Does New Jersey require workers’ compensation insurance?
Yes. New Jersey requires workers' compensation as soon as one person other than the owner performs services for pay. N.J.S.A. 34:15-36 counts corporate officers as employees and sets no three- or five-employee floor, so a corporation whose only worker is its officer still needs a policy. Sole proprietors, partners, and LLC members who work in the business are not required to cover themselves, but can elect coverage when the policy is bought or renewed.
Updated . Written by Andre Beukers, principal at Redoubt, a commercial insurance agency in Salt Lake City, not a government office.
How many employees before New Jersey requires workers' comp?
Every New Jersey employer except the state, municipalities, counties, and school districts must make provision to pay compensation from its first employee (N.J.S.A. 34:15-71 and 34:15-72). An employee is anyone, corporate officers included, who performs services for pay. Casual employment, meaning work that arises by chance or is not regular, periodic, or recurring, is excluded, and so are workers covered by the federal Longshore Act.
The Division also says an out-of-state employer may need New Jersey coverage if the contract of employment is made in New Jersey or the work is performed there.
Source: N.J.S.A. 34:15-36, checked .
Which owners, officers, and family members are exempt in New Jersey?
A self-employed person, partners of a partnership or LLP, and members of an LLC who work in the business are not required to buy a policy for themselves. The business needs a policy only once it has at least one employee who is not one of those owners. Owners can be covered if the business elects it on the application at purchase or renewal, and the election cannot be withdrawn mid-term. Corporate officers are not in this group: they count as employees.
Because the statute counts officers as employees, incorporating does not get a one-person business out of the requirement the way forming an LLC can. Which structure fits depends on the business and how its people are paid.
Source: N.J.S.A. 34:15-36, checked .
What happens to a New Jersey employer with no workers' comp?
Failing to insure is a disorderly persons offense, and a fourth-degree crime when it is knowing (N.J.S.A. 34:15-79). The Division can assess up to $5,000 for the first 10 days uninsured and up to $5,000 for each 10 days after that. A knowing violation, including misclassifying employees as independent contractors, draws a stop-work order within 72 hours, with $1,000 to $5,000 a day for ignoring it. Corporate officers active in the business are personally liable.
A contractor that places work with an uninsured subcontractor becomes liable for compensation owed to that subcontractor's injured employees, then has to recover it from the subcontractor. Collecting current certificates from every sub is the practical defense.
Source: N.J.S.A. 34:15-79, checked .
Who enforces workers' comp in New Jersey?
The Division of Workers' Compensation, part of the New Jersey Department of Labor and Workforce Development, administers the law and enforces the coverage requirement through its Office of Special Compensation Funds, which also runs the Uninsured Employer's Fund. The Department of Banking and Insurance regulates carriers and approves self-insurers; it does not enforce employer coverage.
Source: NJ Division of Workers' Compensation, About Us, checked .
Where do New Jersey employers buy coverage?
New Jersey is a private-market state with no state fund. Employers buy from a licensed carrier, directly or through an agent or broker, or self-insure with approval from the Department of Banking and Insurance under N.J.S.A. 34:15-77. An employer no carrier will write applies to the New Jersey Workers' Compensation Insurance Plan, which NJCRIB administers and which assigns the application to a member insurer.
Source: NJCRIB, Online Assigned Risk Application, checked .
Who sets the class codes and rates in New Jersey?
New Jersey is not an NCCI state. The Compensation Rating and Inspection Bureau (NJCRIB), created under N.J.S.A. 34:15-89 and 34:15-90.1, sets the premium rates, runs the classification system and experience rating, keeps each employer's coverage record, and administers the residual market. New Jersey class codes and experience mods come from NJCRIB, and its online search shows an employer's mod and coverage.
Source: NJCRIB, Our Mission, checked .
Is there an exemption or waiver form in New Jersey?
No. The Division's employer requirements page describes no exemption certificate or waiver for owners. An owner with no employees simply is not required to insure; owner coverage, when wanted, is elected on the insurance application. The form employers do meet is the cross-match response form, which the Office of Special Compensation Funds mails when its regular match against NJCRIB coverage records flags a business as possibly uninsured.
A hiring contractor or client may still ask a no-employee owner for a certificate. Since New Jersey issues no waiver, the usual answers are a policy that elects owner coverage or a written explanation of the business structure, and which one a given client accepts is up to that client.
Source: NJ Division of Workers' Compensation, Employer Requirements, checked .
Sorting out New Jersey workers' comp for your business
Tell Redoubt what the business does, who works in it, and what the New Jersey requirement in front of you says. We will say whether a policy, a waiver, or an exclusion fits.
This is general insurance information, not legal advice or a coverage determination. Statutes, agency instructions, policy forms, and the facts of the business control.
Workers’ comp requirements in every state
Each state page gives the employee threshold, the owner and officer exemptions, the penalty for going without, the rating bureau, the market, the enforcing agency, and the exemption filing, each with its statute or agency source.
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
The hub, and the New Jersey pages that go deeper
New Jersey workers’ comp FAQ
Do I need workers' comp in New Jersey with only one employee?+
Yes. N.J.S.A. 34:15-36 and 34:15-71 require coverage from the first employee who works for pay, part-time included. Only casual employment, work that is not regular, periodic, or recurring, falls outside the Act.
Does an LLC owner in New Jersey have to buy workers' comp?+
Not for themselves. LLC members who work in the business are not required employees, and the LLC needs a policy only once it has someone other than members performing services. Members can elect coverage on the application at purchase or renewal.
Can a New Jersey corporation exclude its officers?+
No filing removes them. The statute counts corporate officers as employees, and the Division says a corporation must insure whenever any individual, officers included, performs services for it for pay.
How do I find a New Jersey employer's experience mod or carrier?+
NJCRIB, the state's rating bureau, keeps each employer's coverage record and experience modification and offers online searches for both. The Division cross-matches NJCRIB's coverage records to find uninsured employers.