What insurance is required when hiring workers?

Required Insurance When Hiring Employees in New Jersey

When hiring employees in New Jersey, businesses must secure specific types of insurance to comply with state regulations and protect both the company and its workforce.

Workers' Compensation Insurance

Workers' compensation insurance is mandatory for nearly all employers in New Jersey who have at least one employee. This insurance covers medical expenses and lost wages if an employee is injured or becomes ill due to work-related activities.

• Obtain coverage before employees begin work to avoid penalties.
• Maintain accurate payroll and employee records to support premium calculations.
• Renew policies annually and report any changes in employee count or payroll.

Unemployment Insurance

New Jersey requires employers to pay into the unemployment insurance system. This insurance provides temporary financial assistance to employees who lose their jobs through no fault of their own.

• Register with the New Jersey Department of Labor and Workforce Development upon hiring employees.
• File quarterly wage and tax reports to maintain compliance.
• Monitor unemployment tax rates, which may vary based on your business’s claims history.

Disability Insurance

New Jersey mandates that employers provide temporary disability insurance (TDI) coverage for employees who are unable to work due to non-work-related illness or injury.

• This insurance is typically obtained through the state program.
• Provide employees with information about their rights under the TDI program.
• File required reports and maintain records related to disability claims.

Additional Operational Considerations

• Health Insurance: Depending on the size of your business, you may need to comply with federal requirements such as the Affordable Care Act (ACA).
• Employee Classification: Properly classify workers as employees or independent contractors to determine insurance obligations accurately.
• Recordkeeping: Maintain thorough records of insurance policies, employee coverage, and claims to ensure compliance during audits or inspections.
• Automation: Use payroll and compliance software to track insurance requirements and deadlines efficiently.

As of 2026, regularly review New Jersey state guidelines to stay updated on any changes to insurance requirements when hiring employees.