How does workers’ compensation work for remote employees?

Workers’ compensation programs protect workers who are injured on the job from financial hardship.

Determining the validity of a workers’ compensation claim is easy when the worker suffers an injury in the office or on the factory floor, but what happens when employees work from home? Does workers’ comp apply to your remote employees?

The short answer is that yes, in general, remote employees qualify for workers’ comp.

The long answer is more detailed since working from home comes with its own set of insurance considerations. So, in this article, we take a deep dive into how exactly remote workers' compensation works.

What is workers’ compensation?

Workers’ compensation is a type of employer insurance that pays for medical care and benefits to employees who get sick or injured on the job or as a result of their work.

There are many types of work-related illnesses and injuries, ranging from work floor mishaps and vehicle accidents to injuries stemming from repetitive movements or postures. They typically affect onsite workers but can become an issue for remote workers as well.

Here are some examples:

• Work-related transportation accidents

• Carpal tunnel syndrome

• Gas poisoning

• Heatstroke

• Arm injury or pain due to lifting office equipment

• Chronic back problems due to prolonged sitting

• Cumulative injuries, like occupational hearing loss in high-decibel environments

Employees who are injured on the job have a choice to accept workers’ comp payments or not. If they do, they usually waive the right to sue their employer for damages or negligence.

What doesn’t workers’ compensation cover?

Though workers’ compensation addresses a broad spectrum of work-related health issues, it doesn’t cover every job injury or illness. Those that aren’t covered include the following:

• Self-inflicted injuries or injuries that result from horseplay

• Injuries or ailments that result after a violation of company policies

• Injuries that occur under the influence of alcohol

• Common ailments like fever, cold, and flu

• Incidents not triggered by work

• Injuries that occur during an off-duty recreational activity

• Pre-existing ailments, like diabetes complications (unless aggravated by work)

• Acts of God, such as lightning, hurricanes, and tsunamis

In short, workers’ comp is a powerful safety net for work-related injuries and illnesses, but it doesn’t replace employees’ health insurance policies.

Does workers’ compensation cover remote employees?

Like all other employees, remote employees qualify for workers’ compensation. Any injury sustained when working at an employer’s workplace that would normally be covered also applies to remote employees.

This is true regardless of whether the employee works at home, travels around as a “digital nomad,” or is on assignment at a different location. When it comes to workers’ compensation claims, the nature of the injury is more important than the location at which the worker sustained it.

That said, workers can’t simply claim that any injury sustained in their typical place of work qualifies for workers’ compensation.

The injured worker owns the burden of proof and must submit sufficient evidence to prove that the injury happened while performing activities in the line of work. So, injuries sustained at home while cooking dinner or mowing the lawn do not count.

What does workers’ compensation for remote employees cover?

In the US, the exact coverage requirements vary by state and, in some cases, by industry. However, most workers’ compensation policies for remote employees cover the following:

• Medical costs

• Rehabilitation expenses

• Income replacement

• Disability benefits

• Compensation in case of permanent disability

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How does remote work affect workers’ comp insurance coverage?

Workers’ comp coverage is often more complex for companies with remote employees.

If you’re based in California but have remote employees in Nevada, for instance, you need to ensure that your workers’ compensation insurance covers both states. However, if your insurance company isn’t licensed in Nevada, you may need to get another policy. To find out your coverage, ask your insurance provider about their reciprocity clauses.

If some or all of your employees work abroad, a different set of considerations kicks in.

Remote employees who work outside the US for up to six months will need to be covered by Foreign Voluntary Workers’ Compensation (FVWC).

Those working outside the country for more than six months may need insurance from a local carrier or an international policy.

Do you need both workers’ comp and liability insurance? What’s the difference?

Workers comp and liability insurance are designed for different purposes.

Workers’ compensation provides coverage for workers who are injured or get sick in the course of performing their work duties, regardless of where that work occurs.

Liability insurance covers not just workers but anyone who happens to be on company property. It typically doesn’t cover events that occur off the company’s physical property.

