New Jersey Workers Compensation

Workers compensation insurance helps employers be prepared for work-related injuries and illnesses. Understanding New Jersey’s workers compensation requirements – from employee benefits to employer insurance coverage responsibilities – can help businesses stay compliant and prepared. Explore how work-related injuries, reporting requirements, and NJ workers comp laws apply to your business.

Understanding workers compensation in New Jersey

Located at the heart of the East Coast, the Garden State has a patchwork of diverse landscapes, cultures and industries. Cultivating a healthy business and workforce in a sometimes-complicated terrain may not be easy. Travelers can provide support through a workers compensation insurance offering that can adapt to emerging needs.

Who is required to carry workers compensation insurance in New Jersey?

State law requires all New Jersey businesses with one or more individuals, whether full-time or part-time, to obtain workers compensation insurance.

Even out-of-state employers may need coverage if a contract of employment is entered into in New Jersey or if work is performed in New Jersey.

Who can receive workers compensation benefits in New Jersey?

Injured employees are generally eligible to receive workers compensation benefits. Some individuals are automatically included in or excluded from workers compensation in New Jersey:

Corporations: Officers are included in coverage and may NOT elect to be excluded.
Partnerships: Partners are excluded from coverage and may elect to be included in coverage. All of the partners must elect the coverage.
Sole Proprietorships: The sole proprietor is excluded from coverage and may elect to be included in coverage.
Limited Liability Companies (LLCs): Members are excluded from coverage and may elect to be included in coverage. All of the members must elect the coverage.

New Jersey requirements to consider

Minors who suffer a work-related injury or illness generally are entitled to workers compensation benefits.
Failure to provide required workers compensation insurance can expose employers to severe consequences, including civil liability for employee injuries, illnesses, or deaths, criminal charges and penalties, monetary fines imposed by state authorities, and stop-work orders halting business operations until coverage is obtained.

Overview of workers compensation requirements in New Jersey

Understanding New Jersey workers compensation is essential for employers. Being aware of state requirements helps employers comply with the law and support employees. This is an overview of the fundamentals of employer responsibilities and the benefits employees may receive under NJ workers compensation law. 

New Jersey workers compensation employer responsibilities overview

Compensable injuries

Generally, injuries arising out of and in the course of employment, regardless of whose fault it is, have potential for workers compensation benefits. This includes occupational diseases and cumulative trauma injuries.

Occupational diseases and cumulative trauma injuries are conditions that develop over time in the workplace. These may include conditions like carpal tunnel syndrome, respiratory illnesses, or hearing loss. The disease must be shown to be due in a material degree to causes or conditions which are characteristic of or peculiar to work or employment.

Early reporting and evaluation are critical for claim validity.

Posting notices

Employers are required to display the “Workers’ Compensation Insurance Notice Poster” in both English (Form 16 NJ A) and Spanish (Form 17) in a conspicuous location at each worksite.

This notice provides employees with information about their rights and responsibilities and must state the name of their employer’s current workers compensation insurance carrier.

Providing medical treatment 

In New Jersey, employers have the right to choose the medical provider for an injured employee’s treatment.

This means injured employees must receive care from a physician authorized by the employer or their insurance carrier for treatment to be covered.

Providing lost wages (indemnity) 

Employers can be responsible for lost wages. The employee benefits section gives a more in-depth explanation of the types of wage benefits employers may be responsible for.

Prompt reporting and forms

Employers should encourage employees to promptly notify them of any accident or injury. Once aware of a work-related injury, the employer should make sure the injured employee understands they can seek medical treatment if needed. The employer should notify their insurer right away of any work accident or injury so that their insurer can timely report to the New Jersey Division of Workers’ Compensation.

Employers or their insurer may need to report claim information throughout the claim process.

Prompt reporting is essential to avoid penalties and provide timely benefits for injured employees.

Record keeping

Employers should maintain thorough documentation, including details about what happened, when, where, and witnesses involved. Accurate record keeping and prompt reporting to their workers compensation insurer can play a key role in a timely and complete investigation and handling of the claim.

