Rate of Compensation in New Jersey
Workers' Compensation System
The Rate of Compensation refers to the amount of money an injured worker is entitled to receive as benefits under New Jersey’s workers’ compensation laws. This rate is determined based on a worker’s average weekly wage and is subject to statutory maximums and minimums.
In New Jersey, the rate of compensation is generally calculated as 70% of the worker’s average weekly wage. However, this amount cannot exceed the statutory maximum or fall below the statutory minimum set each year by the New Jersey Department of Labor and Workforce Development. The average weekly wage is typically calculated based on the worker’s earnings during the 26 weeks preceding the injury. This includes overtime, bonuses, and other relevant remunerations.
Factors Affecting the Rate
Type of Disability
The rate can vary depending on whether the worker has a temporary or permanent disability.
Degree of Disability
Temporary Total Disability (TTD)
This is when an injured worker cannot work at all but is expected to recover. The worker receives compensation until they can return to work or reach maximum medical improvement (MMI). There is a minimum rate set for this calculation.
Permanent Partial Disability (PTD)
The compensation rate may be adjusted accordingly. Partial permanent disability means the worker has a permanent disability but can still work in some capacity. The degree of disability here is crucial as it determines the amount of compensation. For instance, if someone has a 20% disability, they might receive benefits based on that percentage. For instance, a worker with a 30% disability in their hand will receive benefits for 30% of the weeks allocated for the total loss of a hand. Note that there is also a minimum rate set for this calculation, but it is different and substantially lower than the minimum for TTD.
The average weekly wage is typically calculated based on the worker’s earnings during the 26 weeks preceding the injury. Again, this includes overtime, bonuses, and other relevant remunerations.
Understanding the rate of compensation is crucial for injured workers as it directly impacts their financial well-being during recovery. The compensation aids workers in meeting medical expenses and compensating for lost wages due to their inability to work.
The Rate of Compensation serves as a benchmark to ensure injured workers in New Jersey are fairly compensated for injuries sustained at work. While it’s rooted in a standard calculation, individual circumstances and the nature of the injury can influence the final amount. Injured workers should always seek clarity on how their rate is determined to ensure they receive the maximum benefits they’re entitled to.