To illustrate, here are a few different scenarios:

• A person working from home who suffers a repetitive motion injury from too much typing could be covered under workers’ compensation.

• An employee traveling for work who falls down the hotel stairs and breaks her foot could also be covered by workers’ compensation.

• A customer who visits the company’s office and sustains an injury after slipping on a wet floor would be covered by traditional liability insurance.

These two types of coverage sometimes apply to the same scenario. A worker who falls down and sustains an injury on company property may in some cases be covered by both liability insurance and workers’ compensation. Which policy pays out depends on the nature of the injury and the terms of the coverage.

Who pays for workers’ compensation?

The employer takes out the policy and pays the full premium, for both onsite and remote employees. Employees aren’t required to contribute premiums for this coverage.

Are remote employees covered by OSHA?

OSHA, the Occupational Safety and Health Administration, is a federal agency in the United States that’s responsible for ensuring safe and healthy working conditions. It does so by setting and enforcing standards and providing training, outreach, education, and assistance to employers.

Regarding remote workers, OSHA's jurisdiction is somewhat limited. While employers are generally responsible for ensuring a safe work environment, OSHA does not specifically regulate home offices.

However, employers still have to make sure that any work-related activities conducted remotely comply with general safety and health standards. This means that while OSHA does not typically inspect home offices, employers should still encourage safe practices and provide resources to help remote workers maintain a safe and ergonomic workspace.

Is workers’ compensation required for remote employees?

In the US, workers’ comp is required for private employers with at least one employee, whether that employee works onsite or remotely. Texas is the only state where workers' compensation is not mandatory for private companies.

The exact compensation coverage requirements vary by state. Check with your local Workers’ Compensation Board for exact details.

Does workers’ comp apply to independent contractors?

There are no requirements for businesses to purchase workers' compensation insurance for independent contractors. Since contractors and freelancers are independent business entities, they aren’t eligible for the same benefits that remote and on-site employees receive.

But keep in mind: it’s important to classify your employees correctly to ensure you’re providing the right benefits.

Some companies might assume they can save money by hiring independent contractors and not paying for remote workers’ compensation. If those contractors should actually be classified as employees, this error can lead to hefty fines and legal consequences.

Use Remote’s employee misclassification risk tool to check whether your contractors are classified correctly. With Remote’s Global HR, you can offer mandatory and competitive benefits based on local employment laws.

How does workers’ comp apply to remote employees?

You might think, if a remote employee is working from home, how can they become injured on the job? But it is possible to suffer from a work-related illness or injury, even if you never set foot into your employer’s workplace.

However, when employees work at a different location, such as from home or the local coffee shop, workers’ comp can be more challenging to understand and process.

Companies have little control over remote employees’ safety because they can’t oversee their work environment. It can also be difficult to find a reliable witness in the case of an incident.

So, how can you tell if your remote employee's injury claim qualifies for workers’ compensation?

There are two main requirements for a workers’ comp claim, whether the incident occurred in the office or remotely:

• The incident or ailment occurred during work activities

• The incident or ailment occurred during agreed-upon work hours

These requirements leave a lot of room for interpretation, especially for remote employees with flexible schedules.

Exact interpretations vary, but most follow the personal comfort doctrine. This means that certain non-work activities, like a coffee break or a trip to the bathroom, aren’t considered a disruption and are, therefore, part of the usual workday.

What counts as a work-related injury at home?

Interpretations regarding what counts as a work-related injury vary. Let’s look at a few examples of incidents where a workers’ comp claim may be valid:

• An employee feels a strain in their shoulder and elbow after sitting and typing for hours. The employee may have a claim because it could be argued that the injury occurred as part of their work.

• An employee gets a package from a client at home and hurts their back while lifting it. This is compensable because the delivered package is related to their job.

• An employee slips and falls in the bathroom during a break. This scenario would be covered by the personal comfort doctrine if the employee went to the bathroom during work hours.

Of course, not every injury that occurs during work hours may qualify for a claim. Here are some examples.

