Employers Behaving Badly: Part Two

NJ Employer Not Obtaining Workers Compensation Insurance:
What an Employee Needs to Know

Table of Contents

In New Jersey, employers shoulder an important responsibility. They need to protect their workers. At the core of this duty is Workers Compensation Insurance. Not having this insurance exposes the employer to major penalties. The employee has delays in benefits. It is a lose-lose situation for both parties.

Note to employer to choose workers compensation insurance coverage.

What is Workers Compensation Insurance?

It’s a legal guard. A safety blanket. An employer’s promise to protect their workforce. Here’s why it matters. Joe, a construction worker, has an accident. He falls off a ladder. He fractures his leg. Medical bills stack up. Joe can’t work. New Jersey workers compensation insurance swoops in. It pays the bills. It replaces Joe’s wages. Joe’s financial worries ease which will speed his recovery.  Joe gets a permanency award for any loss of function of the injured body part.

Is Workers Compensation Insurance Required in New Jersey?

Yes, New Jersey workers compensation law requires workers compensation insurance. This insurance is more than a legal rule. It is a safety net. Imagine you are a worker. An accident strikes. Workers Compensation Insurance steps in. It covers medical bills. It provides wage replacement. It shields you in tough times.

But here is where it gets tricky in New Jersey. Some employers avoid this responsibility. They don’t secure Workers Compensation Insurance. This avoidance breaks the law. It also shatters the trust between employer and employee. It risks financial penalties and legal complications.

The law covers most employers:

  • Corporations: All corporations operating in New Jersey must have Workers’ Compensation insurance. Or have approval for self-insurance. Any employee performing services, including corporate officers, for financial consideration.


  • Partnerships/LLC’s: All partnerships and limited liability companies (LLC’s) operating in New Jersey must have workers’ comp insurance. Or have approval for self-insurance. Any employee performing services for the entity, excluding partners or members of the LLC, for financial consideration.


  • Sole Proprietorship: All sole proprietorships operating in New Jersey must have workers’ compensation insurance. Or have approval for self-insurance. Any employee performing services, excluding the principal owner, for financial consideration.

What is the penalty for not having Workers Comp in New Jersey?

Do you work for an NJ employer that has sidestepped workers compensation insurance? What’s next? Non-compliance isn’t taken lightly. Not by the state of New Jersey. Fines and penalties are inevitable. Think $5,000 for every ten days of non-compliance. That’s a harsh blow to any business’s finances.

Remember, these penalties arise even without a workplace injury. Criminal penalties are also possible. It is a disorderly person’s offense in the State of New Jersey not to provide this insurance. It can be an indictable offense (a/k/a felony) fourth-degree offense if the failure to provide is willful.

In the world of business in New Jersey, adequate insurance coverage is everything. And in the realm of NJ employers, workers compensation insurance is not necessary; it’s crucial. The cost of non-compliance is high. The legal implications are grave. The financial impacts could be devastating.

Why have these penalties in place? To protect the worker.

Workers Comp insurance umbrella protection for injured workers.

Employee Options when Employer Not Covered by Workers Compensation Insurance in New Jersey

As a worker, finding out your employer doesn’t have Workers Compensation Insurance can be scary. But don’t worry, you have rights. If this happens to you, here are a few steps you can take:

1. Report Non-Compliance with the Department of Labor. Any person or business can use an online form to report suspected non-compliance.

 2. The Uninsured Employers Fund (UEF) in New Jersey is a state-managed fund. It provides a safety net for workers injured on the job while working for an uninsured employer; if the employer does not have workers’ compensation insurance, this fund steps in to provide the benefits that would normally be covered by such insurance.

Here’s how it works:

  • Claim Filing: The injured worker must first file a claim with the Division of Workers’ Compensation (DWC). The claim is brought against the employer and the UEF.


  • Determination of Employer’s Insurance Status: The DWC will determine whether the employer truly does not have workers’ compensation insurance. If the employer is indeed uninsured, the claim against the UEF will proceed.


  • Court Hearing: A hearing will be held before a judge of compensation. The judge will evaluate the claim, hear testimonies, and review medical records and other evidence.


  • Judgment: If the judge favors the worker, the UEF will pay the worker compensation benefits. These benefits can cover medical treatment, temporary disability benefits if the worker cannot work because of the injury, and permanent disability benefits if the worker is permanently affected by the injury.


  • Employer Reimbursement: The UEF will then seek reimbursement from the employer. This includes not only the benefits paid to the worker, but also penalties and interest.


3. Lawsuit Against Employer: The employee may also file a personal injury lawsuit against the employer. This case is heard in civil court, which in the State of New Jersey is the Superior Court. Each county in New Jersey has a Superior Court typically located in the county seat. Unlike an NJ workers’ compensation claim, a personal injury lawsuit requires the injured party to prove that the employer was negligent. And that this negligence caused the injury. This may involve showing that the employer knew about a hazardous situation but did nothing to correct it, for instance.

If the personal injury lawsuit is successful, the employee could receive additional damages not otherwise available under NJ Workers Compensation law.   These could include not only medical costs and lost wages (which are typical in NJ workers’ compensation claims) but also pain and suffering, which is not covered by New Jersey workers’ compensation.

Infographic Summary of Article

Key Factors that an employee needs to know when NJ employer did not obtain a workers compensation insurance

An NJ Workers Comp Lawyer to Guide You Through the Complexities of Workers Compensation Law

Workplace injuries or accidents are one of the most devastating incidents that anyone can go through. Large medical bills, working on recovery, and concerns about whether you can still work and lead an everyday life are overwhelming enough for anybody. Not to mention that your primary source of income may be jeopardized for life.

Filing a workers’ compensation claim and dealing with insurance companies should be the last thing on your mind in this event. That is why getting a workers’ compensation attorney who knows the ropes to get the benefits you deserve is essential.

John F. Renner is a worker’s compensation attorney with over 25 years of experience. With a knowledgeable and skilled lawyer like Mr. Renner, you only have to worry about your recovery. Call his office now at 856-596-8000 to discuss your options. We have your back.

About the Author

About the Author

John F. Renner is the founding attorney and principal of John F. Renner P.C. He has more than 25 years of experience representing injured workers in New Jersey. Mr. Renner guides his clients through the complex maze of New Jersey Workers Compensation Law for the best possible outcome.


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