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What if I recover compensation from a third party based on my workplace injury?

In some workplace injury cases, an injured employee is eligible for compensation through multiple avenues. Typically, after an on-the-job injury, an injured worker can apply for workers’ compensation benefits. Because the New Jersey workers’ compensation program is not fault-based, an employee does not need to prove that their employer – or anyone else was at fault. However, the injury must have either occurred on the job, or be related to the performance of the employee’s job duties.

In some cases, an employee may pursue a personal injury claim against the at-fault party. While a workers’ comp claim is often an injured worker’s sole remedy against their employer, the worker can pursue a third-party personal injury claim against an at-fault third party. While many injured workers pursue both a workers’ compensation claim and a personal injury claim, workers’ compensation claims proceed much faster through the system. Thus, it is not unheard of for an injured worker to obtain workers’ comp benefit and then, months later, recover through a personal injury lawsuit.

When this occurs, an employer is typically entitled to a credit for the amount an injured worker receives through a third party. The amount of the credit will depend on the amount of the third-party settlement in comparison to the total workers’ comp benefits. For example:

When the third-party settlement amount is greater than the workers’ compensation benefits, the credit is typically two-thirds of the amount payable by the employer, less $750.00.

When the third-party settlement amount is less than the workers’ compensation benefits, the credit is typically two-thirds of the gross third-party settlement amount, less $750.00.

Where workers’ compensation benefits have not yet been paid, the amount owed to the worker by their employer will be reduced by the credit amounts. Those suffering from a recent workplace injury should reach out to a New Jersey workers’ compensation attorney to discuss their options.

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