What to Know About Workers’ Compensation for Employees Who Work From Home

Nicole Rothstein

As a business owner, you’re likely familiar with workers’ compensation. If not, here’s a guide explaining how workers’ compensation works. The topic has many layers, but it can be fairly straightforward to envision how it pertains to the specific environment where your on-site employees work. Given the increasing number of employees who work from home, however, it’s also important for employers to understand how workers’ comp functions for employees who telecommute.  

Here’s a guide that covers the specific requirements and best practices for workers’ compensation as it relates to remote employees—as well as ways you can mitigate risk.

Workers’ comp requirements for remote employees

You might be wondering, are remote workers even eligible for workers’ compensation? The short answer is yes, most states require workers’ comp for any business with one or more employees—including remote workers. 

The requirements aren’t as straightforward for remote workers as they are for employees who work on-site. But, as a small business owner you might consider flexible working arrangements to attract and retain talent. And, recognizing how the pandemic sent many employees home to work, it’s crucial to understand the requirements for remote workers when it comes to workers’ compensation.

In order for an insurance company to cover an illness or injury, there are two main requirements. First, the incident must have occurred while the employee was conducting work-related activities. Second, the incident must have occured during work hours.

Challenges of workers’ comp for remote employees

While the basic requirements are the same for employees who work on-site and those who telecommute, it might be harder to prove an incident that occured while working remotely. 

For starters, when employees work from home, their “work space” can be hard to identify. Ideally they would have a dedicated work area, but this might not be feasible for many remote workers. It’s also difficult (or impossible) as an employer to regulate how safe those work areas are for telecommuters. It’s one thing to mandate safety precautions at your business, but it’s much more complicated when it comes to someone’s home or other off-site location—such as coworking spaces.

When claiming workers’ compensation for an event that occurred during remote work, the burden of proof is on the employee making the claim. This can be challenging given that, for many telecommuters, there aren’t other people (or witnesses) in their remote working environments to confirm the claims. It’s therefore not as easy to prove that the incident occurred while conducting work-related activities during work time.

Fortunately for you as the employer, your business will not determine whether or not claims are accepted. While you will work with the employee to report an injury and file the claim, it is always your insurance carrier that will actually accept or deny the claim—regardless of whether the employee is a remote or on-site worker. Additionally, the claim is subject to an investigation that complies with state employment law. Because of the process and steps employers and employees are required to follow, it’s important that it’s done as soon as possible—but more on that later.

What’s covered and what’s not covered

When most people think about workers’ compensation situations they usually think of injury on a construction site, or an illness resulting from exposure to a chemical in manufacturing. But there are many other types of work-related illness and injury claims:

  • Accidents during work-related transportation
  • Occupational hearing loss
  • Carpal tunnel
  • Heatstroke
  • Gas poisoning 

Examples of injuries or illnesses that are not usually covered include anything that:

  • is self-inflicted 
  • happens as a result of illegal activities 
  • violates employee policies 
  • occurs while under the influence of drugs (excluding prescribed medications) or alcohol
  • is considered a common illness, such as a cold or the flu 
  • would have happened regardless of being at work, and that is not precipitated by work—such as diabetes complications

Additionally, independent contractors, consultants, and freelancers are usually exempt and therefore not covered by workers’ comp.

Workers’ compensation also takes into consideration the personal comfort doctrine—a legal principle stating that there are certain acts employees do for comfort reasons throughout the day that are not considered a disruption to the course of work. This includes things like short breaks for eating or drinking, using the restroom and other means of relieving discomfort. Therefore, because these breaks are still considered part of the work day, employees are usually eligible for workers’ compensation if an injury occurs during this time.

When a workers’ compensation claim has been approved, your employee will usually receive compensation for medical bills, disability benefits, and lost wages. Your liability insurance typically also covers court fees, lawyer fees and settlements if an employee sues your company for reasons relating to the injury or illness. 

Examples of covered vs. not covered workers’ compensation claims

Let’s say you have an employee who works from home and they leave their desk during the work day for a cup of coffee. While on the steps, they slip, fall, and break their ankle. This would be an injury typically covered by workers’ compensation because they were taking a break for personal comfort reasons during the course of the work day.

However, let’s say that the employee decides to water their flowers on their lunch break. While they’re dragging the hose across the yard, they trip over it, fall and breaks their ankle. Watering flowers isn’t related to the job—even though it happened during the course of the work day—and it’s unlikely something that falls under the personal comfort doctrine. Therefore, it’s unlikely this incident would be covered under workers’ compensation.

Workers’ comp best practices for remote employees

There are a number of steps you can take to help ensure that the claim submission process goes as smoothly as possible. As with on-site employees, it’s important to focus on the well-being of the employee and the safety of their work environment. Here are some steps to consider if you have an employee who sustains an injury or illness while on the job.

Seek medical attention: In any claim of injury or illness, the most important first step is to make sure your employee is no longer in harm’s way and that you encourage and help them to seek medical attention. 

Assess the situation: After you’re sure your employee is safe, gather the facts surrounding the incident. This includes documenting who was hurt, what happened, where they were, what caused the injury, what treatment was sought and if there were any witnesses.

Report the incident: It is the employer’s obligation to report incidents to the insurance carrier. So, once you (the employer) know the details, it’s important to immediately report the incident to your insurance carrier—ideally within 24 hours. Train employees on the importance of reporting an illness or injury to the appointed person or department within the company (such as HR) as soon as possible.

Ensure the area is safe: To the best of your ability considering the incident didn’t happen on your property, communicate with your employee to ensure that the area is safe before work resumes. 

Inform employees of next steps: As the situation evolves, inform your employee of next steps. Ideally you will have a “return-to-work” policy detailed in your employee handbook or other employment documents, including how and when to return to work.

Tips for minimizing risk

Preparation is key to minimizing risk to your business and your employees. Here are some tips to help:

  • Create a written agreement between yourself and your employees that establishes consent to work remotely.
  • Develop a work-from-home policy outlining your expectations for remote workers. Regularly check in to make sure expectations are being met and to determine if adjustments should be made.
  • Make sure job descriptions are clearly defined, including the scope of work, specific job duties, start and end times, specified breaks and other details pertinent to remote work.
  • Create a set of standards for a home office. Indicate what type of equipment and environment is necessary and make sure to properly train workers. It is the employer’s responsibility to ensure that items provided by the company are safe and maintained. 
  • Establish a safety checklist covering things like loose cords. 

Whether you have employees who work from home regularly or only occasionally, it’s important to understand the way workers’ comp works for remote employees. While the types of claims are similar between in-office and remote employees, the actual situations usually differ. Minimizing risk and establishing clear policies is crucial.

Nicole Rothstein Nicole Rothstein covers a variety of topics related to finance, small business advocacy, and workforce and regional development. In addition to writing for and managing several blogs and publications, she has worked closely with federations, chambers of commerce, nonprofits, small businesses and financial institutions to create impactful content marketing strategies.
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