If you run a business in Newark, Jersey City, or Trenton, understanding your responsibilities under New Jersey workers comp insurance is essential. With updated NJ workers comp laws 2025 in effect, the stakes are higher for compliance, and the consequences for failing to meet coverage requirements can be severe.
Key Compliance Points for New Jersey Employers
New Jersey workers’ compensation insurance is a legal requirement and essential business protection. Employers should focus on:
Understanding exact coverage requirements for their business type
Ensuring timely injury reporting and claim processing
Maintaining accurate employee classifications
Implementing safety programs to reduce claims
Working with qualified insurance providers or self-insurance approval
For current requirements and official guidance, contact the New Jersey Division of Workers’ Compensation or consult with qualified legal counsel.
Who Needs Workers Comp Coverage in New Jersey?
New Jersey law requires all employers (not covered by Federal programs) to have workers’ compensation coverage or be approved for self-insurance. Specific requirements include:
Corporations: Must maintain coverage for all individuals performing services, including corporate officers.
Partnerships/LLCs: Must maintain coverage for all individuals performing services, excluding partners or LLC members themselves.
Sole Proprietorships: Must maintain coverage for all individuals performing services, excluding the principal owner.
Coverage Applies To:
- Full-time, part-time, and seasonal employees
- Corporations (even if services are performed by officers)
- LLCs and partnerships with paid employees
- Sole proprietors who hire any staff (even one part-time worker)
Exemptions:
- Sole proprietors and LLC members (unless they opt in)
- Properly classified independent contractors
Even nonprofit organizations and small family-run businesses are subject to these rules. Skipping coverage—even unintentionally—can trigger major NJ workers comp penalties.
Want a simple breakdown of how workers’ comp works? Read our guide: Workers’ Comp Insurance Basics – What You Should Know.
What Does a New Jersey Workers Comp Policy Cover?
This no-fault system guarantees injured employees receive New Jersey workplace injury benefits regardless of who caused the accident. Here are the core protections:
1. Medical Treatment
Covers emergency care, surgeries, physical therapy, prescriptions, and medical equipment. Employers choose the treating provider.
2. Temporary Disability Benefits
Wage replacement starts after seven days of missed work. Employees receive 70% of weekly wages, capped at $1,159/week in 2025.
3. Permanent Disability Benefits
For lasting injuries:
- Partial Disability: Covers partial loss of function (e.g., loss of fingers, hearing)
- Total Disability: Applies when employees can’t return to any type of work
4. Death & Survivor Benefits
- $3,500 in funeral expenses
- Ongoing wage replacement to dependents (spouse, children under 23)
5. Second Injury Fund Access
Employees with pre-existing conditions that worsen after an accident may qualify for extended wage support beyond employer limits.
Workers Comp Cost:
Workers’ compensation costs vary significantly based on industry risk level, payroll amount, claims history, and safety programs. High-risk industries like construction and manufacturing typically pay higher premiums than office-based businesses.
Workers Compensation Claim Process NJ Employers Must Follow
When an employee is injured:
- Employee Must Report: The injured worker should report the injury within 14 days for full benefits. Reports made within 30 days will receive full benefits unless the employer can prove prejudice. The absolute deadline is 90 days – after this, the worker loses all rights to compensation. Earlier reporting is strongly recommended.
- Employer Files Report: A First Report of Injury must be filed within 21 days of notice
- Claim Deadline: The formal claim petition must be filed within 2 years of injury or last payment
Hearings & Disputes:
- Informal hearings resolve minor issues quickly
- Formal hearings involve judges and legal representation
- Emergency motions expedite urgent needs like surgery approval
NJ Workers Comp Penalties and Enforcement
New Jersey takes noncompliance seriously:
- Up to $5,000 fines for the first 10 days of being uninsured, plus up to $5,000 for each additional 10-day period thereafter
- Personal liability for business owners
- Stop-work orders that shut down operations
These fines are non-dischargeable—even if the business files bankruptcy.
Summary
New Jersey workers’ compensation insurance is mandatory for most employers and provides essential protection for both businesses and employees. Key compliance requirements include:
- Maintaining appropriate coverage based on business structure
- Ensuring prompt injury reporting within required timeframes
- Filing required forms with the state within deadlines
- Understanding benefit structures and claim processes
For current requirements and official guidance, contact our professional agents:
855-718-7552
