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New Jersey workers' compensation insurance: Your guide to requirements and getting a policy
If you’re a New Jersey employer looking to protect both your business and your team, you’re in the right place. At Beyond, we provide the essential information you need to understand how workers’ compensation works and how to stay compliant.
Workers’ compensation insurance isn’t just a legal requirement—it’s a practical safety net for both employees and employers. For workers, it offers reassurance that if they’re hurt or fall ill due to their job, medical care and wage replacement are covered—without out-of-pocket expenses. For employers, it’s vital protection against lawsuits, financial penalties, liens, and even criminal charges related to workplace incidents.
In New Jersey, the law is clear: most employers must carry workers’ compensation insurance. This includes:
Corporations: Every corporation operating in NJ, including its officers, must maintain valid coverage or be self-insured with state approval.
Partnerships/LLCs: Required to insure if anyone (excluding partners or members) performs services for the business.
Sole Proprietors with Employees: Must carry insurance for any hired staff.
Yes. While most employers must comply, some are exempt from the requirement:
Unpaid volunteers and interns
Independent contractors
Sole proprietors with no employees
Partners in a partnership and members of an LLC
No one hopes to use it, but workers’ compensation covers a range of situations:
Medical Benefits: Covers all necessary treatment, prescriptions, and hospitalization related to the work-related injury or illness.
Temporary Total Disability (TTD): Kicks in after 7 days of disability, retroactive to the first day. Workers receive 70% of their average weekly wage until they recover or reach the 400-week limit.
Permanent Partial Disability: If a permanent impairment occurs, weekly payments are made based on functional loss.
Permanent Total Disability: If the employee cannot return to any form of work, they may receive 70% of their wages for up to 450 weeks, with extensions possible for total disability.
Death Benefits: Dependents may receive payments, and funeral costs up to $3,500 if the injury results in death.
There are two paths employers can take:
Purchase a Policy: Over 400 insurers are authorized in New Jersey. Premiums are based on payroll, industry risk, and claims history.
Apply for Self-Insurance: Requires approval from the Department of Banking and Insurance. A security deposit may be required depending on financial stability.
New Jersey takes violations seriously. Employers who misclassify workers (e.g., labeling employees as independent contractors) or fail to secure insurance face harsh consequences:
A $5,000 fine if no coverage is in place for ten days
Additional $5,000 every ten days until coverage is secured
Criminal charges (4th-degree felony) for submitting false or incomplete information
Civil penalties and liens may be levied against both the business and its officers
Employees must report work-related injuries promptly to a supervisor or manager – written notice is not required.
The employer must then submit a First Report of Injury electronically to the state. After the review, both parties are notified and the employee is directed to a designated healthcare provider.
Under New Jersey law, the employer (or their insurer) selects the treating physician for workplace injuries or illnesses, except in emergencies.
Need more information? Contact the New Jersey Department of Labor and Workforce Development – Division of Workers’ Compensation at (609) 292-2515 or explore the following:
Maintaining workers’ compensation insurance is one of the smartest ways to protect your business. It ensures that employees get the care and support they need while shielding you from serious legal and financial consequences.
Have questions or need help setting up your policy? Beyond is here to help simplify the process and keep your business compliant.
