Do you need workers comp for remote employees?

There were a lot of changes that resulted from the pandemic. It forced many employers to adopt work-from-home strategies and hybrid work models. In fact, a recent study discovered that nearly 50% of employers will continue to maintain a hybrid work model post-pandemic. This raises a new question for the employer. Do you need workers comp for remote employees?

Remote work has actually been on the rise for several years, the pandemic only hastened the change. Regardless, workers’ compensation insurance will require additional attention when you have employees working from home. If remote work is new to your organization, you may ask if workers comp is required for remote employees or how it works.

If your business is considering a remote or hybrid work model, you may have questions too. To help, we’ve created a list of answers to some common questions, and offer some constructive advice below. But let’s start with the big question first.

Do I need workers’ comp for my remote employees?

Your remote workers should be treated just like those who come into the workplace. As a result, if your state requires you to have workers comp coverage for employees, then you need it for remote employees just the same as you do for workplace employees. In fact, workers’ compensation insurance is required by law in nearly all states.

Think of it this way, workers’ comp is designed to provide coverage for injuries or illnesses that happen as the result of activities conducted in the course of employment. That can happen at the workplace, on a job site, or at home.

Should I do anything different for remote employees?

Let’s face it, there are some significant challenges for the employer with remote employees. It can feel like you have far less control over their environment and workplace safety. What feels like a perk to the employee, can be a burden to the employer.

Additionally, there is no visual oversite of the remote worker, from peers or management. If the remote employee is injured on the job, who will witness the incident? Was the injury or illness the result of “course and scope of employment” or “furtherance” of their work-related tasks?

If you’re looking to your state’s regulations or precedent to help provide guidance, you’ll discover there aren’t clear rules or definitions. Determining if an incident is work-related will simply be more difficult for remote employees.

Things aren’t all bad, however. Most insurance carriers are good at evaluating the proximate cause of injuries and illness. In fact, courts have ruled favorably in some cases when determining what is work-related. As the nature of remote work evolves, so do our rules, regulations, and precedents.

What can employers do?

First, just like your workplace employees, you’ll want to do your best to document any accident or illness and report it promptly to your insurance carrier. if required, you’ll also need to report injuries or illnesses it to your state’s workers’ compensation board.

Equally important will be the set of guidelines that create a safe workspace for your remote employees. The goal is to reduce or prevent injuries before they happen.

Steps to reduce the risk for remote employees

Now that you know you need workers comp for remote employees, it’s time to review your safety protocols to make sure remote employees are operating in a safe environment. In fact, you should be doing this for all your employees. You keep your workers’ compensation premiums more manageable when you avoid claims.

Here are some recommendations for the employer who is considering a move to a remote or hybrid workplace.

Update the employee manual for remote employees

Your employee manual typically has things like the time-off policy, dress code, and other key provisions for creating an equitable workplace.  If you’re going to have remote employees, it should also have policies for remote employees.

There are some basic things you’ll want to include for remote employees. For instance, the remote employee will need specific guidance on virtual communications and video conferencing. They may need different guidance on time tracking. But what you’ll really need is a specific remote-work agreement. This document should require the remote employee to conform to all company policies while working from home, establish normal working hours, and that the employee will create a distraction-free workplace.

Where you can make a real difference in managing your workers’ comp risk, however, is in establishing guidelines for the home office.

Recommendations for home office procedures

Guidelines for a proper workspace should include some of the following:

• What type of chair is considered proper
• The type of desk that should be used
• Establish that the lighting should be sufficient
• Outline the proper equipment (eg. computer, mouse, phone, and headset)
• The height of the keyboard while sitting. (avoid discomfort from repetitive movements)
• Define a distraction-free workspace.
• Set safety standards for loose cords and use of powerstrips (don’t overload electrical outlets)

While most remote workers do have some discretion on where they will be during the day, the majority of their time will be spent at their workstations. You should establish guidelines to make it safe, ergonomic, and comfortable.

Review your business insurance with an insurance agent

Your workers’ compensation insurance is just one of many insurance policies you have purchased to protect your business. You also have general liability insurance, commercial property, employment practices liability, and possibly a cyber liability coverage that needs to be reviewed before you move to a remote workforce.

Before you commit to a remote or hybrid workplace, you should consult with an insurance agent. An insurance agent can help you assess if your coverage is suitable for a remote workforce, and help you make the necessary changes to avoid coverage gaps.

The bottom line

Working from home is seen by many employees as a perk or even a benefit to their employment. However, it can be a logistic challenge and a business risk for the employer. It’s really more than simply knowing if you need workers’ comp for remote employees. In fact, it might be equally important to assess your cyber liability risk for remote employees.

If you need to consult with an insurance agent about your business insurance coverage, and how it pertains to remote employees, you can always contact us. Or, you can get an online quote and we can do a full review of your full business insurance program.