What does workers’ comp look like for remote employees?

The COVID-19 pandemic has forever changed the way millions of people work. Even though vaccines are being administered and extra precautions are being made to keep businesses open and safe, the work-from-home trend is unlikely to end. In fact, Upwork estimates that 22% of the workforce (36.2 million Americans) will work remotely by 2025.

This begs the question: What happens if an employee working remotely suffers an injury? Are employees still covered under workers’ comp insurance? While the COVID-19 pandemic has significantly altered everyday life, remote work is not a new concept.

When it comes to protecting businesses and employees, it is critical to understand workers’ comp guidelines for remote staff. There are a few basic remote-work requirements and tips that insurance providers and business owners should be aware of.

There is one major question that insurance providers and business owners have been wondering: Does workers’ comp cover employees working from home? The short answer is: Sometimes. It all depends on the specific nature of the injury, the state of the workplace and the details of the insured’s remote-work policy.

How do you define “work-related injuries” for remote workers? In general, an employee injury or illness is compensable under workers’ comp insurance if it “arises out of and in the course of employment,” regardless of where the injury occurs. “Arising out of” relates to what the employee was doing at the time of the injury and “in the course of” relates to when the injury happened.

A workplace injury may occur suddenly (like a minor burn) or develop over time (like carpal tunnel syndrome). In either case, a compensable injury must have occurred during work hours and from an activity related to the employee’s job.

Often, the hurt employee has the burden of proving that the injury was work-related and needs adequate evidence in their favor. Since many telecommuters are home alone while they work, there may not always be someone who can corroborate the incident.

Consider the case Verizon Pennsylvania v. Workers’ Compensation Appeal Board (Alston). In 2006, an employee was working from home when she fell down the stairs to her home office, injuring her neck. She had been working in her basement home office when she went upstairs to get a drink. She fell walking back downstairs to the office to answer a ringing phone.

Even though she had briefly stopped working to get a drink, the workers’ compensation judge, Workers’ Compensation Appeal Board and the Commonwealth Court ruled in favor of the injured worker. The Commonwealth Court determined that the home office was an approved “secondary work premise.” The claimant was injured in the course and scope of her employment, so benefits were awarded.

State laws differ when it comes to what’s considered a “work-related injury,” so it’s important to define each employee’s normal working hours and specific job duties to help determine what is — and is not — a work-related claim.

If a business has even one employee, it’s most likely required by state law that the company have workers’ comp insurance, regardless of employees being remote or not.

It’s common for business owners to think they don’t need to purchase workers’ compensation insurance if work operations are low-risk and they have only a few employees. However, that’s a very risky assumption to make. If they don’t have their state’s required workers’ comp coverage for employees, they are at risk of being charged with fines, penalties, and even imprisonment, depending on the severity of the state’s law.

Since supervisors cannot directly monitor the actions of remote workers, business owners may be at an additional risk of liability for these employees. To reduce the risk of injury in an employee’s home-based workspace, it’s important to take thorough precautions to ensure that home offices are safe work environments. These precautions can include setting fixed work hours and meal and rest times for remote workers to better define “in the course of employment,” establishing standards for a home office, such as requiring a designated and dedicated work area, and providing training on workstation setup and safety measures, including ergonomic best practices.

The COVID-19 pandemic has significantly impacted how business is conducted. Business leaders must continue to adjust, be flexible in how they operate, prioritize employee wellness and keep up to date on changing workplace best practices.

Dax Craig (dax@pieinsurance.com) is co-founder and president of Pie Insurance.