What Happens if a New Jersey Employer Doesn’t Carry Workers’ Compensation Insurance?

Every state has unique workers’ compensation laws that employers need to be aware of in order to protect employees and stay in compliance. New Jersey law requires nearly every employer to carry workers’ compensation insurance or obtain approval to self-insure. Employers that fail to meet this requirement face significant civil and criminal penalties. On top of that, they may be responsible for paying benefits to injured workers.

Workers’ compensation insurance protects both employees and employers. Injured workers gain access to medical care and wage replacement benefits without having to prove fault, while employers receive protection from many workplace injury lawsuits. Employers that ignore New Jersey’s insurance requirements could face financial penalties, business interruptions, and potential criminal prosecution.

Penalties for Employers

Employers that do not maintain the required workers’ compensation coverage may face:

• Civil penalties of up to $5,000 for the first violation period, with additional penalties of up to $5,000 for each subsequent 10-day period of noncompliance.
• Criminal charges. Failing to carry workers’ compensation insurance is generally a disorderly persons offense, while knowingly violating the law can result in a fourth-degree criminal offense.
• Stop-work orders requiring the business to halt operations until it obtains proper insurance coverage and satisfies any assessed penalties.

New Jersey also targets employers that attempt to avoid workers’ compensation requirements by:

• Misclassifying employees as independent contractors.
• Underreporting payroll or employee counts.
• Creating successor businesses to evade penalties or unpaid obligations.

State law allows regulators to pursue these employers and, in some situations, hold successor companies responsible for unpaid workers’ compensation liabilities.

In some cases, corporate officers may be held personally liable for failing to secure workers’ compensation coverage. General contractors may also become responsible for workers’ compensation benefits owed to employees of uninsured subcontractors.

What Happens to an Injured Worker?

An employer’s failure to carry insurance does not automatically prevent an injured employee from receiving benefits. If a judge determines that benefits are owed and the employer cannot or will not pay, the worker may receive temporary disability benefits and medical expense payments through New Jersey’s Uninsured Employers Fund (UEF). The UEF helps cover authorized medical treatment as well as temporary disability benefits while the employee is unable to work.

However, permanent disability benefits are generally not paid by the fund. Instead, those awards become liens against the uninsured employer, allowing the injured worker to pursue collection directly from the business.

Contact a New Jersey Personal Injury Lawyer Today

Workers’ compensation coverage is not an option in New Jersey. It is a requirement, and employers who choose not to have this coverage face serious penalties.

A Morristown workers’ compensation attorney from The Law Offices of Michael P. Burakoff can help you understand your legal options. If you are looking for a law firm who will take the time to address the individual needs of you and your family throughout the workers’ compensation process, look no further. Schedule a consultation today by filling out the online form or calling (973) 455-1567.

Source:

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