Coverage hinges on connection between overseas employees, state
International School Services, Inc. v. New Jersey Dept. of Labor and Workforce Development, et al., No. A-5722-07T35722-07T3 (N.J. Super. Ct. App. Div. 07/10/09).
The New Jersey Superior Court, Appellate Division reversed a finding that a nonprofit organization that hired workers to teach in foreign countries was required to provide workers' compensation coverage. It remanded the case to determine whether each worker had sufficient contacts with New Jersey to support a workers' compensation claim.
What it means: In New Jersey, a nonprofit organization is not required to provide workers' compensation coverage to teachers it hires in foreign countries.
A nonprofit school sought to obtain workers' compensation coverage for its overseas teachers. Its insurer declined to provide voluntary coverage in certain countries after a string of workers' comp claims. The school sued the state Department of Labor and Workforce Development, the Department of Banking and Insurance, and the Coverage Rating and Inspection Bureau for a judgment declaring whether it had to provide workers' compensation coverage to all its overseas employees. The Appellate Division pointed out that the overseas employees did not have "sufficient contacts" with New Jersey to make workers' compensation coverage mandatory. However, it remanded the case for the court to consider the appropriate factors in determining whether the school was required to provide coverage to its overseas employees.
The court looks at these six factors in determining whether an employee has sufficient contacts to make workers' comp coverage mandatory: 1) where the injury occurred; 2) where the contract was made; 3) where the employment relationship exists; 4) where the industry is localized; 5) where the employee resides; or 6) the place whose law is expressly stated by contract. The court noted this assessment is made on a case-by-case basis.
Although the program was administered from New Jersey, none of the teachers were New Jersey citizens and all of their work was conducted overseas. The court remanded the case, explaining that if the school can show none of its overseas employees have sufficient contacts with New Jersey to support a workers' comp claim, the school is not obligated to maintain coverage.
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August 27, 2009
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