Overview Of The New Jersey Workers’ Compensation System

The New Jersey Workers’ Compensation Act offers injured employees three primary types of benefits:

1. Medical Treatment: Coverage for medical care directly related to the work injury.
2. Temporary Disability Benefits: Payments of up to 70% of the employee’s wages while they are unable to work and are under the care of a doctor.
3. Permanent Disability Benefits: Compensation for partial or total permanent disability if there is objective evidence of an enduring loss of function.

Medical Benefits

The workers’ compensation insurance carrier is responsible for covering 100% of all medical treatment related to the injury, with no co-payments or deductibles required from the employee. However, this treatment must be pre-approved by the employer’s workers’ compensation carrier. A potential drawback for injured employees is that the employer’s carrier selects the treating physician.

Temporary Disability Benefits

The Workers’ Compensation Act entitles employees to receive 70% of their average weekly wage, up to the state maximum, during the period when the authorized treating physician determines they are unable to work and require active medical treatment. This average weekly wage is calculated based on the employee’s gross wages before taxes and is typically, though not always, averaged over the six months immediately preceding the date of the accident. The average wage includes all overtime, commissions, and bonuses paid during that six-month period. For accidents which occurred in 2024, the state minimum temporary disability rate is $302 per week, and the maximum temporary disability rate is $1131 per week. The maximum and minimum temporary disability rates change every year, based upon the state average weekly wage.

Permanent Disability Benefits

After the injured worker has been discharged from medical treatment, the claim moves into the permanent disability phase. To secure the right to permanent disability benefits, a Claim Petition must be filed with the Division of Workers’ Compensation (DWC) within two years of the last benefit payment made by the workers’ compensation insurance carrier (see sample Claim Petition in Appendix A). The majority of injured workers in New Jersey do NOT take advantage of this benefit, because they fail to retain an attorney.

Filing the Claim Petition initiates an adversarial proceeding in the DWC between the injured worker, referred to as the “petitioner,” and the employer, referred to as the “respondent.” To assess the petitioner’s degree of permanent disability, both the insurance carrier and the petitioner’s attorney engage medical experts familiar with the New Jersey disability schedule. These experts typically provide exaggerated estimates of the disability for the purposes of facilitating a more favorable settlement for the party which retained them. Most claims settle prior to trial, at a percentage of permanent partial disability benefits somewhere between the estimates of the medical experts.

The workers’ compensation system in New Jersey is far from perfect. Especially when the employer does not carry the required insurance coverage, injured employees often face significant delays in accessing treatment and benefits. For most claimants with minor injuries, the process typically operates smoothly and fairly. However, for those with more serious injuries, the quality of care can be disappointing, as treatment is often micromanaged by insurance bureaucrats, whose main goal is to patch you up quickly in order to stop your benefits. If you fall into this category, securing competent legal counsel early in the process is crucial.