Provides personal liability for owner, executive officer, or executive director of employer for failure to pay for workers' compensation coverage.
Summary
Assembly Bill 3724 amends New Jersey’s workers’ compensation laws to make certain individuals behind an employer personally responsible when the employer fails to secure required workers’ compensation coverage. The bill states that, in addition to the employer itself, a “principal owner” of the employer may be held jointly and severally liable for penalties assessed by the Division of Workers’ Compensation when an employer has not obtained coverage for an injured worker’s claim. The bill defines a principal owner broadly as a person who directly or indirectly has a beneficial ownership interest in, or the ability to control, the employer.
The bill also expands the uninsured employer’s fund’s ability to recover money it pays out on claims. If the fund pays compensation or benefits to an injured worker because the employer was uninsured, the fund would have subrogation rights against the employer and any principal owner, allowing it to pursue reimbursement from both. The measure leaves in place the existing surcharge system that finances the fund through assessments on workers’ compensation policyholders and self-insured employers, and it does not change the basic penalty amounts already imposed on uninsured employers: a $1,000 penalty plus an additional assessment of 15% of the award, capped at $5,000 per claim.
Impact
The bill would amend sections of P.L.1966, c.126, codified at C.34:15-120.1 and C.34:15-120.5, to extend liability beyond the employer to principal owners for unpaid workers’ compensation penalties and fund reimbursements. In practical terms, it would give the state a stronger collection tool against closely held or controlled businesses that fail to carry required coverage, and it could expose owners with control or beneficial interests to personal financial liability. It would also broaden the uninsured employer’s fund’s recovery rights, potentially increasing the fund’s ability to recoup payments made to injured workers and their dependents.
Sentiment
No committee transcripts or recorded votes were provided, so there is no documented debate or roll-call history to gauge legislative sentiment. Based on the bill text and sponsor statement, the measure appears to be framed as an enforcement and worker-protection bill aimed at improving compliance with workers’ compensation insurance requirements and protecting the uninsured employer’s fund. The overall tone of the proposal is remedial and accountability-focused rather than expansive in benefits.
Contention
The main point of contention is likely the expansion of liability from the employer entity to individual owners or controllers, which could be viewed by business interests as a significant increase in personal exposure, especially for small or closely held employers. The bill’s broad definition of “principal owner” may also raise questions about who qualifies as liable, including indirect owners or persons with control. On the other side, worker advocates and state enforcement interests would likely support the change because it strengthens collection of penalties and reimbursement for benefits paid when employers unlawfully fail to secure coverage.
Carry Over
Provides personal liability for owner, executive officer, or executive director of employer for failure to pay for workers' compensation coverage.