How is Workers’ Compensation Calculated in New Jersey?

If you were injured on the job in New Jersey, you may be wondering how much you are entitled to receive through your employer’s workers’ compensation and how those benefits are calculated. Understanding how payments are determined is crucial to protecting your financial stability after enduring a work-related accident and injury. Continue reading for more information and consult with a knowledgeable Warren County workers’ compensation lawyer today.

What is Workers’ Comp?

Workers’ compensation (casually referred to as ”workers’ comp”) is a form of insurance that provides wage replacement and medical benefits to employees who suffer injuries or illnesses as a result of their job. It is a no-fault system, meaning that benefits are generally available regardless of who was at fault for the injury, whether it was the employee, the employer, or a co-worker. In exchange for receiving these benefits, employees typically give up the right to sue their employer for negligence related to the workplace injury.

The goal of workers’ compensation is to ensure that injured workers quickly receive necessary medical care and financial support during their recovery. Potential benefits in New Jersey can include coverage for all reasonable and necessary medical treatment related to the work injury. This includes doctor visits, hospital stays, prescriptions, and rehabilitation services. Additionally, if the injury prevents the employee from working for a period, temporary disability benefits are available to replace a portion of lost wages. For severe injuries resulting in permanent impairment, employees may also be entitled to compensation for that permanent disability, even if they return to work. Death benefits are provided to dependents if a worker dies as a result of a work-related incident.

How is Workers’ Compensation Calculated in New Jersey?

Temporary Disability Benefits:

Temporary disability benefits are calculated based on the employee’s average weekly wage (AWW) earned in the weeks leading up to the injury. In New Jersey, the benefit rate is 70% of the AWW, subject to a maximum and minimum weekly rate, which are adjusted annually. These payments continue until the employee returns to work or reaches maximum medical improvement. Benefits begin after a 7-day waiting period under New Jersey law.

Permanent Disability Benefits:

Permanent disability benefits in New Jersey are paid out after an employee reaches maximum medical improvement (MMI) and temporary disability benefits end. This compensation addresses lasting physical or functional loss. Permanent partial disability (PPD) is calculated based on a percentage of disability determined by either settlement or a set by a Judge following a Trial. The final permanent disability award is based upon a schedule of disabilities based upon the body part injured, which changes annually. The percentage of disability is then multiplied by a set number of weeks and a weekly compensation rate defined by the statute and the employee’s wage. These benefits are paid to compensate for the reduction in an employee’s functional capacity, even if they return to work.

Permanent total disability (PTD) benefits are awarded when the injury permanently and totally prevents the employee from performing any gainful employment. PTD is paid at 70% of the employee’s average weekly wage, similar to temporary disability, but continues for a period of 450 weeks. After 450 weeks, payments may continue for life if the worker demonstrates they remain totally disabled and unable to work.

Workers’ compensation laws can be complex, so it is highly recommended that you work with an experienced attorney for legal guidance during this time.