In New Jersey, almost every business with at least one employee must carry workers compensation before that person's first day, and there is no minimum number of workers that lets you skip it. Workers comp is the insurance that pays an injured worker's medical bills and part of their lost wages, and in New Jersey it is required under the state's Workers' Compensation Law (R.S. 34:15-71 and 34:15-72).
Who this is for: New Jersey business owners who want a plain-English answer to whether they need workers comp at all, and who counts as an employee under the state's rules. If you need the answer for one specific setup, such as an LLC or a business that only hires 1099 contractors, use the companion guides linked below.
The short version
- One employee is the trigger. New Jersey sets no headcount minimum, so coverage is required from your first employee, whether full-time, part-time, or seasonal.
- Owners are treated by business type. Sole proprietors, partners, and LLC members are left out by default; corporate officers are automatically covered and cannot opt out.
- The regulator is the Division of Workers' Compensation, part of the New Jersey Department of Labor and Workforce Development.
- Going without is expensive. Penalties run up to $5,000 for the first 10 days uninsured and up to $5,000 for each 10 days after, plus possible criminal charges and a stop-work order.
- No state fund here. You buy from any private insurer the state authorizes, and Morrow shops several to fit your trade and budget.
Who counts as an employee in New Jersey?
New Jersey defines an employee broadly: any person who performs services for pay, including corporate officers. There is no carve-out for part-time or seasonal help. The only real exception is genuinely casual work, meaning a job that comes up by chance or is not regular, periodic, or recurring. Family members and household workers are not automatically exempt.
How owners are treated by business type
The one place the answer changes is who owns the business. New Jersey leaves most owners out of coverage by default but treats corporate officers the opposite way.
| Your setup | Are the owners covered by default? | Must you cover employees? |
|---|---|---|
| Sole proprietor | No, left out unless you elect in | Yes, from the first employee |
| Partnership or LLP | No, partners left out unless the firm elects in | Yes, any non-partner employee |
| LLC | No, members left out unless the LLC elects in | Yes, any non-member employee |
| Corporation (C-corp or S-corp) | Yes, active officers are covered and cannot opt out | Yes, all employees |
| Nonprofit | Paid staff are employees; volunteers usually are not | Yes, any paid employee |
What if I only use contractors or family?
Two situations trip up New Jersey owners. First, labeling a worker a 1099 contractor does not settle it. New Jersey decides employee status with a common-law test that looks at how much control you have over the work and how central the work is to your business, not the ABC test used for unemployment and wage law. If the person is really an employee, they must be covered. Second, family members who work for pay are employees too, unless the work is truly casual.
A quick New Jersey example
Illustrative, not a quote. A Newark bakery run as an LLC has two members and hires one part-time counter clerk for weekend mornings. The members are left out of the policy by default, but the clerk, even at eight hours a week, must be covered from her first shift because New Jersey has no part-time exception. The owners buy a policy for her, and when she slips on a wet floor and sprains a wrist, the policy pays her treatment and part of her lost wages. Had they skipped coverage, the state could have assessed a penalty of up to $5,000 for the first 10 days uninsured and issued a stop-work order closing the shop.
Real questions New Jersey owners ask
Does New Jersey require workers comp if I have just one employee?
Yes. New Jersey sets no minimum number of employees, so coverage is required from your very first employee, whether they work full-time, part-time, or seasonally. The only narrow exception is genuinely casual work.
I am the only person in my business. Do I need workers comp?
It depends on your business type. A sole proprietor, partner, or LLC member with no other workers is not required to carry a policy, though you can elect coverage for yourself. A corporation with an active officer must carry coverage even if that officer is the only worker.
Are part-time and seasonal workers counted?
Yes. New Jersey does not exempt part-time or seasonal staff. Anyone who performs services for pay counts, so even a single seasonal hire triggers the coverage requirement.
Do 1099 contractors count as employees in New Jersey?
Sometimes. New Jersey uses a control and relative-nature-of-the-work test for workers comp, not the ABC test. If you direct how and when the work is done and it is part of your regular business, the worker is likely an employee who must be covered.
Who enforces workers comp in New Jersey?
The Division of Workers' Compensation, part of the New Jersey Department of Labor and Workforce Development. It administers the law and can issue stop-work orders and penalties against uninsured employers.
What does workers comp actually pay for?
It pays an injured employee's medical treatment for the work injury and replaces part of their lost wages while they recover. It also protects you, because a covered claim generally cannot be turned into a lawsuit against your business.
Is there a state-run insurer I have to use?
No. New Jersey has no state fund. You buy from any private insurer authorized in the state, and if no insurer will take you voluntarily, you can get covered through the state's assigned-risk plan.
Why New Jersey owners choose Morrow
- We shop the right market for you. New Jersey is an open, competitive market with no state fund, so coverage comes from any of the private insurers the state authorizes, and Morrow shops several of them to fit your trade and budget instead of leaving you with one option.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related New Jersey guides
Every New Jersey business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in New Jersey (start here)
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Hiring your first employee: what changes
- What workers comp does not cover
- Contractor workers comp in New Jersey
This guide is general information, not legal advice. New Jersey rules and penalty amounts can change, so verify current requirements with the New Jersey Division of Workers' Compensation or a licensed advisor before you rely on them. Last updated: July 2026.