Understanding Insurance Claims

Ensuring a Multi-State Company Meets Workers Compensation Insurance Laws

Workers' compensation laws differ from state to state. Some have very strict rules while others have lax rules or even no rules about providing workers' compensation insurance for employees. If your company is opening branches in other states, these laws could prove to be tricky to work with if you're not careful. You can't assume that your state's requirements (or lack thereof) for workers' compensation insurance will apply to all your branches. Read on to learn more. 

The Law Follows the Employee

Regardless of how well you stick to workers' compensation insurance laws in your company's home state, the laws that actually apply will follow the employee, meaning that wherever the employee goes, those are the laws that you have to follow. Your employee in Arizona is eligible for workers' compensation coverage that meets Arizona's standards, not the standards of your home state. Technically, this does mean that employees in states with standards that are laxer than those of your home state would be eligible for coverage that was in line with the less-strict standards. However, it is nice to still provide those employees with better coverage that meets the higher standards of your home state receive.

One Policy Meeting the Strictest Standards

When you have employees in different states, it can be cumbersome to keep track of all the different requirements, such as tax laws, workers' compensation rules, and so on. Some companies get around this by having satellite benefits departments stationed at an office in each state. However, if your company is set up so that the main offices are in one state and you have just a few employees working from home in different states, you may want to establish benefits and insurance that meet the standards of the strictest state in the bunch. While that might be more costly, you'll at least be meeting all requirements without creating too much of an administrative hassle for yourself.

Temporary Assignments Count, Too

Remember that temporary assignments count as well. If someone from your Texas company (a state where workers compensation isn't exactly required of every employer) goes to work on an assignment in California for four months, for example, you need to get California-compliant workers' compensation coverage for that employee.

Contact workers' comp insurance companies to see if they offer policies in all relevant states and which policies meet each set of standards. You can then look for policies that meet requirements from all states to make things easier.