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Home-Based Workers and Workers’ Compensation

While working at home can have significant benefits for both employees and employers, its implications for Workers’ Compensation should not be overlooked. There are many unanswered legal questions regarding this growing trend and employers need to have a system for managing home-based employees that protects both themselves and their employees.

It’s easy to view home-based employees differently from employees in traditional workplaces, yet home-based employees are still employees and Workers’ Compensation applies to injuries arising out of or in the course of employment, whether the injury occurs while the person is working from home or at a more traditional workplace.

There may be a tendency to view home-based workers as independent contractors, but simply working from home does not qualify as an independent contractor. This would apply only when they have their own business, other clientele and are not an integral part of your business. Furthermore, the home-based arrangement can lead to ambiguity between work-related and personal injuries, so it is important that the arrangement be carefully managed.

Some of issues that need to be considered are:
  • What is the nature of the work? Is the employee exempt or non-exempt?
  • How are the hours of work determined? Is there a system in place that documents the actual hours worked?
  • For non-exempt employees, is there a system to authorize overtime?
  • Has the employee signed all the agreements and handbooks signed by regular employees?
  • How will employees be trained in safe working procedures? Keep in mind the employee will be working without supervision and more extensive training may be needed.
  • Is there a separate work area in the home?
  • Is all home equipment and furniture ergonomically designed and in compliance with OSHA standards?
  • Will the employee agree in writing to maintain a safe workplace and notify the company of any problems that are safety related?
  • Does the employee have homeowner’s or rental property insurance?
  • How often is the employee required to come into the office?
  • Does the employer have the right to visit the home office to ensure that the designated work location meets safety and ergonomic standards?
  • How will accidents be investigated?
These are just some of the many issues to examine when considering a home-based work arrangement. Before entering into home-based work arrangements, one of the first steps should be to talk to your Advisor regarding the implications for Workers’ Compensation coverage.