• An employee trips on a hose while watering plants during their coffee break. While coffee breaks are part of the personal comfort doctrine and are not considered a work disruption, watering the plants isn’t work-related.

• A remote employee is injured while taking a bike ride during their lunch break. While lunch breaks are considered part of the personal comfort doctrine, riding a bike isn’t a non-disruptive comfort or a part of the job and likely won’t be compensable.

Gray areas of compensable claims

Similar claims can get different workers’ comp rulings, depending on the circumstances.

For instance, in Florida, a claim from an employee who tripped over her dog while getting a cup of coffee in her kitchen was denied. The court argued that even though she had a work-from-home arrangement and that the incident occurred during work hours, she could’ve tripped over her dog anyway. The risk of tripping over her dog existed regardless of her work location and duties.

Alternatively, a claim in Pennsylvania for a remote employee who fell down the stairs after getting some juice was approved. It could be argued that the risk of falling down the stairs existed whether she was working or not, but in this case, the claim was approved.

These examples show that it’s not always clear what counts as workers’ comp and what doesn’t — but keep in mind that as an HR professional, you’re not responsible for deciding which claims are compensable. This is left up to your insurance company and the courts.

The burden of proof: The challenges of workers’ comp for remote employees

As an employer, you can mandate safety precautions in your factory, job site, or office building to minimize the number of accidents and workers’ compensation claims, but for companies with remote workers, things are different. You can’t see what these employees are up to, and you can’t control where they work.

It’s important to know that a lack of company control over a remote work environment isn’t enough to deny a claim. However, the burden of proof rests with the employee filing the claim: It’s up to the employee to prove that the injury or ailment happened because of their job, during work hours.

Additionally, all workers’ compensation claims are subject to investigation by an insurance adjuster and, in some cases, the state’s employment board.

But employers have certain responsibilities in this process as well:

• To make sure your remote employees know how to quickly report work-related injuries or illnesses to you

• To document the incident with a detailed written statement and file a claim

• To report the incident to your state’s workers’ compensation board

How can companies protect themselves and their remote employees?

Here’s an important question: if companies are responsible for taking care of workers who suffer injuries while working remotely, but those companies can’t control remote work environments, what should they do to protect themselves and their teams?

First, every company with remote workers needs workers’ compensation coverage with specific clauses addressing remote work.

Although the employee bears the burden of proving any claimed injury occurred during work, employers should not mistake that dynamic for protection against improper claims. Anything that could cause an injury in an employee’s home could be interpreted as a workplace hazard, depending on the circumstances.

To protect workers, companies should help their teams identify and eliminate (or at least mitigate) risks in their remote workplaces. Something as simple as a budget for ergonomic home office equipment could protect workers from injuries that would necessitate workers’ compensation claims.

Companies should also clearly define what their workers’ duties entail. Not all home computer activity is work activity, for example.

Some companies may attempt to do this by clarifying work hours, but since flexible hours are becoming more prevalent, this may not be a sustainable solution. Space-related, equipment-related, and task-related definitions are easier to formulate than time-related ones.

While workers may still successfully claim workers’ compensation for injuries that fall outside defined parameters, these definitions are useful as guidelines. That’s where a remote workplace policy comes in.

What is a remote workplace policy?

A remote workplace policy is like your average corporate employee handbook — except that the guidelines included are specific to remote work.

These guidelines might cover the following topics:

• Productivity expectations, including whether employees are allowed flexible hours or need to be able to work synchronously during certain hours

• Prescribed job duties

• A time and attendance policy

• Remote employees’ legal rights, including procedures on filing for remote workers’ compensation

• Home office safety standards, such as appropriate lighting and suitable desks and chairs

• Company policies or codes of conduct the employee needs to comply with even while working remotely

The last two points are particularly important because these guidelines show your state’s workers’ compensation board that you took steps to ensure the employee’s workplace is safe.

Remote work agreement safety checklist to send to employees

Sending a remote work agreement safety checklist to employees is key to ensuring a safe and productive work-from-home environment.

