Are employees covered by workers’ compensation while working from home? Yes. Employees are responsible for demonstrating that they were carrying out employment activities at the time of sustaining an injury and it is the business owner’s responsibility to provide work comp for remote employees. As long as the employee is able to demonstrate the foregoing, courts have held that it is inconsequential that employers are unable to control the remote working environment of the employee. Courts have also established that the house hazards of an employee working from home are to be considered as employment hazards. Employers have a legal responsibility of providing a conducive working environment for their remote employees.
In the case of Verizon Pennsylvania vs Workers’ Compensation Appeals Board, the plaintiff, an employee fell backward down the stairs on her way to getting a drink as she tried to turn back and answer a work-related call. Even though she was technically on a personal break, the court held that her home office was an approved secondary work premise and that she was entitled to workers’ compensation.
Case law has laid out the following principles that employers can consider in order to minimize workers compensation claims by their remote employees:
Fair Labor Standards Act (FLSA) Compliance
The Department of Labor (DOL) issued guidelines to support employers to comply with FLSA when dealing with remote employees. FLSA establishes a significant burden on employers, stating that they should have actual or constructive knowledge of the hours an employee works. If an accident happens while working from home, it is these FLSA requirements that will be used to determine the eligibility of remote workers’ compensation claims.
1. Considerations for Non-Exempt Employees
Non-exempt employees are those who earn less than $684 weekly or have a limited scope of self-supervision. They’re entitled to overtime pay of at least 1.5 of their hourly wage when they work for more than 40 hours a week. Employers are required by FLSA to compensate non-exempt employees for all hours worked including overtime even if the work done was not requested or permitted.
2. Exempt Employees Considerations
The list of exempt employees varies from state to state but generally includes professionals such as administrative officials, executives, outsourced sales, highly compensated individuals, and computer technicians. They earn a minimum of $684 per week or $35,568 annually. Exempt employees are guaranteed the statutory minimum salaries even when they do not work full days or weeks.
Employers have the responsibility of ensuring that non-exempt employees do not engage in unscheduled work. According to the law, employers should not only forbid non-exempt employees from engaging in unscheduled work but also ensure that they adhere to such requirements by enforcing the relevant policies. Employees are entitled to overtime even if the work they do was not approved or required but “suffered and permitted.”
Employers must put in place channels through which employees can report unscheduled work. If the employee doesn’t proactively report unscheduled work, the employer is required not to investigate to uncover unreported hours.
Work from home employers’ obligations under unscheduled hours include:
- Establish a process for the employee to report unscheduled hours worked and then compensate the employee for such hours. Compensation is done whether or not the hours were requested or approved.
- Provide clear rules relating to unscheduled hours, which include a requirement for employees to report all hours worked, prohibition of off-the-clock work and a process for employees to review and confirm hours worked for each pay cycle.
- Train employees on how to effectively use the company’s time tracking and reporting system.
If an accident occurs during the hours, a non-exempt or exempt employee is eligible for remuneration. Also, the employee will be eligible for workers’ compensation.
Development of a Remote Work Policy also known as Telecommuting Policy and Procedure
A remote work policy should outline the employer’s expectations in terms of working hours, job description, meal, and rest periods for the remote employees. In addition to the FLSA consideration, the policy should contain:
- Home or remote office guidelines including designated work area; provide insights on establishing a workstation, including ergonomics considerations and safety measures.
- Design a system of regular catch-ups with your employees to help identify and address stressors or hazards in the work area.
- Disability considerations as provided by the Americans with Disability Act (ADA).
All the above factors will come into play when assessing the viability of workers’ compensation for home office. If your employee, for instance, develops back problems due to her/his posture during work, then your company is liable to pay worker’s compensation.
Responsibility for the Risk of Non-Compliance
The legal obligations employers have towards their remote employees may seem to overshadow the potential benefits of working with a remote team. However, partnering with a PEO to help you manage a distributed team and provide work comp for remote employees, mitigates your risk exposure since the PEO is the employer on record in two ways:
- A PEO Better Understands the Legal Requirements
Your PEO of choice is ideally in a better position to understand and comply with the numerous legal obligations employers have towards their remote teams. PEOs are essentially a team of HR and labor law experts which qualifies them to take up the responsibility of managing your team. Management includes ensuring legal compliance to human-resource-related laws, development of the relevant policies, and ensuring the implementation of the policies.
- PEO Shares the Responsibility for Non-Compliance
Since the PEO is the co-employer on record, the entity shares the risk for any non-compliance penalties as articulated in the tax laws and FLSA. You will have peace of mind knowing that the PEO is not only equipped to handle the legal risk arising from having a remote team but also will share the consequences for any legal mishap, and in turn, will help fight against fraudulent claims.
Summing It Up
Working with a PEO can help your company minimize workers’ compensation claims by remote employees. You will be free to focus on the core of your business, while the PEO handles the burden of employment management.
If you’re considering working with a PEO, contact MartinoWest and we will match your business with a suitable Professional Employer Organization within our network.