Most employers in the state of New Jersey are required to carry workers’ compensation insurance. This means that virtually every employee should be covered by a workers’ compensation insurance plan and entitled to benefits if they suffer a work-related or on-the-job injury.
However, there are a few very narrow exceptions to the coverage requirements. There are also situations in which workers do not qualify for or are exempt from coverage. Even if a worker is covered, the circumstances of an injury may exclude it from coverage under an employer’s policy. Sadly, there are also times when an employer fails to fulfill its legal requirements to maintain workers’ compensation coverage.
Are any employers exempt from maintaining workers’ compensation coverage?
New Jersey workers’ compensation laws require nearly all employers to carry state-approved workers’ compensation insurance. There are a few very limited exceptions, none of which significantly impact an injured worker’s ability to recover compensation for their injuries. For example, employers whose employees are covered by federal insurance do not need to maintain a state-specific policy, and employers that are large enough to fund and administer an independent, self-insured system for workers’ compensation may do so rather than purchasing an outside insurance policy.
How do you know if you are exempt from receiving workers’ compensation?
Although most employers have legally compliant workers’ compensation policies in effect, not all New Jersey workers qualify for coverage. The biggest disqualifier hinges on a worker’s classification as an “employee” or an “independent contractor.” Employees of a company—even part-time employees—are entitled to many employment law-related protections. These include the right to be covered by workers’ compensation coverage, which reimburses employees who sustain injuries on the job for injury-related expenses, including medical bills, lost wages, and disability.
There are many common misconceptions about how to determine whether a worker legally qualifies as an independent contractor. Many employers wrongfully classify workers into this category in order to avoid paying payroll taxes, insurance premiums, and other benefits. Regardless of an employer’s designation, a worker who does not meet the New Jersey Department of Labor and Workforce Development’s criteria for independent contractors should be properly considered an employee. If you believe you have been misclassified as an independent contractor and wrongly denied workers’ compensation benefits, you should contact an employment lawyer immediately.
What kinds of injuries are covered by workers’ compensation?
In order to be covered by an employer’s worker’s compensation coverage, an injury must “arise out of” and be sustained “in the course of” a worker’s employment.
“In the course of employment” means that an employee is at their place of work, during the hours their employer expects them to be there, engaged in the task(s) that they are employed to do.
With the increase in remote work arrangements, flexible work schedules, and other changes to the “traditional” workplace, this simple definition can be confusing. However, the law does not require that an employee be physically present at an employer’s office or company premises. In this case, “place of work” is anywhere an employee is directly involved in actual work. This can include working from a remote office, making approved deliveries, and traveling for business. Similarly, an employee may have designated working hours, or they may have more schedule fluidity. As long as an employee is engaged in work-related activities in a manner that is reasonable for their job, they probably meet this requirement.
“Arising out of employment” means that an employee’s injury must be the direct and proximate result of something that happened in the course of employment.
Some on-the-job injuries are obvious and straightforward, like a factory worker who is injured by machinery. Others are more complicated. A delivery driver who is injured in an auto collision may be covered by workers’ compensation if the accident occurred while they were making deliveries, but not if it happened while they were driving to get lunch or run a personal errand.
The requirement that it be “direct” does not mean that it must be immediately apparent. Cumulative injuries—those that develop over a long period of time, like repetitive motion injuries or diseases that develop after extended exposure to hazardous conditions—may qualify under this requirement.
In order to be eligible for workers’ compensation, however, an injury must be a bodily injury (not a psychological injury or property damage). Although psychological injuries and trauma are serious and significant injuries, New Jersey workers’ compensation law does not provide a remedy for recovering damages unless a worker also suffers physical injuries.
Whether an injury arises out of and is directly related to an injured worker’s employment is a common basis for an employer’s insurer to challenge a workers’ compensation claim. If you have been injured on the job, an experienced workers’ compensation attorney can help you compile the evidence you need to support your claim.
What if my employer does not have compliant workers’ compensation coverage?
Even though New Jersey law requires most employers to carry workers’ compensation insurance coverage, mistakes, oversights, or intentional non-compliance can happen. An employer that forgets to pay a premium or renew coverage—or that chooses to flout the law—can leave employees unprotected.
If a workplace injury occurs and, for some reason, an employer is uninsured, the organization is directly responsible for compensating an employee for their injuries. The employer may be liable for lost wages, temporary or permanent disability, medical expenses, and other losses that would have been paid by workers’ comp. If the company lacks sufficient assets to do so, the worker may be able to recover from the personal assets of corporate officers or members of a limited liability company. (The officers and other parties responsible for the company’s failure to maintain the legally required insurance policies will also face criminal liability, including potential jail time and substantial fines.)
What are my options if I am not eligible or otherwise able to collect workers’ comp?
Workers’ compensation is intended to be an exclusive remedy, replacing a worker’s right to file a private lawsuit against an employer. However, if you are not entitled to workers’ compensation coverage (because you’re an independent contractor, for example), if your employer failed to properly maintain insurance coverage, or if there are other significantly unusual or egregious circumstances, you may be able to file a civil action to recover for your injuries. Contact an employment lawyer with significant New Jersey workers’ compensation experience to discuss your claim and protect your rights.
For a comprehensive overview of workers' compensation in New Jersey, see our guide here.