New Jersey Reforms Workers
Nov 2008
(November, 2008 Livingston, NJ) Governor Jon Corzine has signed a package of five bills lawmakers hope will strengthen the state's workers' compensation system to better protect workers injured on the job.
The package of bills represents a substantial reform of the New Jersey’s workers' compensation insurance system, which in 2007 had nearly 200,000 work-related accidents. The reform package includes measures such as boosting public representation on the board that sets premiums and granting enhanced authority for judges of compensation to enforce their decisions.
The five bills comprising the reform package are:
1. S1917/A2969, which revises membership of the Compensation Rating and Inspection Bureau and further clarifies its authority. Public representation on the governing board is expanded by three members representing labor, business and the general public.
2. S1916/A2968, which ensures that workers ‘ compensation cases involving emergent medical issues are heard in a timely manner and that treatment and compensation, is delivered when it is needed. As a result, claims involving a worker who is denied medical treatment will be prioritized when a doctor certifies that immediate care is needed.
3. S1915/A3059, which ensures that all eligible workers are covered by their employers by requiring employers to submit proof of workers' compensation coverage on their annual reports filed with the Department of Treasury.4. S1914/A2967, which strengthens enforcement against employers for failure to provide workers' compensation coverage. Employers who fail to provide workers' compensation will be subject to enhanced administrative and criminal penalties.
5. S1913/A2966, which increases the power of judges of compensation and provides them with the necessary tools to enforce workers' compensation law against insurers, employers or attorneys who fail to comply with a judge's orders or deadlines.
A legislative hearing earlier in the year found that thousands of workers in New Jersey lacked workers’ compensation insurance which is required by law. John Sarno, president of the Employers Association of New Jersey (EANJ) notes that many workers lack such insurance because they are misclassified as independent contractors.
“If a worker is designated as an independent contractor but is substantially ‘controlled’ in the conduct of work duties, then the worker could an employee for workers’ comp purposes,” according to Sarno.
Generally, control issues involve a person's work schedule, whether or not they are trained for job tasks by the employer, and whether or not the performance of their job duties is largely dependent on resources made available by the employer.
”In other words, if the individual is largely dependent on the employer in order for work duties to be accomplished, the individual is probably an employee, even if on paper they are designated as an independent contractor, “ says Sarno.
Under the new reform, employers that knowingly fail to provide workers’ compensation insurance to employees can be charged with a crime of the fourth degree. But Sarno does not think that the law has criminalized the mistaken classification of an employee as an independent contractor.
“As long as the employer is acting in good faith and has made a good faith error, they will not be prosecuted under the reform law. The law was designed to punish firms that knowingly and systematically misuse independent contractor status to get around the law, including the tax laws,” he says.
According to the new law, where the employer is a corporation, any officer who is actively engaged in the corporate business, including but not limited to, the president, vice-president, secretary or treasurer, can be personally liable.
