34:15-120.1. Creation; administration, maintenance and disbursement; penalties on employers .
a. There is hereby created a fund which shall be known as the "uninsured employer's fund" to provide for the payment of awards against uninsured defaulting employers who fail to provide compensation to employees or their beneficiaries in accordance with the provisions of the workers' compensation law, R.S. 34:15-1 et seq.
The fund shall be administered, maintained, and disbursed by the Commissioner of Labor as hereinafter provided.
b. (1) For the purpose of establishing and maintaining this fund, the Commissioner of Labor shall impose on January 1, 1989 and on the first day of each year thereafter, except as provided below, an annual surcharge upon each workers' compensation policyholder and employer's liability insurance policyholder and each self-insured employer insured pursuant to R.S. 34:15-77. Each workers' compensation and employer's liability insurance policyholder and self-insured employer shall be liable for payment of the annual surcharge in accordance with the provisions of this section and all regulations promulgated pursuant thereto. The annual surcharge imposed under this section shall apply to all workers' compensation and employer's liability insurance policies written or renewed or, in the case of self-insured employers, to coverage provided on or after January 1, 1989. However, the surcharge shall not apply: to any reinsurance or retrocessional transaction; to the State or any political subdivision thereof which acts as a self-insured employer; or to any workers' compensation endorsement required pursuant to section 1 of P.L.1979, c. 380 (C. 17:36-5.29).
If the Commissioner of Labor determines, pursuant to paragraph (2) of this subsection b., that the "uninsured employer's fund" will have to its credit a sum in excess of $500,000.00 at the end of any calendar year, the annual surcharge shall be suspended for the next following year and its collection not resumed until the calendar year immediately following any calendar year in which the balance in the fund is reduced below $500.000.00.
(2) For the calendar year 1989, the total amount of the surcharge levied by the commissioner shall be $500,000.00. On September 1 of 1989 and of each year thereafter, the Commissioner of Labor shall estimate the amount of benefits that have been paid and will be paid from the "uninsured employer's fund" during that calendar year, and shall calculate in consultation with the Commissioner of Insurance, the total amount of the annual surcharge for the "uninsured employer's fund" to be levied during the next following calendar year upon all workers' compensation and employer's liability insurance policyholders and self-insured employers pursuant to paragraph (1) of this subsection b. The total amount of the annual surcharge shall equal 150% of the moneys estimated by the Commissioner of Labor to be payable from the "uninsured employer's fund" during the calendar year preceding the year during which the annual surcharge will be imposed.
(3) The total amount of the annual surcharge calculated pursuant to paragraph (2) of this subsection b. shall be added to the aggregate annual surcharge amount to be levied upon and apportioned among all workers' compensation and employer's liability policyholders and self-insured employers pursuant to R.S. 34:15-94, and be levied and apportioned in the same manner as the annual surcharge for the Second Injury Fund as provided in R.S. 34:15-94 The surcharge to be collected from policyholders and self-insured employers pursuant to this section shall, however, be stated separately on the policy or billing statement and the amount of the surcharge as applied pursuant to this section shall not be subject to reduction for special adjustment and supplemental benefits paid or payable under the workers' compensation law, R.S. 34:15-1 et seq.
(4) As used in this subsection, "policyholder" means a holder of a workers' compensation and employer's liability insurance policy issued by an insurer that is a domestic, foreign or alien mutual association or stock company writing workers' compensation or employer's liability insurance on risks located in this State and subject to premium taxes pursuant to P.L.1945, c. 132 (C. 54:18A-1). "Self-insured employer" means an employer which self- insures for workers' compensation or employer's liability insurance pursuant to the provisions of R.S. 34:15-77.
(5) All moneys collected pursuant to this section shall be deposited in the "uninsured employer's fund." Collection of the annual surcharge shall be under the authority of the Commissioner of Labor as defined in R.S. 34:15-94.
c. The Director of the Division of Workers' Compensation upon rendering a decision with respect to any claim for compensation under chapter 15 of Title 34 of the Revised Statutes that the employer liable therefor has failed to secure the payment of compensation with respect to a claim in accordance with R.S. 34:15-71 OR R.S. 34:15-72 , shall impose a penalty of $1,000.00 against the employer and direct its payment into the "uninsured employer's fund" in connection with each such claim. The director shall also impose an additional assessment of 15% of the award or awards made in each claim. This additional assessment shall not exceed, however, the sum of $5,000.00 on any one claim, and shall be paid into the "uninsured employer's fund."
If the employer fails to pay these assessments into the fund within 10 days after date of mailing of notice thereof to him, this shall constitute a default in payment of compensation due pursuant to the provisions of the workers' compensation law, R.S. 34:15-1 et seq., and judgment therefor shall be entered in accordance therewith.
All sums collected from an uninsured defaulting employer with respect to any claim for compensation referred to in this section but not payable from the fund, whether such collection is made prior or subsequent to entry of judgment against the employer, shall be deemed in payment of and applicable first in satisfaction of any compensation and benefits due from the employer with respect to the claim and security demand, if any, in connection therewith and only when the obligations are satisfied in full shall the balance of said sums collected, if any, be deemed payment in satisfaction of and applicable to the assessments above prescribed in this section.
All sums recovered from uninsured defaulting employers on judgments entered for failure to pay assessments as hereinafter provided and for failure to pay compensation and benefits which were paid from the "uninsured employer's fund," shall upon recovery be paid into that fund.