Remote Worker Workers Comp Insurance Still Required
We received this remote worker workers comp insurance question from a reader last week. The company considered keeping 40% remote workers level even though the trend recently leaned towards returning employees to in-office work.
Question
We are a health-based company operating in three states. After the pandemic, we slowly ramped up production to pre-2020 levels. Almost 1/2 of our staff can still be offsite working from home. Do we still need to provide remote worker workers comp insurance even though the remote workers have a reduced chance of injury? Can we make them all 1099 subcontractors? Can we reduce the workers comp insurance we pay for our remote workers?
Answer on Remote Worker Workers Comp Requirement
Congrats on your company’s successful recovery after the pandemic. Many companies such as yours realized that many workers can still productively work remotely or from home which can save overhead costs such as office space, utilities, etc.
One possible way to save comes to mind. Let us cover that last.
A Serious Remote Worker Injury
Even though the workers will not return to in-office work, they are still your employees. Many injuries have occurred with in-home workers over the last 20 years. For example, one of our major clients had a remote worker who worked 18 hours a day – productive employee. She had such a heavy eyestrain that the treating ophthalmologist related the corneal tear injury to her work. The claim incurred payouts of over $150,000 due to her being out of work for more than three years and for the extensive medical bills to save her eye. The costs are ongoing.
The risk may have been lowered with remote workers, but they still do carry a risk of injury. If you are paying them as employees, workers comp would still be a requirement in almost every instance.
1099 Workers
A company cannot eliminate the need for remote worker workers comp insurance. If one of the workers are injured at home, who would be responsible for their time out of work and medical bills such as with the corneal tear injury?
Any premium auditor will catch this list of subcontractors as former employees. If your goal is saving on Workers Comp, you may end up paying for the former employees regardless and your carrier may cancel your company mid-policy term for attempting this method.
Each state is unto itself on Workers Comp. Check out the IRS rules on subcontractors here. The Publication is called 15-A or you can check out this post on the same subject.
Remote Worker Workers Comp Possible Savings
If your company has onsite and/or offsite administrative assistants, billing department workers, and other types of workers, then a delineation should be made between these workers. Why? Because onsite workers carry more risk than do the offsite workers. These employees may need to be classified under different classification codes such as 8810 or 8871. Each state has their own rules on who classifies as a clerical worker or a telecommuting employee.
You could possibly be charged manufacturing class codes for remote workers especially now that most in-person physical premium audits have not begun post-pandemic.
