On July 10, 2009, Governor Jon Corzine signed into law the “Egan & Quijano Bill” (A3569), amending the New Jersey Workers’ Compensation Fraud statute to provide for harsher penalties for employers found by the Director of the Division of Workers’ Compensation to have “knowingly failed to provide workers’ compensation coverage, misrepresented one or more employees as independent contractors, or provided false, incomplete or misleading information concerning the number of employees for the purpose of paying lower workers’ compensation premiums.”

First, the new law accelerates and raises the monetary penalties to be levied against employers for such violations, to $5,000 with an additional $5,000 penalty for each 10-day period that the employer is not in compliance with the law. Second, the new law also requires that the director promptly issue (within 72 hours) a “stop-work order requiring the cessation of all business operations at every site at which the violation occurred.” The stop-work order then remains in effect until such time as the director determines that the employer has “come into compliance” with its workers’ compensation requirements and has paid all monetary penalties that the director assesses pursuant to this and other laws. Finally, the law also provides that employers found to have knowingly violated workers’ compensation requirements are guilty of a crime in the fourth degree.