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New Jersey Legislation Gives Break to S Corporations With New Bill

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Proposed New Jersey Legislation Gives S Corporations A Break

An interesting Bill that is now proposed  New Jersey Legislation would give S Corporations that are micro-companies a break on having to acquire Workers Comp coverage.   Some states such as West Virginia require even micro-employers to have Workers Comp coverage.

J&L Risk Management Consultants, the corporation that provides this website and over 2,000 free articles has been an S-Corp since its inception in 1996.

New Jersey Legislation Map

A micro-company is defined as:

All micro-businesses are small businesses. The only difference is a micro business is a subset of the small business community based on the number of employees within the company. While your company can technically be considered a small business even if it has dozens of employees, your business is a micro business if you employ less than six people. If you are a sole trader, self-employed, or have no employees, you operate a micro business. There are other guidelines that can also define whether your company is micro or small. If your company required less than $50,000 to start or if your company does not access traditional capital loans, you are running a micro business.

I tend to define a micro-company as a one-person company.  The above definition from Intuit says 6 or less.  A clause from the new Bill can be found below.

I first heard the term micro-company from a Clark.com podcast.   Clark Howard defined his business as a one-person company better known as a micro-company.

If you are a New Jersey small business, please use the first link in this article for a full copy of the pending Bill.

Changes to Workers Comp Laws – New Jersey Legislation

21 “S corporation” means a corporation included in the definition of
21 an “S corporation” pursuant to section 1361 of the federal Internal
22 Revenue Code of 1986, 26 U.S.C. s.1361.
23 (cf: P.L.1999, c.383, s.1)
24
25 2. This act shall take effect on the 180th day following
26 enactment and apply to all policies issued on or after that date.
27
28
29 STATEMENT
30
31 This bill revises the definition of “employee” in the workers’
32 compensation law, R.S.34:15-1 et seq., to permit an S corporation that
33 has only one individual who performs services for the corporation and
34 is the only shareholder in the corporation to choose whether or not to
35 obtain workers’ compensation coverage.

The New Jersey Legislation would not go into effect until 6 months after it is passed and signed by the Governor.  The old legislation would stay in effect until that date.

 

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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