What to know about workers' compensation in New Jersey

Workers’ compensation, which can provide cash and medical care to employees injured on the job, and benefits to survivors in cases of a work-related death, began with a federal program in 1908. It gave benefits to civilian workers whose jobs were hazardous and became the first kind of social insurance established across the United States.

By 1916, the rest of the federal workforce was covered. States meanwhile were enacting their workers’ compensation laws. All but six states and the District of Columbia had them by 1921.

Today, programs exist in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

The details of each program vary by state. Four states—Ohio, North Dakota, Washington and Wyoming—require insurance be obtained through a state-administered fund rather than through a private insurer. Another option is to self-insure for approved businesses. Most states require some businesses to provide coverage and can levy substantial fines for failing to comply. South Dakota and Texas leave the choice to businesses, although Texas makes an exception for construction companies with a government contract.

Simply Business reviewed rules, statistics, and other information about workers’ compensation insurance—including the comprehensive breakdown by the National Federation of Independent Business—to offer a breakdown of what workers’ comp requirements in each state. Rules are subject to updates periodically, so it’s important to stay up-to-date based on your trade and location.

Workers' Compensation in New Jersey

Businesses must have coverage if they have one or more employees, and that could include out-of-state employers doing work in New Jersey if entering into a contract in the state or if work is performed in New Jersey. Penalties for failing to have coverage may be up to $5,000 for the first 10 days and up to $5,000 for each additional 10-day period of failure to insure. An employer that commits fraud can be punished with up to 18 months in jail and a $10,000 fine in addition to civil penalties.

Workers’ Compensation Benefits, Costs, and Coverage, an October 2021 report from the National Academy of Social Insurance, found that total benefits paid to employees rose by 0.4% nationwide from 2015 to 2019. Cash benefits rose by 2%, but medical benefits fell by 1.1%. Standardized benefits fell— cash by 14% and medical benefits by 16.7%—over the same period.

Keep reading to see what workers' compensation looks like for other states in your area.

Workers' Compensation in Delaware

Employers with at least one employee must provide coverage in Delaware, though independent contractors are exempt. Farmworkers also need not be covered, but they can be. Domestic or casual workers who earn less than $750 in a three-month period in a single private home are excluded, as are some real estate professionals. An employer who fails to report injuries as required can be fined between $100 and $250 for each offense. And one who does not provide required coverage can receive a penalty matching the most expensive policy premium, then in effect times three for a year.

Workers' Compensation in New York

New York says that virtually every employer must provide workers’ compensation coverage to its employees, which can be through the state-administered fund. Some exceptions include occasional chores or yard work at a one-family house occupied by the owner or domestic work of less than 40 hours a week. The domestic workers cannot live in the home for the exception to apply. Employers that fail to comply face penalties as high as $2,000 for every 10-day period without coverage. That penalty could be more than $12,000 by the time an employer receives the first notice.