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Chapter 1: It’s the Law: NJSA 34:15.1

In 1911, New Jersey became one of the first states to enact a workers compensation law and is generally considered to have one of the most balanced laws of any major state.  While the New Jersey Workers Compensation Court is employee-oriented, the law also gives employers important controls to reduce fraud and abuse.

Workers compensation is a no fault program that provides benefits to employees for occupational injuries and illnesses.  With rare exceptions, the question of who caused the accident is not even considered when determining workers compensation benefits.  The only relevant issues are: (1) Was the employee’s injury due to a job related accident or exposure; and (2) how seriously was the employee injured.  The employee’s “sole” recourse against the employer is workers compensation unless the employer intentionally caused the accident.  Recent court decisions have held that deliberately violating safety standards can now be considered as an “intentional wrong” opening the door to additional litigation.   

Under the law, employees injured on the job are entitled to necessary medical care, temporary disability benefits, and compensation for permanent disability.  The law allows the employer (or the employer’s insurer) to contract with a managed care organization (MCO) to provide medical treatment.  This is a critical control to prevent abuse. 

While disabled from work, the employee also receives temporary benefits in the amount of 70% of the employee’s earnings up to the state-average weekly wage.  As a practical matter, public sector employers almost always continue the employee’s full wage during the temporary disability period.  Temporary benefits stop when the doctor certifies that the employee has reached “maximum medical improvement” (MMI) even if the employee still cannot return to work.  At this point, the employee receives a disability award based of the extent of permanent disability.  In recent years, workers compensation costs have dramatically increased because these awards have become very substantial.

The New Jersey Department of Labor, Division of Workers Compensation enforces the law.  In addition to workers compensation, the Department of Labor administers the Public Employee Occupational Safety and Health Act (PEOSHA) that establishes safety standards for local governmental employees.  The Department requires all local governmental employees to receive extensive safety training. PEOSHA has over twenty-five safety professionals that inspect for compliance with its safety and training regulations.  Under the act, PEOSHA can fine local governments up to $7,000 per day for willful and repeat violations of its standards.