Many injured workers assume workers’ compensation is their only option. For a claim against their own employer, that is usually true. But if another person or company caused the injury, New Jersey law may allow a separate third-party claim. This claim can provide compensation for losses that workers’ comp does not cover.
Workers’ compensation covers necessary medical treatment and provides benefits for eligible workers who lose wages or develop a permanent disability because of a work injury. Temporary disability benefits generally replace 70% of your average weekly wages, subject to state limits. These benefits do not require you to prove that your employer was negligent.
Under N.J.S.A. 34:15-8, you generally cannot sue your employer for negligence when workers’ compensation covers your injury. A narrow exception applies to an employer’s intentional wrong, but ordinary carelessness does not meet that standard. Coworkers also generally have protection from negligence lawsuits for injuries they cause while working for the same employer.
Workers’ comp does not pay for pain and suffering. Its wage benefits also have limits, which can leave a serious financial gap when an injury prevents you from returning to your trade or earning your previous income.
You may be able to file a third-party claim if a person or company other than your employer or a protected coworker is legally responsible for your injury. N.J.S.A. 34:15-40 allows an injured worker to pursue a responsible third party while also receiving workers’ compensation benefits.
On a job site, a third party might be a general contractor who failed to address a safety hazard, a subcontractor whose crew created a dangerous situation, a manufacturer of defective equipment, or a negligent property owner. Whether you have a claim depends on that party’s legal responsibility and how their actions or product caused your injury.
The same rule can apply outside construction. For example, a delivery driver may have a claim against another driver who caused a crash, or a warehouse worker may have a claim against the manufacturer of a defective machine.
Most third-party injury lawsuits are subject to the two-year deadline to file under N.J.S.A. 2A:14-2. Exceptions can affect the deadline, so it is important to confirm which rules apply to your case.
Identifying the responsible parties early also helps preserve evidence. Equipment may be moved, hazards may be repaired, and job site conditions may change within days of an injury.
A third-party claim can seek compensation for pain and suffering, lost earnings, and a reduced ability to earn income in the future. Unlike workers’ comp wage benefits, lost earnings in a personal injury case are based on your proven losses rather than a set weekly benefit limit.
For a worker who can no longer perform a skilled trade, future income losses may be substantial. A third-party claim can account for how the injury affects the worker’s ability to earn a living over time.
You can pursue both claims at once. Workers’ comp can help cover treatment and replace part of your wages while the third-party case moves forward. However, the two claims must be coordinated because you generally cannot recover twice for the same losses.
If your employer or its workers’ comp insurer pays benefits and you later recover money from a third party, N.J.S.A. 34:15-40 generally gives the employer or insurer a right to reimbursement. This right is commonly called a workers’ comp lien. It affects how much of the settlement or court award you keep.
The statute provides reductions for attorney fees and lawsuit expenses, subject to specific limits. A third-party recovery can also affect future workers’ comp payments. Handling both claims together helps ensure that these amounts are calculated correctly.
In some cases, the insurer may agree to reduce its lien further. That reduction is not guaranteed, so any proposed agreement should be confirmed before the recovery is distributed.
At The Law Offices of Sander Budanitsky, L.L.C., we identify responsible third parties and help coordinate your workers’ compensation and third-party claims. Attorney Sander Budanitsky has represented injured New Jersey clients since 1996.
We offer free consultations, and you owe no attorney fees unless we recover compensation for you.
Call us at (908) 241-3445 to discuss your workplace injury and the deadlines that apply to your case.
You generally cannot sue your employer or a protected coworker for negligence when workers’ compensation covers your injury. However, you may be able to sue a responsible third party, such as a contractor, property owner, driver, or equipment manufacturer.
A third-party claim can provide compensation for pain and suffering and seek your proven past and future lost earnings. Workers’ comp does not cover pain and suffering and replaces only part of your wages. If workers’ comp benefits were paid, a reimbursement lien generally applies to the third-party recovery.
Reviewed by Sander Budanitsky, Esq., admitted to the New Jersey Bar in 1996.
Last reviewed: October 2026
This article is for general information only and is not legal advice. Reading it does not create an attorney-client relationship. For advice about your specific situation, consult a licensed New Jersey attorney.
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