7 Secrets that Cost Your Client a Bundle on their Workers' Comp

Employers Can’t Just “Phone it in” With Workers’ Comp When it Comes to Remote Workers

Kevin Ring 1 year, 8 months ago

Many things about our daily lives returned to normal as we have come out of the pandemic. But there is one change that is likely never to go back to the old ways, and that is employees working from home.

Much has been said about managing remote employees effectively: are they putting in the hours, are they as accessible, is the lack of employee interaction a detriment, are they staying in their pajamas all day (okay, maybe that one’s not as important)? But what can’t be ignored is how a “remote workplace” impacts an employer’s workers’ compensation.

Let’s explore three key areas that every employer needs to monitor:

1. Where are they working from within their home?

Over the past several decades, much time and money have been spent on improving office ergonomics. Are your employees working from home lying on the bed, couch, or floor in all sorts of problematic positions?

Insist that employees working from home have a space where they consistently work with an appropriate work surface and a chair that is at an appropriate height to work safely and not trigger ergonomic issues. Employers may consider helping their remote employees obtain appropriate furniture if they don’t have a home office.

2. Where are they working within the country?

One joy of full-time remote work is that you are no longer tethered to a specific location. In many cases, remote workers can do their job from anywhere.

However, this benefit for the employee can become an issue for the employer because of how the workers’ compensation policy is written. A standard workers’ compensation policy covers “primary” states, which are states where your business has locations staffed with employees. It can also cover “other” states where an employee may travel temporarily.

In communities near a state line, it is common for an employee to live in one state and work in another state. When everyone was in the office, you would likely have a single state on your policy as primary – the state where you have your office. If employees are now working from home in a different state, you must add that state as primary to your workers’ compensation policy.

In other businesses, employees have left the area altogether. Case in point: my next-door neighbor moved to North Carolina from Texas to work remotely. The same issue applies here ­– you must have the states where your employees work listed as primary states on your workers’ compensation policy. Thus, her employer in Texas had to include North Carolina on their policy.

This seems a simple issue to solve, but it can be quite complicated. Many insurance companies are limited as to what states they can add to policies, or they may decline to do so. Separate workers’ comp policies may have to be purchased for the states where your primary insurance provider can’t or won’t issue a policy.

If you have employees working from home outside your primary state(s) of operation, be sure to discuss this with your insurance agent.

3. When are they working?

A frequent question we hear regarding remote workers is, “What if my employee decides to go check their email in the middle of the night and falls down the stairs? Is that a workers’ comp claim?”

Many factors go into the answer, but the more significant concern is your expectations for when your employee is working. You can’t control the housekeeping at your employees’ homes the same way you can in your office. It’s not your fault that there might be a Barbie® or a Lego® spaceship left on the darkened step at two in the morning. However, setting clear expectations about when you do and do not expect your employees to be working could potentially help determine whether an “after-hours” injury is covered by workers’ compensation.

Remote work is not going away. Now that we are well past the “panic mode” stage of the pandemic, it is time to focus on strategies to make it work for your business. “Out of sight, out of mind” isn’t a plan for managing the safety of your remote employees. You must not just “phone it in” when thinking about how your remote workers will ultimately affect your workers’ compensation because to do so will result in increased costs and lack of productivity.

Kevin Ring is the Lead Workers’ Compensation Analyst for the Institute of WorkComp Professionals, which trains, certifies, and mentors insurance agents to help employers reduce Workers’ Compensation expenses. A licensed property and casualty insurance agent, he is the co-developer of a Workers’ Comp software suite that helps insurance professionals manage their clients’ workers’ compensation programs.