How Does Workers' Comp Work for Remote Employees?

Many businesses that have employees who work from home are still required by law to carry workers' comp.
Christine Lacagnina Written by Christine Lacagnina
Christine Lacagnina
Written by Christine Lacagnina

Christine Lacagnina has written thousands of insurance-based articles for TrustedChoice.com by authoring consumable, understandable content.

Reviewed by Cara Carlone
Reviewed by Cara Carlone

Cara Carlone is a licensed P&C agent with 20 years of experience. She has her P&C license in RI and TX and holds CPCU, API, and AINS designations.

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Woman working on laptop at home with cat nearby. How Does Workers' Comp Work for Remote Employees?

In recent years, remote work has become much more common. Understandably, employers may be wondering, "Do I need workers' comp insurance for remote employees?" Knowing how workers' compensation insurance works for employees who telecommute is essential to ensure your business continues to operate smoothly. It's also critical to be aware of when this coverage is actually legally required for remote employees.

Fortunately, a local independent insurance agent can help you find the right workers' comp for remote employees. They'll get your business set up with the ideal amount of coverage. But first, here's a closer look at how workers' comp works for remote employees and when it's necessary.

Is Workers' Comp Required for Remote Employees?

If any of your business's workers telecommute or work from home, you may have wondered, "Do remote employees require workers' comp?" In many states, the answer is yes. Businesses with any employees are usually required to carry workers' comp, even if those employees work from home. Of course, there are limited exceptions to workers' comp requirements. 

Certain industries aren't required to carry workers' comp, regardless of how many employees they have. Further, if you run a small business like an LLC and all of its workers are related, you may also be exempt from workers' comp requirements. It's critical to be aware of the workers' comp laws in your state to avoid potential penalties like state fines, jail time, and more.

How Does Workers' Comp Work for Remote Employees?

Unfortunately, it can be difficult to monitor your telecommuting employees' safety since you're not all together in an office or store. Because of this, it can also be difficult to verify the validity of a remote employee's workers' comp claim. 

To be covered under workers' comp, an injury or illness must have either occurred due to job tasks or the work environment. You may not be able to rely on a witness's testimony for your remote worker who claims to have been injured by their job if they work remotely.

The tricky part is that not all injuries, illnesses, etc., that occur while an employee is on the clock could technically be work-related. For example, if a remote worker tripped and fell down the stairs in their home during the course of their workday, the injury wouldn't be due to a work-related accident. 

However, your employee would still report the injury to you, a workers' comp claim would be filed, and the insurance company would determine whether the injury was covered or not. State laws regarding what incidents are covered vary by location.

What Is the Personal Comfort Doctrine?

Many states use the personal comfort doctrine regarding workers' comp coverage. This doctrine states that workers' comp should cover incidents that lead to employee injury or illness while they're at work or on the clock but not necessarily completing a job-related task — for example, injuries that occur while a remote employee is taking a bathroom break or making a cup of coffee. 

If your state uses the personal comfort doctrine, there's a much greater likelihood of most remote employees' workers' comp claims being covered. Be sure to look up the regulations in your state.

What Does Workers' Comp Cover for Remote Employees?

Offering workers' comp protects your business from liability if a worker injury, illness, disability, or fatality occurs that was caused by their job in some way. If your business carries the required amount of workers' comp coverage for all of its employees, it is exempt from employee lawsuits for covered incidents and from lawsuits filed by these workers' family members. 

Workers' comp can also reimburse affected employees and businesses for the following:

  • Disability benefits
  • Death benefits
  • Medical treatments
  • Rehabilitation
  • Hiring costs
  • Lost wages

If a worker dies due to their job, workers' comp can provide a death benefit payout to a beneficiary. Further, if a business must hire new talent to replace a deceased employee or one who cannot return to their job due to a covered injury, illness, or disability, workers' comp can reimburse the business for hiring expenses.

How Does Workers' Comp Work for Remote Employees in Other States?

