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  1. #1
    Join Date
    Jan 2011
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    1

    Default What Penalty Does an Employer Receive for Not Having Workers Comp Insurance

    My question involves workers compensation law for the state of: NJ

    We started a S Corporation in NJ - there are two owners and no other employees. Unfortunately we were led to believe that we did not need workers compensatoin insurance since we did not have any other employees other than the owners. We recently received a Cross Match form from NJ Dept of Labor - so we realized that we do need to have WC even though we did not have any employees. We procured WC insurance immediately. My question is will the state still penalize us for the period prior to the time we procured WC insurance. If so, what is the penalty likely to be. Does anyone have any similar experience that they can share with us.

    Thanks in advance for your response.

  2. #2
    Join Date
    Sep 2005
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    98,846

    Default Re: What Penalty Does an Employer Receive for Not Having Workers Comp Insurance

    The Department of Labor explains,
    Quote Quoting Consequences for Failure to Insure
    The consequences for failure to provide workers’ compensation coverage can be very significant, even without a work-related injury. Specifically, the law provides that failing to insure is a disorderly persons offense and, if determined to be willful, a crime of the fourth degree. Moreover, penalties for such failure can be assessed up to $1,000 for the first twenty days with additional assessments of $1,000 for each ten-day period of failure to insure thereafter. In the case of a corporation, liability for failure to insure can extend to the corporate officers individually. Penalties assessed for failure to insure are not dischargeable in bankruptcy.

    Where a work-related injury or death has occurred, the employer, including individual corporate officers, partners or members of an LLC, is directly liable for medical expenses, temporary disability and permanent disability or dependency benefits. In addition to awards for medical expenses and other benefits, New Jersey law also provides for civil penalties against the employer and its officers where failure to insure is determined. Awards and penalties arising from these claims can become liens against the uninsured employer and its officers, which are generally enforceable in the New Jersey Superior Court against any assets belonging to the uninsured employer and its officers.
    According to the PDF handbook for employers, that information may be out-of-date - it lists the potential fine numbers at $5,000.

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