Employer’s guide to New Jersey workers’ compensation insurance

Ready to figure out how to secure workers’ compensation insurance for your New Jersey business? Huckleberry is here to help.

The following guide will help you learn all you need to know about New Jersey workers’ compensation laws, the New Jersey Workers’ Compensation Act (NJSA), and how to get NJ workers’ compensation insurance.

Step 1: Is workers’ comp insurance required in New Jersey?

Yes.

New Jersey workers’ compensation laws dictate that all employers with employees must carry workers’ compensation insurance.

The New Jersey workers’ compensation laws apply to all full-time, part-time, and seasonal employees if they are paid salaries or wages and have taxes deducted from them. For interns, volunteers, and contractors, coverage is not required.

Do I need workers’ comp for New Jersey subcontractors?

If you're hiring a subcontractor for your business, the subcontractor is not mandated to secure workers’ compensation insurance under New Jersey workers’ compensation laws.

To determine if someone providing you work services fits the “subcontractor” designation, you should contact the Division of Workers’ Compensation to speak with a workers’ compensation attorney or another workers’ comp law firm for clarification. Most of the time, subcontractors are determined based on whether the employer has control over the worker and how the employer controls the work.

Do I need workers' comp for independent contractors in New Jersey?

Under New Jersey workers’ compensation laws, all independent contractors do not need to be covered under workers’ compensation insurance. For a worker to be treated as an independent contractor, the employer has to prove that the worker conducts work without their control or direction, the worker performs work outside the usual course of the employer’s business, and that the work is being done by someone who has their independent trade or business for the specific type of work being done.

Ultimately, it’s better to be on the safe side and get workers’ compensation coverage for any independent contractors who do significant work for your business.

I’m an out-of-state employer. Do I need workers’ comp in New Jersey?

Under New Jersey workers’ compensation laws, out-of-state employers must secure workers’ compensation insurance for any work performed in New Jersey.

If you’re an out-of-state employer and already have workers’ compensation insurance in your state, you can obtain New Jersey workers’ compensation coverage by adding a New Jersey endorsement—item 3A—to your existing policy.

Listing New Jersey under item 3C of your existing policy is not sufficient. Per New Jersey workers’ compensation laws, you must add the New Jersey endorsement to item 3A.

However, if your out-of-state workers’ compensation coverage is with a company not licensed in New Jersey, you cannot add the 3A endorsement item to your policy. Under New Jersey workers’ compensation laws, the only way to properly insure your New Jersey employees is by purchasing a New Jersey workers’ compensation policy via a licensed New Jersey insurance carrier.

Step 2: What happens if I don’t get workers’ comp in New Jersey?

Suppose you fail to secure workers’ compensation insurance protections when New Jersey workers’ compensation laws require. In that case, you will be issued a fine of up to $5,000 for the first 10 days you’re uninsured, and up to another $5,000 for each ensuing 10-day period you continue to operate without workers’ compensation insurance. The worst part is that any fines or penalties you incur for not having workers’ comp insurance are not dischargeable if you declare bankruptcy.

It doesn’t seem like a good gamble, so while you’re thinking about it, get workers’ comp insurance.

Step 3: I’m a business owner in New Jersey. Do I need to purchase workers’ comp for myself?

You’re all set to purchase workers’ comp, but you need some help figuring out whether you’re allowed to exclude any of your officers or upper leadership from coverage.

We’re here for you. Here’s how the exemption works in the State of New Jersey:

First, your employees are covered.

When you purchase workers’ comp for your business, all full-time employees and part-time employees will be covered.

Is your business a corporation?

If so, your corporate officers are automatically included in your workers’ comp policy and are not permitted to exclude themselves from the policy.

Is your business a sole proprietorship?

Sole proprietors are exempt from the workers’ comp requirement. New Jersey workers’ compensation laws do not offer a waiver or exemption form for businesses not required to carry coverage; however, they may now choose to purchase workers’ compensation insurance for themselves.

Want workers’ comp anyway? Contact your insurance company. (Note that not every insurance company offers coverage for sole proprietors).

Step 4: How do I get workers' comp in New Jersey?

There are 2 main ways to get workers’ comp insurance in New Jersey:

1. The traditional way: Find an insurance agent or insurance broker and fill out many paper forms, provide payroll information and other supporting documents—then wait for a quote. This process can take up to a few weeks, so don’t procrastinate.
2. The digital way: Get a quote in about 5 minutes. Everything is online. Everything is easy.

Step 5: What is the cost of workers’ comp in New Jersey?

It depends on what kind of business you run and the size of your payroll. The bigger your payroll, the more you’ll spend on workers’ comp. Your rate will also change based on your industry. A tech company, for example, will pay a lot less for workers’ comp disability insurance than a construction company would—even if their payrolls are identical.

Regarding specific workers’ comp costs, some estimated rates in New Jersey are $1.45 for every $100 in covered payroll. Huckleberry customers have gotten coverage for as little as $16 per month—not even a dollar per day.

You can find a temporary total of how much you would pay by getting an instant workers’ comp estimate.

Step 6: What are the workers’ compensation insurance limits in New Jersey?

When you request a workers’ comp estimate, your rate will automatically be calculated based on payroll and other factors—and there’s nothing you need to think about or decide.

The amount your insurance company might pay for healthcare is theoretically unlimited. Suppose a worker picks up a permanent disability or permanent partial disability because of a work-related injury. In that case, an insurance company might pay disability benefits to that worker for the rest of that worker’s lifetime. And, yes, this means that all workers’ comp insurers sell the same product.

