Workers' Comp Settlements in New Jersey

Most formal claim petitions are resolved by agreement. When a claim petition has been filed, the worker has a New Jersey attorney, and the case involves a dispute over jurisdiction, liability, causal relationship or dependency, the parties may agree to a lump-sum settlement (often called a Section 20 settlement). A judge of compensation may approve it, with the parties' consent, after hearing the worker's testimony and finding the settlement fair and just under all the circumstances. An approved Section 20 settlement acts as a dismissal of the claim, is final and binding on the worker and dependents, and gives up any further right to compensation or other benefits arising from the claim. Separately, an agreement between a worker and employer or insurer does not bar a formal decision on a claim unless it is approved in open court; when the only issue is the extent of disability, the parties may consent to an approved determination of the worker's present disability.

Temporary disability benefits are paid during the period of disability, but not beyond 400 weeks; the Division of Workers' Compensation explains that they usually end when the worker is released to return to work or reaches maximum medical improvement. Permanent total disability benefits are paid for 450 weeks. After 450 weeks, payments continue only if the worker has completed any rehabilitation ordered and shows that, because of the disability, he or she cannot earn wages equal to those earned at the time of the accident; any continued payments are reduced by the portion of former wages the worker can now earn and are subject to periodic review.

Claimants' attorneys in New Jersey workers' compensation cases may not charge fees in advance; fees are set by a judge of compensation only if benefits are awarded. Under R.S. 34:15-64 as amended by P.L. 2024, c. 55 (approved August 22, 2024, applying to claims pending on or after that date), the reasonable attorney fee may not exceed 25 percent of the judgment, and all claimants' counsel fees must be approved by the judge of compensation before payment. Fees may be paid by the injured worker and/or the employer or insurance carrier.