New Jersey Workers' Compensation Requirements

An A-Z guide on everything you need to know before you purchase a New Jersey Workers' Comp Insurance Policy

New Jersey workers' compensation requirements stipulate that businesses with at least one employee or who are not covered by federal programs have workers' comp coverage. This policy covers the cost of medical treatment for employees with work-related injuries.

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Self-employed professionals do not need workers’ comp coverage if they are considered independent contractors.

Who is not required to be covered?

  • Interns
  • Volunteers
  • Contractors

Is workers’ comp insurance required in New Jersey?

Like most states in the US, New Jersey does require most businesses to provide workers’ compensation insurance to their employees. However, the state differs from others in some key ways. For instance, part-time and full-time employees must be covered by workers’ compensation insurance if taxes are deducted from their wages or salaries.  

In addition, the state takes a very different stance from others when it comes to interns, volunteers, and contractors – none of these individuals are required to be covered.

Do you need workers’ compensation coverage if you’re self-employed?

Self-employed professionals do not need workers’ comp coverage if they are considered independent contractors.

Who is exempt from New Jersey workers’ comp requirements?

Many people are exempt from the workers’ comp requirements in New Jersey, including the following:

  • Sole proprietors with no employees
  • Self-employed professionals with no employees
  • Independent contractors
  • Business partners
  • Freelancers
  • Members of an LLC
  • Employers covered by federal programs

How much is workers’ comp coverage in New Jersey?

Your New Jersey workers’ comp rate will depend on the following factors:

  • The type of business you have
  • The size of your payroll
  • Your safety record
  • Claim history
workers comp policy cost

How can New Jersey small business owners save money on workers' comp?

While most New Jersey-based small business owners must pay for workers’ comp insurance, there are ways to reduce your costs

  1. Make sure your employees are classified correctly. If an employee with a desk job is classified as a higher-risk position, it will increase your rates. It also makes you liable for misclassification fines.
  2. Create a zero-tolerance policy and enforce it. Drug and alcohol use are common causes of workplace accidents. By creating and enforcing a no-tolerance policy, you can create a safer, healthier environment for everyone while also reducing the costs of your workers’ comp insurance.
  3. Create an employee-led safety committee that’s responsible for identifying hazards and providing safety training for your employees.
  4. Create and implement a safety training course. All employees should complete the course and sign off that they understand the safety rules and procedures they learned.

How does workers’ comp work in NJ?

Understanding how workers’ compensation insurance works in New Jersey is an important part of being an informed, prepared business owner. The process is relatively simple. 

If an employee is injured in a work-related task or on the job or develops a work-related disease, workers’ compensation insurance will pay for the medical costs involved, including physical therapy/rehabilitation. It will also pay for at least some of the employee’s lost wages. In the event of a fatal workplace injury, the insurance will pay death benefits to the employee’s survivors.

In New Jersey, workers’ comp will cover 70% of an employee’s weekly wages during recovery, but only if the employee is disabled/unable to work for over seven days.

What does workers’ comp cover in New Jersey?

Workers who file a workers' comp claim in New Jersey can receive benefits for the following:

workers comp covers medical bills

Medical bills

New Jersey law stipulates situations where workers’ compensation must cover an injury or work-related disease. For instance, workers’ comp would cover injuries that took place while performing a job, if the employee’s injury could not be treated with basic first aid, and if the employee has taxes deducted from their paycheck.

workers comp covers lost wages

Lost Wages

Workers’ compensation benefits, will also cover lost wages while the person is recovering, as well as permanent total and partial disability benefits, temporary partial and total disability benefits.

workers comp pays death benefits

Death Benefits

In the unfortunate case of a fatal injury, workers’ comp insurance will provide death benefits and funeral costs. For further information, read the Injured Worker’s Benefits Guide published by the New Jersey Workers’ Compensation Commission.

Workers' comp coverage also protects employers from legal action. This means that if an employee sues your business because of a workplace injury, the insurance will cover the legal costs of the case.

How to get workers’ comp in New Jersey

Obtaining workers’ compensation insurance in New Jersey is available from many private insurance companies. Business owners can compare coverage options and terms to get the right fit. However, not all insurance carriers offer workers’ compensation coverage. 

Large businesses in the state may qualify to self-insure, and smaller businesses can join a licensed self-insurance group association or work with a professional employer organization (PEO). 

The NCCI can also help insure businesses that cannot find workers’ comp coverage elsewhere. Kickstand Insurance also offers affordable, comprehensive workers’ comp coverage for businesses throughout New Jersey.

What can happen if I don’t have workers’ comp insurance in New Jersey?

Don’t have worker’s compensation insurance? It’s important to rectify that immediately because it can lead to negative outcomes for your business. Under the state’s Department of Labor and Workforce Development’s Division of Workers’ Compensation guidelines, businesses could face:

  • $5,000 for the first 20 days without workers’ comp insurance
  • $5,000 per 10-day period after that point until the situation is rectified.

Note that the fines are nontraditional and take the form of liens. Property seizures are the primary means of prosecution.

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What are workers’ comp death benefits in NJ?

Workers’ comp death benefits vary across the US. In New Jersey, they include weekly payments to the surviving dependents of up to two-thirds of the lost average weekly wages for up to 450 weeks from the date of the injury (not the date of death). Up to $3,500 is set aside for burial costs. A single dependent receives 50% of the deceased employee’s wages, with an additional 5% per additional dependent up to 70% of the employee’s wages.

How do workers’ comp settlements work in NJ?

Workers’ comp settlements are beneficial for both the employee and the employer and prevent a case from going to court. In New Jersey, these can be either Section 20 settlements or Section 22 settlements. 

Section 20 is for situations where the insurance company denied all or part of the employee’s claim but allows a full and final settlement as a lump sum in exchange for the employee giving up all rights to future claims related to the injury. 

Section 22 settlements allow insurance companies to pay permanent disability benefits in installments and the employee retains the right to make additional claims for up to two years from the final payment in the original settlement.

What are the statutes of limitation regarding workers’ comp in NJ?

Unlike some states, New Jersey draws a firm line – employees have two years to file a workers’ comp claim from the date of the injury or the last payment of compensation. For work-related illnesses, employees have two years to file from the date they became aware of the condition.

How do I get a workers’ comp insurance policy with Kickstand Insurance?

Start by filling out a short online form about your business. We’ll use that info to get you an estimated quote. Then, one of our experienced agents will contact you to review the quote and make sure you are getting the absolutely lowest rate possible for your business. Once the quote is finalized, you’re ready to buy the policy - often with coverage starting that day!

Learn more about Workers' Comp in New Jersey

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