There is a legal requirement that NJ employers acquire and carry workers compensation insurance at all times. This insurance should cover all employees of the company, including new hires. It is a non-negotiable and extremely firm requirement that exempts few NJ employers. The structure of the workers compensation insurance obtained by your NJ employer may vary, but the legal obligation to protect workers through a policy is finite.
Yet, each year a small number of NJ employers neglect their workers compensation policies, fail to renew plans, forget to pay premiums, or just choose to take the legal risk and not obtain the mandatory insurance. What should an injured worker do if they discover their NJ employer doesn’t have workers compensation insurance?
#1: Determine There Isn’t an Applicable Exception
Upon the discovery that an NJ employer doesn’t have workers compensation insurance, your first step is confirming the employer is violating an NJ law. There are two major exceptions to the requirement to carry workers compensation insurance. You should be certain your employer doesn’t fall outside the insurance obligations.
First, the workers compensation law in NJ exempts any employer covered by a federal program from the workers compensation insurance requirements. This is a blanket exception, meaning it is applicable to all employers that receive insurance commitments from a federal program, but it is also extremely limited. There are few employers in NJ that would meet the criteria of the exception.
The second exception is applicable to employers that qualify for self-insurance. Again, this is a limited number of NJ employers, but the requirements to meet the exception are very different. This exception has nothing to do with federal funding or federal insurance coverage, but it is based upon the employer assuming all the risk of a workers’ compensation case. Every workers’ compensation claim is paid out of pocket by the employer and the ability to pay these claims is demonstrated by financial means and other requirements set by the NJ Department of Labor.
#2: Confirm You Are an Eligible Employee
The next step following your accident or injury is determining that you meet the definition of employee. An employee is someone paid by a particular organization and their work and work obligations fall under the exclusive control of that entity. NJ workers compensation insurance must cover employees that work remotely in the State of NJ and individuals who are out-of-state employees. However, workers compensation insurance doesn’t have to cover independent contractors.
Independent contractors are in control of their own contracts, workload, and job responsibilities. These individuals aren’t tied to a business by salary but paid on a contractual or similar basis. Finally, independent contractors don’t typically receive benefits from an organization, for example, paid-time-off, sick days, or health insurance. If you fall under this definition of an independent contractor, an employer has no obligation to provide workers compensation coverage. An NJ lawyer can assist with this analysis.
#3: Understand the Consequences of Failure to Ensure
There are serious consequences for an employer that fails to carry workers compensation insurance. It is a crime to intentionally refuse or neglect to carry NJ worker compensation insurance, even if there isn’t a workplace injury in dispute. More specifically, it is a disorderly persons crime in NJ and a crime in the fourth degree. This could result in a jail sentence or substantial fine for the person that willfully neglected or refused to purchase the appropriate insurance.
If a workplace injury does occur and an NJ employer is uninsured there are consequences for the business and its top executives. Through a civil lawsuit, the organization is directly responsible for any compensation rightfully owed under workers compensation. This can include temporary or permanent disability, medical expenses, and other applicable losses.
More than company finances are at risk after an uninsured workplace injury. Corporate officers or members of a limited liability company are also financially on the hook for these costs.
#4: Speak to a Lawyer About Your Claim
There are two ways to hold your employer accountable for an uninsured workers compensation claim. The first is by filing a lawsuit in state court. Under normal circumstances, a workers compensation claim must begin with a hearing before the Department of Labor. This requirement is waived when the employer is uninsured.
As an injured employee without access to workers compensation insurance, you are given access to the broader and bigger power of the court system. You can work with a workers compensation lawyer to request damages and compensation that would otherwise be outside the scope of a workers compensation claim. However, the cost of your case and timeframe for possible recover increase. It is also a far more adversarial process that could alienate your NJ employer.
The other option is filing a claim with the NJ Uninsured Employer Fund. This entity is part of the larger NJ Office of Special Compensation Funds, which works to enforce the laws around workers compensation insurance and provide temporary disability for injured workers facing an uninsured claim.
You can work with an NJ workers compensation lawyer from the Law Offices of Albert J. Talone to file a claim with the NJ Uninsured Employer Fund. Our office is located in Southern NJ and has vast experience with workers compensation claims, including uninsured incidents. To talk with a member of our legal team, contact us at (856) 234-4023.