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Telecommuting: Workers' Compensation considerations

The pandemic prompted many organizations to change their operating models and some changes, such as remote work, will persist long after the crisis has passed. As organizations wrestle with whether and how to transition workers back to long-dormant offices, they have a host of factors to consider. Productivity, efficiency, collaboration, culture, costs, cyber security, onboarding, employee preferences, training, office configurations, talent recruitment, pay differentials for location, timeline, as well as federal and state laws are some.

Many expect a hybrid work model to become the new norm. Some workers may come into the office infrequently or not at all, others may have a regular schedule of certain days in and other days at home, and others may primarily work at the office. Since these decisions will set the tone for how work will be done in the future, can transform a company's culture, and impact employee engagement they require careful consideration.

A hybrid model is a complicated way to organize a workweek and the implications for workers' compensation can fall under the radar screen. Once the workers' roles, responsibilities, and eligibility for remote work are determined, it's important to take the following steps:

  1. Send a written communication to the staff about any changes that will affect remote work. It should define the scope and eligibility for remote work, as well as a process to request accommodations. Be prepared to address requests to work from home from employees who are scheduled to return to the office in a non-discriminatory manner. For employees with disabilities, follow the typical interactive process for ADA accommodation requests and be aware of EEOC's position that employers should consider the temporary telework experience in evaluating requests. If a denial is made, be prepared to build the case that some essential job functions were waived because of the pandemic.
  2. Determine if job classifications need to be changed. If an employee is working more than 50% of the time from home, they can be classified in the telecommuting code (8871 in most states), but if they are more than 50% of the time in the office they are the clerical code 8810. If it's exactly 50/50, it's 8810. It's important to keep records to support the use of 8871, as it is generally less expensive, and the classification will default to 8810 without supporting documentation.

    Not all workers who work remotely now were classified as clerical before the pandemic. For example, a traveling accountant or auditor who no longer traveled, but did their job virtually, may have been reclassified into the lower cost telecommuting code. Similarly, an employee who programs and inspects machines for a manufacturing process but programmed and inspected machines virtually while working at home, also could have been reclassified as a telecommuter. If the employee continues to work at home a few days a week, but goes into the shop to do inspections, then 100% of the payroll would go into the appropriate shop code because the rules do not allow the separation of payroll between 8871 (or 8810) and a standard classification. Failure to address changing classifications could result in unpleasant audit surprises.
  3. Update or establish a Work from Home (WFH) Policy and Agreement. At the beginning of the pandemic, WFH was a crash course for employers and employees. Over time, many created or revisited telework policies to clearly define the roles and responsibilities of the employer and employee. It should be updated to reflect who is eligible to work remotely, full-or partial time. The policy should also address performance expectations and monitoring, cyber security, time keeping requirements, location of work, safety standards for a home office, equipment ownership, workers' compensation rights and reporting requirements, employer's authority to change or revoke the policy at any time, as well as other provisions relevant to the position and company.

    If the move is to some permanent arrangement of WFH, assess if more needs to be done to ensure the safety of employees. The number one issue is that many home working environments are not ergonomically compliant, which can lead to carpal tunnel, neck and back issues, eye strain, headaches/migraines, joint problems, and more. Musculoskeletal disorders are associated with high costs to employers; a single carpal tunnel claim can cost $34,000 to $64,000 and a sprain or strain can cost between $32,000 and $67,000 according to One Call research.
  4. Improvised offices, pets, and children toys, also increase the likelihood of slip-and-fall injuries. Depending upon the company size and number of remote employees, there are ergonomic programs that can be helpful. Some start with technology-driven self-assessment tools with built-in corrective measures and others include a virtual tour of the workspace. While some employers worry that such programs can result in recommendations for expensive equipment, Michelle Despres, vice president of business development and national clinical leader for One Call Physical Therapy, notes that employees are not offered a smorgasbord of choices, and the most common equipment recommendation is a chair, with an average cost of under $200. The Mayo Clinic offers a free, simple guide to home office configuration.
  5. Determine how injuries will be investigated. As with worksite injuries, injuries when working at home must arise out of and in the scope of employment to be compensable. However, the blurring of lines between work and personal activities, flexible schedules, and the lack of witnesses mean the investigation must be handled differently than an injury at work. The WFH agreement, signed by the employee, can help defeat fraudulent claims. In addition to clear instructions about reporting injuries immediately, the agreement should also include warnings against fraudulent misrepresentation, and consent to investigate the claim, including the right to inspect a residence after a reported injury.
  6. Have a system to keep track of employees who are living in another state. Although "other states endorsements" typically will cover an employee who is working in another state for a short period of time, such as a business trip, it's not sufficient if the workers' location has changed permanently. If workers' comp coverage is not sufficient, the employer is exposed to the risk of covering medical and indemnity costs, penalties, and the loss of protection from exclusive remedy. The rules are complicated and vary by state, but it is important to be sure there are no gaps in your protection. The good news is that this can be done with little or no effect on premium.
  7. Take the time to orient workers who will return to the office on the new ways of working. Physical distancing measures, shared equipment, masks, hand sanitizers, health screening procedures, lunch and rest breaks, changed configurations and traffic flows, customer and visitor protocols, and so on need to be clear to everyone, regardless of the frequency of in-office attendance. Reinforce and have consistent consequences for violations of the health and safety protocols.
  8. Review all documents with legal counsel and workers' compensation and general liability brokers.

Because state laws vary, it's important to define each employee's working hours and specific job duties to help determine if an injury is work-related. Before the pandemic, only six percent of employees primarily did remote work. As a result, there are few cases that deal with this issue and decisions have varied by state and the facts of the case. Projections are that 15 - 20% of workers will remain at least partially remote post-pandemic and a rise in at-home injury claims is anticipated. While the burden of proof of work-relatedness generally lies with the employee, these cases are complicated and it's best to be prepared.

For more information, East Coast Risk Management, a member of the Institute of WorkComp Professionals, explores remote work and considerations for your business.