The employer should continue to maintain and provide necessary information to their insurer throughout the claim process as it is vital for efficient claim handling and compliance with the workers compensation law.

Penalties

The consequences for failure to provide workers compensation coverage can be very significant, even without a work-related injury.

Employers who fail to comply with workers compensation obligations may face substantial penalties, including fines and legal action.
In the case of a corporation, liability for failure to insure can extend to the corporate officers individually. Penalties assessed for failure to insure are not dischargeable in bankruptcy.

New Jersey workers compensation employee benefits overview

Calculating Average Weekly Wage (AWW) in New Jersey

The Average Weekly Wage (AWW) includes base pay, overtime, and other regular earnings, and employers must provide accurate wage information to the insurer for proper calculation.

The AWW is calculated based on the employee’s earnings during the 26 weeks prior to the injury. The benefit rate is set at 70% of the AWW. Minimum and maximum rates apply.

Temporary Total Disability (TTD) benefits

Temporary Total Disability (TTD) benefits are available to employees unable to work due to work-related injury or illness. These benefits begin after a 7-day waiting period.

If the disability extends beyond the 7-day period, benefits are paid retroactively to the date of the injury.
TTD benefits are calculated at 70% of the employee’s average weekly wage (AWW).
Benefits continue until the employee reaches maximum medical improvement (MMI), returns to work or reaches the 400-week limit.
Minimum and maximum rates apply.

Permanent Partial Disability (PPD) benefits

Permanent Partial Disability (PPD) benefits are provided to employees who suffer a lasting impairment but are still able to return to work.

These benefits are determined based on the nature and severity of the impairment.
New Jersey law outlines compensation for both scheduled losses (such as limb injuries) and non-scheduled losses (such as back or internal injuries).
The payment amount is based on a percentage of disability assigned by a medical professional and paid over a specified number of weeks according to the state’s benefit schedule.
Minimum and maximum rates apply.

Permanent Total Disability (PTD) benefits

Permanent Total Disability (PTD) benefits are available to employees unable to return to any form of employment due to their injury.

PTD benefits are calculated at 70% of the employee’s Average Weekly Wage (AWW), up to the maximum allowable limit.
Initially, benefits are paid for 450 weeks.
If the disability continues beyond 450 weeks and is medically verified, benefits may continue for life.
PTD may apply in cases of catastrophic injury, such as the loss of two major body parts or total blindness.
Minimum and maximum rates apply.

Fatality benefits

If an employee dies because of a work-related injury or illness, dependents may be entitled to death benefits.

These benefits are calculated at 70% of the deceased employee’s Average Weekly Wage (AWW), subject to a family maximum.
Benefits are distributed among eligible dependents as ordered by the New Jersey Division of Workers’ Compensation.
Burial and funeral expenses up to a maximum is available.

Medical benefits

Employees injured on the job are entitled to all reasonable and necessary medical treatment, including doctor visits, hospitalization, surgery, physical therapy, and prescription medications.

Employers or their insurance carriers have the right to choose the authorized treating physician for the employee.
If the injured employee seeks care outside of an authorized treating physician without prior approval, the treatment may not be covered.
Employees are not responsible for any copayments or deductibles.

Legislative updates

Regulations, laws and potential changes that can shift your course

As the nation’s largest writer of workers compensation insurance, Travelers is committed to understanding new and evolving legislation, regulations and trends at the state level. Our employees serve on regional and national associations, boards and committees to advocate on behalf of our customers and the industry. We educate stakeholders on the impact legislation can have on businesses. By taking an active role in the legislative process, we participate in the important dialog around worker safety and advocate for best practices industry-wide so all can benefit from our workers compensation expertise.

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Why choose Travelers

Care for the employee, confidence for the employer

Employees are at the heart of every business. That's why Travelers is here to help employers keep them safe and support them when accidents happen. Our experienced teams guide both employers and their injured employees through recovery, from getting the right care to returning to work as soon as medically appropriate. In fact, 70% of injured employees return to work within 30 days.

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