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September 17, 2025
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If you’re a New Jersey employer looking to protect both your business and your team in 2026, 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 under guidance from the New Jersey Department of Labor and Workforce Development and its Division of Workers’ Compensation.
Workers’ compensation insurance isn’t just a legal requirement—it’s a practical safety net for both employees and employers. For workers, it helps ensure medical care and wage replacement are covered for job-related injuries or illnesses. For employers, it helps limit exposure to serious consequences like civil penalties, liens, and potential criminal charges tied to failing to maintain required coverage.
In New Jersey, most employers must have workers’ compensation coverage (unless they are covered by a federal workers’ comp program). 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.
The state explains the requirement in terms of whether individuals perform services for financial consideration (not just cash—this can include other remuneration). In practical terms:
Corporations: All corporations operating in New Jersey must maintain coverage (or be approved for self-insurance) as long as any one or more individuals, including corporate officers, perform services for financial consideration.
Partnerships/LLCs: Required to maintain coverage (or be approved for self-insurance) if any one or more individuals (excluding partners or LLC members) perform services for financial consideration.
Sole Proprietorships: Required to maintain coverage (or be approved for self-insurance) if any one or more individuals (excluding the principal owner) perform services for financial consideration.
Rather than a broad list of “exempt roles,” New Jersey frames this around who is (and isn’t) performing covered services for financial consideration. For example, the state’s employer guidance explicitly excludes (for the purpose of triggering the requirement) the principal owner of a sole proprietorship, and partners/members of a partnership/LLC—while still requiring coverage when other individuals provide services for financial consideration.
Important: worker classification matters. If someone is treated as an independent contractor but is actually an employee under applicable rules, that can create exposure for coverage violations and fraud/misrepresentation issues (including payroll/classification misrepresentation).
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 primary paths:
Purchase a Policy: You can obtain coverage from any of the more than 400 private licensed insurance companies authorized to sell workers’ compensation policies in New Jersey (often via an agent or broker). For additional help, New Jersey points employers to the New Jersey Compensation Rating and Inspection Bureau.
Apply for Self-Insurance: Self-insurance requires application and approval by the New Jersey Department of Banking and Insurance (approval is based on financial ability and business permanence; security may be required). New Jersey also publishes an employer self-insurance application form (Form 290) for this purpose.
There are two primary paths:
Purchase a Policy: You can obtain coverage from any of the more than 400 private licensed insurance companies authorized to sell workers’ compensation policies in New Jersey (often via an agent or broker). For additional help, New Jersey points employers to the New Jersey Compensation Rating and Inspection Bureau.
Apply for Self-Insurance: Self-insurance requires application and approval by the New Jersey Department of Banking and Insurance (approval is based on financial ability and business permanence; security may be required). New Jersey also publishes an employer self-insurance application form (Form 290) for this purpose.
Employees should notify the employer as soon as possible after a work-related injury or illness. Notice does not have to be in writing (it can be given to a supervisor or anyone in authority).
From the employer side, once notice is received, the employer should notify its carrier or third-party administrator immediately so a First Report of Injury (FROI) can be filed electronically with the state. New Jersey’s employer guide also notes that a Subsequent Report of Injury (SROI) is filed electronically in specific circumstances (such as after MMI/return to work, per the guide’s reporting discussion).
Electronic reporting is tied to the state’s EDI process through NJCRIB’s EDI program.
Under New Jersey workers’ compensation rules, the employer and/or its insurance carrier generally has the right to select the authorized treating physician(s) for work-related injuries. The injured worker may choose the doctor only in limited situations such as an emergency, or if the employer/insurer inappropriately refuses to provide treatment.
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:
