Over half of employees work remotely some or all of the time, and every day more businesses are embracing a remote work model to boost employee engagement and satisfaction. This shift in employee location brings up interesting logistical questions for employers, who may be wondering if they need to cover remote employees with workers’ compensation insurance.
The short answer is yes — in every state except for Texas, businesses must obtain workers’ compensation insurance if they have one or more employees. This rule applies whether the employee works at your place of business or in their own home. It doesn’t apply to freelancers or independent contractors, however.
This guide explains how workers’ compensation applies to remote workers, and it provides tips on how to reduce your risk of claims while also giving your employees the flexibility to work remotely.
An Overview of Workers’ Compensation When Working From Home
Workers’ compensation is a type of insurance that provides coverage when workers get injured on the job. This coverage pays medical bills and some wages to employees who are injured at work, and in exchange, employees waive their right to bring negligence lawsuits against their employers.
Workers’ compensation applies to remote workers as well, but the situation is in flux. It’s not a new concept, but the rules are coming under additional scrutiny as an increasing number of businesses rely on remote workers.
Assessing Eligibility for Workers’ Compensation for Remote Workers
Coverage varies based on the situation, and workers’ compensation boards take multiple factors into account when assessing whether remote workers are eligible. Covered injuries generally must arise out of or occur within the course of employment. Here are some factors workers’ comp boards typically take into account when assessing eligibility for coverage:
Injuries that happen while a worker is performing tasks required by their employer are covered by workers’ compensation regardless of the worker’s location. An employee who falls off a ladder at the employer’s place of business is covered. An employee who hurts their hand shredding documents at their home office is also covered if their employer required this activity.
The injury may also be covered if the employer benefited from the activity, even if they didn’t expressly require it. Consider the employee who cut their hand while shredding documents: They may be able to make a claim if their employer benefited from that action, even if their employer didn’t specifically require it.
Approval of the Activity
An activity that the employer has approved may also be eligible for workers’ compensation. Imagine that you allow workers to make coffee in their home kitchens while working, and someone suffers a burn. They may be able to claim workers’ compensation for that injury because you approved that activity.
Nature of the Injury
This consideration comes into play whether someone is working remotely or at their employer’s place of business. Say that a worker requested workers’ compensation for carpal tunnel syndrome based on the typing they do for your business from your home, but they have only worked for your business for a month.
They also have extensive medical records related to having similar injuries in the past. That’s an indication that this injury may not be linked to your job.
Timing of the Injury
Most of the above examples refer to injuries that occurred within the scope of employment, but injuries that happen during the course of employment often boil down to timing. An employee who works from 8 a.m. to 5 p.m. can typically seek workers’ compensation for injuries that occur during that time frame. They generally won’t be covered, however, if they get injured in their own home outside of those hours.
One remote worker was injured when she fell down some stairs while returning to her basement office after getting a glass of water. Obtaining the water was not within the scope of her duties, but because it occurred during her employment, workers’ compensation covered the injury.
The employer didn’t create any issues with this employee’s stairs and most likely didn’t know if there were any hazards on the stairs. The claim was approved nonetheless in Verizon Pennsylvania Inc Versus Workers’ Compensation Appeals Board because the employee’s home office was considered a secondary work site.
More cases are bound to arise to clarify some gray areas in this emerging area of HR concern. Employers are wise to consider some ideas for how to minimize their exposure.
How to Reduce the Risk of Workers’ Compensation Claims
The more workers’ comp claims your employees make, the higher your premiums will become. You can protect the safety of your team and minimize the risk of employees seeking workers’ compensation when working from home by using the following strategies:
Create a Well-Defined Scope of Work
Defining the scope of work can help to prevent your employee from making claims for injuries that are not work-related. Someone who gets hurt while doing laundry or cooking a meal for their family, for example, should not be able to make a claim for those injuries because they’re not within the scope of employment.
Set Fixed Work Hours
A set schedule ensures that your employees can only bring forward claims related to injuries that occur within those hours. They cannot claim that they were working all night and their injury from bumping into a wall in the dark was your responsibility.
Require a Designated Work Area
A designated work area can help reduce the risk of injuries occurring in other parts of the house. You may want to see if you can check out the space to look for potential hazards, but if that isn’t possible due to privacy concerns, control what you can. Educate employees about best ergonomic practices or how to reduce their risk of injuries in other ways, for example.
Workers’ comps boards put the burden on employees to prove their injuries were work-related, but they also tend to err on the side of employees. This means employers need to be proactive about reducing the risk of team members seeking workers’ compensation when working from home.
Contact Ignite HCM for Help Managing Your Remote and In-Person Team
Managing talent can be challenging, whether they’re in the office or working remotely. Ignite HCM can help.
We offer a simpler way to manage ADP payroll and HR systems through on-demand consulting and support services. Make the most of your human capital by contacting us at Ignite HCM Consulting and Services today.