Frequently Asked Questions (FAQs) - Workers' Compensation

What are the insurance requirements?
Who must insure?
What are the penalties for failure to insure?
What is the Insurance Cross Match Program?

What are the insurance requirements?

The NJ Workers’ Compensation Law, (NJSA 34:15-1 et seq.), requires that all employers operating in NJ, provide for the payment of obligations to injured employees or to dependents of deceased employees. Provision for such payment may be made in one of two ways:

Workers’ Compensation Insurance Policy written by a mutual or stock carrier authorized to write risk in New Jersey. Premiums for such insurance are generally based upon the classification(s) of the work being performed by employees and the payroll of the employer.

Self Insurance through application to and approval by the Commissioner of the Department of Banking & Insurance. Approval for self-insurance is based upon the financial ability of the employer to meet its obligations under the law and the permanence of the business. The posting of security for such obligations may be required.

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Who must insure?

Corporations – All corporations operating in NJ must obtain WC insurance or be approved for self-insurance as long as any one or more individuals, including corporate officers, receives compensation for services to the corporation. There is no minimum payroll or single-officer exemption.

Partnerships/LLC's – All partnerships and Limited Liability Companies (LLC's) operating in NJ must obtain WC insurance or be approved for self-insurance as long as any one or more individuals, excluding partners or members of the LLC, receives compensation for service. There are no exclusions for family members or minimum payroll.

Sole Proprietorship – All sole proprietorships operating in NJ must obtain WC insurance or be approved for self-insurance as long as any one or more individuals, excluding the business owner, receives compensation for service. There are no exclusions for family members or minimum payroll.

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What are the penalties for failure to insure?

Failure to provide the required workers’ compensation insurance coverage is a disorderly persons offense and, if such failure shall be determined to be willful, a crime of the fourth degree. Penalties for failure to provide such coverage are up to $1,000 for the first twenty days and up to $1,000 for each ten days thereafter.

If you are aware of an uninsured employer, you may provide this information to the Office of Special Compensation Funds by e-mail, by calling (609) 292-0165 or by completing a "Report of Non-Compliance" form. You need not identify yourself but you should be prepared to provide the name and exact address of the employer and, if possible, the names of the principle operators of the business.

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What is the Insurance Cross Match Program?

The Office of Special Compensation Funds, on a regular basis, conducts a cross-match of their database with the Department of Banking & Insurance's Compensation Rating & Inspection Bureau (NJ CRIB), to identify uninsured employers. Once an employer is identified through this cross match, a letter and a cross-match response form is issued.

If you are an employer that has received this form, you should provide the requested information as soon as possible to ensure that penalties are not improperly assessed against you.

Questions in relation to the Cross-Match Program can be addressed to:

Office of Special Compensation Funds
Cross Match Program
P.O. Box 399
Trenton, NJ 08625-0399
Fax (609) 633-7783, (609) 984-2515 or (609) 292-7294
oscf@dol.state.nj.us

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