As an HR manager, you should send this checklist to employees before they begin their remote work. This proactive approach helps to identify potential safety hazards and address them before they become a workers’ comp issue.

It’s good practice to explain why you are sending the checklist. Use wording such as, “We are providing this safety checklist to help you create a safe and comfortable home office environment. Your well-being is important to us, and this checklist ensures that you have considered all necessary safety measures.”

You also want to inform remote employees about ergonomics. Emphasize the importance of a well-arranged, dedicated workspace to prevent strain or injury, and let them know the best practices they should follow for data security at home.

Here is a standard safety checklist you can use for your remote employees:

• Is there a dedicated work area?

• Are the monitor and keyboard placed ergonomically?

• Does the office chair provide good lumbar support?

• Is there enough lighting?

• Is the floor clear and free of tripping hazards?

• Are the phone lines and electric cables secured along the wall or under the desk?

• Do the plugs and cables in the electrical setups have any exposed or damaged wiring?

• Are the electrical outlets in working order?

• Are the rugs slip-free?

• Is there a smoke detector?

• Are space heaters or radiators far enough away from anything flammable?

Check in with your remote employees to confirm that they are working in a safe environment, so you can protect your business as well as your remote team members.

Best practices for using workers’ comp for remote companies

Sometimes you can do everything correctly, and yet, an employee can still get sick or injured on the job. If this happens, your priority should be the health and well-being of the employee.

Here are the steps to take if a remote employee is applicable for workers' compensation:

1. Ask them to seek medical attention

Make sure the employee gets the medical treatment they need. Give them time off to do so.

2. Assess the situation

Get the facts from the employee, using your company’s standard injury report form. Ask them for all the relevant details, including what happened, the cause of the injury or ailment, and where and when it happened. If it was an accident, ask if there were any witnesses.

3. Report the incident

The employee should report the incident immediately to their manager, who, in turn, should report it to an HR professional. Document the incident and report it to your insurance provider within 24 hours.

4. File a claim

Prepare a workers’ compensation claim. Ask the employee to compile their evidence, which may include their medical bills or rehabilitation costs. Then, submit all of this information to your insurance carrier.

5. Explain the next steps to the employee

Inform the employee of any time and attendance policies related to their illness or injury, and whether they need to submit any additional documentation to claim time for resting and recovering.

Keep them informed about the status of their claim as the situation evolves.

6. Make sure their workspace is safe

Help the employee come up with a plan to avoid future similar incidents. This should include fixing or removing the cause of the injury or illness submitted for workers’ comp.

7. Stay engaged

Let sick or injured employees know that they’re a valuable member of your team. You can send them flowers or a get-well card signed by the whole team.

In the case of an extended absence, see if your employee wants to work under a modified agreement with limited duties, as allowed by their physician.

This will help you budget claim costs, while your employee doesn’t have to worry about being out of work.

Do workers’ compensation laws vary by country?

Yes, workers’ compensation laws, insurance regulations, and their relationships to remote work vary from one country to another.

For instance, in Germany, workers' comp is part of a broader social insurance system that includes comprehensive rehabilitation and reintegration support. In Australia, workers' compensation includes a mandatory employer-funded scheme that covers medical and rehabilitation costs, with variations in benefits across states and territories.

So, if your company works with remote employees in different countries, it’s important to understand the workers’ comp parameters for these international hires.

But regardless of these different laws and regulations, you can help your remote employees prevent work-at-home injuries and illnesses from happening in the first place.

Establish a comprehensive remote work policy to ensure your employees have a safe work environment wherever they are.

Easily manage all types of workers’ compensation with Remote

Managing workers’ compensation compliance can quickly become overwhelming, especially for companies with employees in multiple countries.

In those cases, it’s very helpful to partner with an expert global HR management provider.

Remote can help you manage workers’ comp and other benefits for your employees around the world. Remote’s HR Management platform can also take care of payroll, taxes, and compliance challenges, so you can focus on growing your business. Contact us today to learn more about our global employment solutions.

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