If you have remote employees working from home in a different state from where your business is headquartered, this may complicate the workers' comp process just a bit. Businesses with remote employees in other states often need to add a policy addendum to their workers' comp policy, which can make the coverage more expensive than a standard policy. However, otherwise, the claims process largely remains the same.

The Most Common Work-from-Home Injuries

In general, working from home can largely be seen as a safer experience for many employees. However, this isn't always the case. Work-from-home injuries, illnesses, and disabilities can still develop. The most common categories of remote worker injuries include:

  • Cumulative injuries: This refers to injuries that develop over time due to repeated job tasks, such as a shoulder injury that results from a poor ergonomic setup at a worker's desk.
  • Slips, trips, and falls: These injuries can occur anywhere, regardless of whether a remote worker's home even has a staircase. Anything can be a tripping hazard, ranging from objects on the floor to the edge of a piece of furniture. 

Make sure any of your remote employees are aware of the risks of injuries, etc., occurring while working from home. Teach them about the most common causes of injuries and how to prevent them.

How to Reduce the Risk of Telecommuter Injuries

Fortunately, there are some steps your business can take to reduce the risk of telecommuter injuries, etc., and in turn, reduce the risk of having to file workers' comp claims. Follow these simple steps to help keep your remote employees safe while on the job:

  1. Create a telecommuting policy: Your business should outline company policy for remote workers, too. This policy should outline the worker's job duties, the schedule for virtual communication and meetings, and how hourly employees can properly document their time worked.
  2. Establish home office guidelines: Businesses that implement home office guidelines for remote employees can increase their workers' chances of staying productive. Consider implementing remote worker guidelines that require telecommuters to continue to comply with company policies even from home, stick to an agreed schedule, and seek a workspace that's free of distractions as much as possible. Provide remote workers with guidelines for how to set up their home office, including what equipment is required (e.g., computer, printer, lighting, etc.).
  3. Create a home safety checklist: Teach remote workers how to safely set up their home office or workspace to reduce the risk of injuries, including those that happen quickly and those that develop over time. Make sure telecommuters are aware of potential hazards in their home office, including poor lighting, loose cables and cords, and overloaded electrical outlets or power strips.

Ensuring your remote workers take the time to properly set up a safe home workspace can benefit everyone. This can allow remote workers to stay on-task and complete their job duties and reduce your business's time spent on workers' comp claims.

How Much Does Workers' Comp for Remote Workers Cost?

When your business purchases its workers' comp policy, you must be careful to properly classify your employees, including remote workers, to be quoted an appropriate rate. Misclassifying your employees can lead to state penalties for your business later on. The typical workers' comp code for remote workers is 8871, which technically identifies clerical telecommuter employees. Be sure to research any additional class codes you may need to use for your business's telecommuters.

The cost of workers' comp for businesses with remote employees can vary considerably. Workers' comp premiums can depend on the following:

  • Years in business
  • Number and type of employees
  • Job duties and risks
  • Prior claims history
  • Location
  • Industry

A local independent insurance agent can help you find affordable workers' comp for remote employees near you.

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An Independent Insurance Agent Can Help You Find Workers' Comp for Remote Employees

When it's time to find the right workers' comp insurance for remote employees, no one's better equipped to help than an independent insurance agent. These agents have access to multiple workers' comp insurance companies, so they're free to shop and compare policies and rates for you. 

They'll get you matched to a policy that offers the best blend of coverage and cost. And down the road, your agent will still be there to help update your coverage as your business's needs evolve and can even file workers' comp claims for you.

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https://www.wcirb.com/research-and-education/learning-articles/what-you-need-know-about-classification-8871-clerical-telecommuter-employees

https://www.adp.com/spark/articles/2022/06/implications-of-work-from-anywhere-when-remote-workers-cross-state-lines.aspx

https://woodruffsawyer.com/insights/workers-comp-remote-employees

https://www.insureon.com/blog/how-does-workers-comp-work-for-remote-employees