Step 7: So, what does workers’ comp cover in New Jersey?

Workers’ compensation medical benefits cover medical treatment and costs for work-related illnesses for injured workers.

Suppose your employee has some medical issue or occupational disease directly from employment. In that case, workers’ comp benefits will step in to ensure they have the funds they need to recover and join the workforce again. It will also pay out wage loss benefits, permanent disability benefits—70% of your average weekly wage in New Jersey—and death benefits, should the worst happen.

Now let’s look at the details of New Jersey workers’ comp insurance.

Medical expenses

Under New Jersey workers’ compensation laws, if one of your employees gets injured on the job, workers’ comp takes care of medical bills and other associated costs that fall under a workers’ compensation claim.

For example, workers’ comp may cover expenses for a back injury from a sudden accident or the cost of treating carpal tunnel syndrome—or another occupational illness— if your employee has been injured because of a repetitive motion at work. Pre-existing conditions aggravated by workplace duties—assuming the primary cause of the disability is the work injury—could also be covered, as could diseases and infections resulting from the initial injury. Even travel costs to and from appointments and physical therapy would likely fall under workers’ comp coverage.

Workers’ comp will cover most expenses associated with a work-related illness or personal injury.

On the other hand, New Jersey workers’ compensation would probably not cover medical expenses for an injury that results from ignoring safety regulations and workplace rules, nor would it cover an employee if they were injured because of being intoxicated or under the influence of illegal substances on the job. Also, New Jersey workers’ compensation laws clarify that workers’ comp medical benefits do not cover “pain and suffering” or stress-related conditions, making heart attacks a bit of a gray area. (But, hey, it’s good practice not to stress your employees out).

Lost wages

If a workplace injury is severe enough to cause an employee permanent total disability or to simply miss work, workers’ comp can help bridge the financial gap with some temporary disability benefits or total disability benefits until you reach your maximum medical improvement. The amount the worker receives depends on the compensation rating resulting from the impairment.

Death benefits

Should the worst happen, workers’ compensation benefits can help pay up to $3,500 for burial or funeral expenses and other costs associated with the death. It will also pay out dependency benefits to the employee’s family, specifically to any surviving spouse or dependent minors, with the maximum set each year by the New Jersey Department of Labor and Workforce Development. Additional benefits could be given if a child is mentally ill or has physical disabilities, up to 450 weeks of payments.

Step 8: What should I do if my New Jersey employee is injured and needs workers’ comp?

Unfortunately, accidents can happen even in the safest of workplaces. But we’re here to help.

Here’s what to do immediately after a workplace accident

Make sure your employee gets medical attention.

This is your priority. Call 911 immediately for severe and life-threatening injuries, and arrange transportation to the nearest Urgent Care for less-severe injuries. Seriously, take care of your people before you do anything else.

Let your insurance company know.

Call your insurance agent and open a workers’ compensation case. The insurance rep may fill out a form for you and send you copies within 3 business days. But, if they don’t, you’ll need to fill out the form yourself.

Document the job injury.

Fill out the insurance coverage form, then give your insurance carrier and employee a copy ASAP. Insurance companies prefer that the injured employee sign the form, but you can write “not available” in their signature box if they can't. (If you’re a Huckleberry customer, you can also find this form online in your customer portal.)

Covered the big stuff? Let’s look at some other things you need to know.

Who is responsible for relaying information between the insurance carrier and employee?

That would be you—the employer. It’s essential to promptly relay information from the insurance carrier to the employee (and vice versa) when filing a workers’ comp claim.

Once the initial form is turned in, the insurance company will decide whether the formal claim is eligible for benefits. If they decide it is, they will choose a medical practitioner to take on the employee’s diagnosis and medical care and give the option for one change of medical practitioner.

You, the employer, must get a list of the employee’s work limitations (if applicable) from the doctor’s office and report them to the insurance company.

Then, if the doctor determines that your employee can return to work at a limited capacity, you’ll need to inform the insurance company of what sort of restrictions you’re accommodating and whether the employee is earning the same wages they were before.

We can’t emphasize this enough: Keep in touch with your insurance adjuster regularly while making these decisions and observations.

What happens if a New Jersey employee dies on the job?

Worst-case scenario—someone dies on the job. Here’s what to do.

First, contact the New Jersey Division of Workers’ Compensation to tell them of the incident and the death. We recommend doing it as soon as possible, as there’s also a statute of limitations for filing a claim in New Jersey, so you’ll want to make sure it’s handled within the specific 2-year time limit.

Next, fill out an injury or illness form—the Employer’s First Report of Injury or Fatality, Form 101—and send it to your insurance carrier.

Finally, give your insurance company a follow-up call. They’ll be able to tell you the appropriate next steps for what to do when filing a claim.

Any additional information I should be passing along?

Yes. You should have already posted a work comp information disclaimer—a notice to employees poster— in a conspicuous place, a requirement under New Jersey workers’ compensation laws. This information includes your insurance company’s name and phone numbers, an anti-fraud statement, and the expiration date of your policy.

Congratulations! You did it! You’ve just learned how to secure workers’ compensation insurance per New Jersey workers’ compensation laws!

Have more questions? Your insurance company has done all of this before.

Know that your insurance company is there to walk you through the intricacies of state laws surrounding the workers’ compensation system. If you have any questions, give them a call. They’ll make sure you’re getting the guidance you need.

Just remember, for all things business insurance, Huckleberry has you covered. In less time than it takes to plan a day trip around the state of New Jersey, Huckleberry can provide you with online insurance quotes and policy options that will protect your accounting practice now and in the years to come.