What is the Purpose of Workers’ Compensation Insurance in NJ?

What is worker’s compensation? Worker’s compensation insurance in NJ is coverage designed to grant harmed or injured employees with a set form of monetary allowances.

The laws are set up to prevent the incurred costs of being made unable to work, as well as the necessary coverage to help with recovery costs.

Worker’s compensation also protects businesses in that it has been designed as a means to properly provide injured employees with the means they need to move forward.

This discourages and actively bars the legal standing for resulting lawsuits.

In this way, it’s better for companies, it provides employees with the necessary grounding and payout to forgo worry about finances thanks to wage replacement or easier access to disability compensation, and it also provides both parties with a solid path forward.

To that end, it’s no wonder these laws have been designed and enforced.

Remember that each state may hold their own specific laws surrounding what form worker’s compensation insurance will take in NJ. That being said, all states do require this as a form of necessary insured protection.

In New Jersey, worker’s compensation can be provided by Keller Insurance Services.

How Is Worker’s Compensation Insurance Affected By New Jersey Law?

Worker’s compensation requirements are defined by injuries that occur while performing a work task. If the injury itself requires more than a first-aider’s response, and is suffered by someone earning a tax-deductible income, the coverage applies.

If you hold one or more employees in your business, you are required by New Jersey law to provide worker’s comp insurance.

This will include temporary employees, or those on a part-time basis. If they accept salaries or hourly wages, and pay tax contributions, they require worker’s compensation insurance.

That being said, additional employment types, such as subcontractors, volunteers, and interns do not require this sort of coverage.

Another nice element of worker’s compensation insurance in NJ is that employees will be entitled to said compensation no matter where the fault lay in the accident or event leading to the injury.

A change to the law has also shown that workers can not directly sue the company for accidents contributed to via company negligence. The employee must move through the correct worker’s insurance compensation to make their claim.

DWC, the Division of Worker’s Compensation, is the legal body that oversees for the administration of New Jersey Worker’s Compensation Law (N.J.S.A. 34:15-1).

In the year 1911, the State of New Jersey enshrined worker’s compensation coverage as mandatory in employment law, putting coverage responsibilities on the direct shoulders of those hiring staff. This holds limited exceptions, such as if certain staff are already protected via federal programs.

Sixty-eight years later, in 1979, further reforms took place. The State of New Jersey found it appropriate to adjust the coverage sums to provided further necessary financial compensation to those suffering from disabilities sourced from injury.

This was designed to ensure those who could not return to work for a time were able to keep up with the rising cost of living.

In the same stroke, they also reduced disability benefits for those who were expected to make a full recovery or those who were only temporarily taking time off work.

Does My Business Require This Coverage?

If you plan to hire employees to the point where tax deductions are subtracted from their income, then yes, you require the coverage. As mentioned prior, certain exceptions include hiring unpaid interns, volunteers, subcontractors, or consultants.

How Is This Coverage Calculated?

It’s important to know the nuts and bolts of how coverage will be calculated because this is a fundamental part of your operational and budgeting framework. The statute of limitations precluding a claim is set at two years.

Here are some general guidelines:

  • An award totaling 70% of weekly wages (set at a low of $216 up to a maximum of $810), are given to those suffering a partial or permanent disability.
  • Coverage is defined by your particular company’s class code. These are used by insurance providers to designate your provision of a particular risk. As you can imagine, jobs that involve exposure to heavy machinery or intense physical labor are considered risker than office jobs. It’s important to give full and complete details of your company’s operations in order to provide the clearest risk analysis possible. You can click here for information relating to New Jersey’s classification codes.
  • Compensation calculations may be affected by how long certain employees have been at your firm and receiving a tax-deductible income. This includes seasonal terms.

How Do Claims Usually Proceed?

If you’re going to be covered by important insurance, it’s crucial to know how this will operate in the event of an employee’s injury. Of course, we must always design for our annual injury rate to be zero, but we must also plan for reality.

So, how do claims usually proceed? Well, to begin with, under New Jersey law employers are able to select the physician(s) that will attend to injuries should they occur.

After the accident first takes place, it will first be reported to your management. After management makes the necessary arrangements for immediate care, they must report this accident to the insurance carrier.

This is named the First Report of Injury. That will then be filed with State apparatus.

Next, your insurance provider will evaluate the claim and verify it against New Jersey worker’s compensation law. If this is in keeping with the set requirements (we have discussed those above,) the next part of the process is followed.

This includes the insurance carrier taking the time to contact all involved parties, such as the injured worker (or familial representative), you as the employer, and the medical provider tasked with processing this care.

The medical provider is the main authority regarding the classification of injury, and they will produce a report with all of the particulars.

After seven days, the employee will have been receiving treatment and thus the eligibility of their worker’s compensation claim will be valid. Should disputes take place, the DMC will then involve themselves.

This process usually generated by the injured employee, and directs the DMC to handle claim petitions or open hearings regarding the complaint.

With this information, we hope you can more easily understand the purpose of worker’s compensation insurance in NJ.

You can contact Keller Insurance Services to find out more information.