Workers' Compensation: Workers' Compensation Gets Modernized

Governor Murphy Signs Historic Update to 70-Year-Old Board and Lodging Valuation Law

NJ Governor Phil Murphy has signed into law S-3772/A-5198, bringing New Jersey's workers' compensation system into the 21st century by modernizing how employers value board and lodging for injured workers.

What Changed?

For decades, New Jersey's workers' compensation law valued employer-provided board and lodging at a flat $25 per week — a figure that hasn't been updated since its original enactment. This outdated valuation bore no resemblance to actual market costs, potentially shortchanging injured workers who received housing and meals as part of their employment.

The new law, which takes effect immediately, replaces the $25 weekly value with market value calculations. This ensures that workers' compensation benefits accurately reflect the true value of the board and lodging they receive.

Key Provisions

Under the modernized law:

Market Value Standard: Board and lodging provided by employers will now be valued at their actual market rate, unless a different amount was agreed upon at the time of hiring.
Temporary Disability Exception: If an injured worker continues to receive board or lodging during a period of total temporary disability, that value will not be included in calculating their workers' compensation rate. This prevents double-counting of benefits the worker is already receiving.

Who Does This Affect?

The legislation primarily impacts three categories of workers in New Jersey:

Agricultural workers (approximately 4,000 jobs)
Live-in domestic workers (approximately 9,200 jobs)
Live-in childcare providers (approximately 800 jobs)

Combined, these roughly 14,000 positions represent about 0.33% of New Jersey's workforce — but for these workers, the change is significant.

Fiscal Impact: Minimal but Important

According to the Office of Legislative Services' fiscal analysis, the state will see modest expenditure increases:

Year 1: Up to $11,700
Year 2: Up to $23,400
Year 3: Up to $35,100

These costs relate primarily to the Second Injury Fund, which provides benefits to workers who are totally and permanently disabled due to a combination of work-related injury and pre-existing disabilities. The analysis estimates that approximately one Second Injury Fund claim per year will be affected by the updated valuation method.

Importantly, the OLS found no state or local government positions where board and lodging are provided as part of employment, limiting the fiscal impact to existing claims against the Second Injury Fund.

The Path to Law

The legislation enjoyed overwhelming bipartisan support:

Senate vote: 38-0 (December 18, 2025)

Assembly vote: 72-1-1 (December 22, 2025)

Primary sponsors included Senators Joseph Lagana (D-Bergen) and Troy Singleton (D-Burlington), along with Assemblymen William Sampson IV (D-Hudson), Anthony Verrelli (D-Hunterdon/Mercer), and Kevin Egan (D-Middlesex/Somerset).

Why This Matters

While the fiscal impact is modest, this legislation represents an important principle: workers' compensation benefits should reflect economic reality. A $25 weekly valuation made sense in an earlier era, but it had become woefully inadequate in 2025's economy.

For context, the U.S. Department of Labor currently establishes daily subsistence standards for H-2A visa farm workers at $15.88 per day — equivalent to $111 per week just for meals. When lodging is factored in using Department of Labor guidelines, the actual market value ranges from approximately $96 to $113 per week, nearly five times the old statutory rate.

A Model for Modernization

New Jersey's swift action to update this outdated provision demonstrates how states can modernize their labor laws to keep pace with economic realities without creating undue fiscal burden. The estimated cost of approximately $11,700 annually represents a rounding error in state budgets while providing meaningful protection for some of the state's most vulnerable workers.

As Governor Murphy noted when signing the bill into law (P.L.2025, c.212), ensuring fair compensation for injured workers isn't just good policy — it's a reflection of our values as a state.

Looking Forward

With this modernization complete, workers in agricultural, domestic, and childcare positions who receive board and lodging can be confident that if they're injured on the job, their workers' compensation benefits will accurately reflect the full value of their employment arrangement.

The law took effect immediately upon signing on January 12, 2026, meaning it applies to all claims filed on or after that date.