injury occurs while they were performing a work task, if the severity of the injury required fuller attendance than basic first aid, and if they have been earning a tax-deductible income, as stated above.

Which Types Of Businesses Should Have It?

Every business that holds employees as part of their operational framework must invest in workers’ compensation insurance in NJ.

The only possible exemptions include the examples we have listed above, such as unpaid interns, unpaid volunteers etc.

How Is It Workers’ Compensation Calculated?

In New Jersey, workers’ compensation is calculated via a specific method. Note that the statute of limitations, in this case, will be two years.

Also, note that this benefit is usually only applied if you are unable to work for at least seven non-consecutive days under your temporary disability. For permanent disability, there are no waiting limits whatsoever.

Sometimes, calculations can vary depending on if your employee worked full time, five days a week or if they were under seasonal terms. Generally, New Jersey calculations apply via the following method:

  • 70% of average weekly wages are awarded for those suffering a temporary or total disability. The minimum possible rates are $216 up to $810.
  • Depending on the seriousness and category of your permanent partial disability, this could alternate to a minimum of $35 or a maximum of $810.

Furthermore, workers’ compensation class codes (click here for further information relating to New Jersey,) can be used by insurers to assess how much risk your company processes hold.

This helps them better tailor your package for your necessary needs, while still providing you with full and correct insurance.

What To Do In The Event Of Workplace Injury

It’s important for employers to not only cover themselves and their employees, but also that they know how to act in the face of a workplace injury.

While we must always chase the golden figure of zero workplace injuries each year through our systemic adjustments and safety training, unfortunately, somewhere, they will be inevitable.

It’s crucial to follow the best practical process for reporting your case after you have arranged essential medical care for said employee.

Under New Jersey Law, the employer or insurance carrier can select the physician(s) required to treat injured workers for said work-related injuries.

After an accident has been reported to a member of management, they should immediately notify their insurance carrier. This will then generate a First Report of Injury which will become filed with State apparatus.

From there, the insurance carrier will inspect and evaluate the claim to find its suitability under New Jersey workers’ compensation law.

If said measures are within the correct legal protections as demonstrated above, the claim is then moved to the third stage.

This involves the insurance carrier contacting all parties involved, including the injured worker, the employer and medical provider – the latter being the authority when determining the extent and classification of injury or disability.

If the claim is fully verified at this point, the insurance carrier will be directed to an approved and authorized medical provider.

After seven days (as mentioned above) they will then be eligible for workers’ compensation calculations to serve as the foundation for financial recompense.

If disputes arise, the DMC will be involved in handling claimed petitions or information hearing applications to progress the case. This process is usually undertaken by the worker.

Further Support & Your Particular Needs

We hope this has served as an enlightening primer on the crucial requirements surrounding workers’ compensation insurance in New Jersey.

If you would like further consultation and to discuss potential coverage options, we would warmly recommend speaking with Schumacher Insurance Agency.