With the advent of social engineering, portable computing devices and the growing popularity of telecommuting, new exposures and coverage issues have landed on workers compensation. Telecommuting is an attractive staffing option to both the employer and the employee. From the employer’s perspective, telecommuting allows savings in overhead costs and creates more satisfied employees. Telecommuting also enables the employee to save on work related costs such as clothing and other expenses, and provides the employee with time flexibility. With this flexibility and cost savings comes concern about the impact of this type of arrangement on workers compensation. This short article is a result of a presentation made by Compcheck during a recent WC Symposium and will provide an overview of these issues and potential solutions from a risk manager’s view.
Telecommuting creates issues with traditional workers compensation coverage. Primary, are the definitions of “employee” and “workplace” for the purposes of compensability. Currently, there is no State that provides assistance with either of these, therefore, both the employer and the employee are on their own. From decades of legal experience, it appears that because of the social nature of workers compensation, the Courts have taken a broad view of telecommuters and construe coverage whenever possible. Meaning, both employer and employee are relying on subjective interpretation of each Court District that relies on existing statutory language and the traditional interpretation of employment, i.e., the employer’s control of the “worker” and the “workplace”.
It is not the intent of this short discussion to address the intricacies and finer interpretations of workers compensation laws across our country. Compcheck executives will be more than happy to meet with you, at your convenience, and customize the discussion, however, it is widespread knowledge that Courts have liberally interpreted “employee control”, “employer’s premises” and “employee’s scope of employment”. Most States exclude “domestic workers”, however, they also differ in their definition of “domestic employees”.
Based on a review of all 50 State workers compensation laws and their provisions, it can be concluded that the original intent of the legislature was to exclude at least some types of home workers from workers compensation coverage. Likely reasoning being that the employer had no control over the home situation.
This same lack of employer control is present in telecommuting.
To this date, there have been no legal cases establishing any precedent. There are pro-and-cons both ways: (1) employer extends control to the employee’s home, workers compensation coverage applies, (2) employer does not exert control, there is a potential for more accidents and or injuries.
Under the above scenarios, an employer is damned if he does and damned if he doesn’t. But there are potential solutions.
In discussing this issue, we have narrowed down to four possible traditional solutions addressing the compensation exposures brought about by telecommuting. They are:
employee selection, and
legislative and or regulatory action
Noted above is the absence of an employer controlled solution from all four of these traditional solutions. Compcheck has implemented a 5th solution by which an employer obtains and retains control of all employees’ compensability and disability, not only in telecommuting, but also in all traditional employer-employee work related relationships. This proprietary solution not only has been judicially accepted but it has also been implemented by insurance carriers of the likes of Starr Companies, Hartford and others in both traditional and Self Insurance Retention type coverage.
The assignment of a workers compensation classification to telecommuting exposure is the right beginning. The issue of “when and where” workers compensation coverage begins and ends has not as of yet been decided; by the time it does, an enormous amount of capital would have been expended. We can all wait for State legislatures to address this issue beginning with the exact definition of what constitutes “telecommuting”. I am sure that all of us are holding our breaths for this to happen.
Or you can contact us for a private, no obligation, consultation in an attempt to control and reduce workers compensation costs.
Tony Damoulis is our Director of Operations and Risk Management. In this position he responsible for all risk, liability and claims management SIR needs of our direct clients and assists our broker clients with developing unique and innovative solutions to improve coverage and lower insurance costs for their accounts. Tony may be reached by email directly through his name link above.