Can you get workers’ comp if your employer has closed its doors?

The past two years have left many businesses struggling. A significant number of New Jersey’s small businesses didn’t survive 2020. When a business has to close its doors, its employees suffer. However, workers’ compensation benefits shouldn’t be a casualty.

If you have filed a workers’ comp claim or are already getting benefits after a workplace-related injury or illness, your benefits should not be affected. That’s because these benefits typically aren’t paid directly by employers. They’re paid by the workers’ comp insurer for the employer.

New Jersey law and workers’ comp coverage

Under New Jersey law, any employer that isn’t covered by a federal program is required to either have a workers’ comp insurance policy through an approved insurance provider or be approved by the state to have self-insurance.

For a business to be approved for self-insurance, it must demonstrate its ability to “meet its obligations under the law and the permanence of the business,” according to the New Jersey Department of Labor and Workforce Development, Further, “The posting of security for such obligations may be required.” Even those businesses that are self-insured typically contract with an insurance provider to handle claims.

That doesn’t mean there won’t be complications

The chances of losing your access to workers’ comp benefits for something that occurred while the business was still open are slim. However, if your claim is still being reviewed when your employer closes its doors, the insurer might experience delays in its investigation. That’s particularly true if the business owners aren’t responsive to their queries or can’t be found.

Further, if you’re already receiving benefits and have been unable to do your previous job, it can be more complicated for the insurer to determine when you’ll be able to work again if that job (or any other with the company) is no longer there.

If you’re experiencing issues around getting or keeping your workers’ compensation benefits because your employer has gone out of business, it may be helpful to seek legal guidance.