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Why more people aren’t filing for workers’ compensation benefits

Workers’ compensation insurance should provide a safety net for employees who are hurt on the job in New Jersey. After an injury, this system should cover medical costs and a portion of lost wages. According to the U.S. Department of Labor, of the injured workers who qualify for benefits, less than 40 percent apply. Those with job-related illnesses are even less likely to receive benefits; estimates of those who are not compensated for their illness go as high as 97 percent.

Unethical employers are part of the problem. Because independent contractors are not eligible for benefits, many employers misclassify their employees. This practice is particularly widespread in the construction industry, where it is common for companies to contract out the labor rather than hiring and training their own employees. Other companies use temporary employees for their most dangerous jobs. Although these workers should be covered by workers’ compensation insurance, fear of putting their job prospects in danger may keep them from reporting injuries and filing a claim.

Employees may not file because no one informs them that they have a right to benefits. Immigrants are particularly unlikely to file a claim or report an injury, as this could draw unwanted attention to their status.

ProPublica notes that several investigations have identified changing laws as another issue. Many of these changes have created barriers that discourage workers from filing. Consequently, they often feel that applying will not do any good. As a result of the challenges, many families live in poverty, and the cost of health care is absorbed by taxpayers rather than the insurance companies who should cover the injuries.

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