Feb 152015

After a NJ worker receives workers’ compensation benefits as a result of being injured in a workplace accident, he has to pay back a portion of the benefits to the workers’ comp carrier if he receives any financial compensation from a third party lawsuit.

In general, New Jersey’s workers’ compensation law provides that workers injured while at work in New Jersey cannot sue their employers if the accidents were caused by the employers’ negligence. However, their employers will pay for their medical expenses and a portion of wages lost as a result of the accidents.

However, if the workplace accidents are caused by the workers’ own negligence, they still get workers’ compensation benefits. Their employers cannot deny their workers’ compensation claims because the workers caused the accidents.

Related: Injured at Work in NJ? What to Know About NJ Workers’ Compensation

When a work accident is caused by a non-employer party (third party), the injured worker can file a personal injury lawsuit against that party, in addition to filing a workers’ comp claim. Third party lawsuits allow injured workers to financially recover for damages not recoverable in workers’ comp claims, such as pain and suffering. Though workers’ comp also provides lost income, it only provides a portion of a worker’s lost wages. Accordingly, the injured worker can make a claim for all lost wages, even those that were paid by via workers’ compensation. However, at the conclusion of the lawsuit, the injured worker will be required to reimburse the workers’ comp carrier for a portion of what it paid (medical benefits and lost wages).

More: Filing an Injury Lawsuit Beyond a Workers’ Compensation Claim in New Jersey

When an injured worker recovers financially from a third party, the workers’ comp carrier has a right to recover a portion of the benefits it paid on behalf of the worker. For instance, a worker is injured in a car accident while making a delivery to a client in Cherry Hill, NJ, and he makes a workers’ comp claim. The workers’ comp carrier pays $9,000 in medical expenses on behalf of the injured worker.

In addition, because the car accident was caused by another driver, he files a NJ car accident lawsuit against the at-fault driver. The case settles, and the injured worker recovers $60,000 from the at-fault driver.

Pursuant to NJ law, the workers’ comp carrier has a right to be reimbursed from the settlement proceeds. However, the workers’ comp carrier cannot recover 100% of the amount it paid out; the amount is reduced by 1/3 and $750 for litigation costs pursuant to NJ law. Therefore, the workers’ comp carrier has a right to receive a little over $5,000 from the settlement proceeds.

The 1/3 reduction essentially represents the attorney’s fees the workers’ comp carrier is responsible for, and the $750 is for the carrier’s share of litigation costs. But for the third party lawsuit handled by a NJ personal injury attorney, the workers’ comp carrier would not have been able to recover the benefits it paid on behalf of the injured worker. Therefore, the lien is reduced by 1/3 and its fair share of litigation costs.

Calculating workers’ comp liens can be complicated and having an experienced lawyer help an injured worker is crucial. Mr. Ciprietti is a NJ workers’ compensation lawyer with over 35 years of experience. If you were injured while at work, call Mr. Ciprietti to explore your legal rights. You may have a third party claim on top of a workers’ comp claim. FREE consultations. 856.983.8695


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