Do you have workers in more than one state? Many things are more complex for employers whose workforce is spread out, and workers compensation insurance is no exception. To help you fulfill your obligations without paying unnecessary money, here are five key things to learn about before sending your next employee across state lines.
1. Minimum Hours Rules. Each state sets its own workers compensation rules, so don't assume that the process in your state looks like the process in another. If the work in another state is temporary—such as installing equipment at a customer location—first determine the minimum number of working hours or days for mandatory worker comp coverage. Your employees may not be affected if the job is short.
2. State Monopolies. Most states use a relatively free market workers comp system where you can shop around for coverage. However, a few states require everyone to use a state insurance provider. This will make finding coverage easier, but it also means fewer deals and the inability to bundle coverage.
3. Remote Work Rules. More and more employers let employees work from home. If you're one of them, your employees might live anywhere—including other states. However, the way in which remote workers are covered by workers comp insurance depends on the rules both for your business's home state and the employee's state. Familiarize yourself with both so you know what to do.
4. Subcontractor Coverage. Do you use subcontractors on remote job sites? Subcontractors and independent contractors can help relieve you of the burden of multistate workers compensation coverage. Most subcontractors are required to carry their own workers comp insurance if their business entity has any employees. But if the person works alone, you may be able to require them to insure themselves so you don't have to.
5. Interstate Ratings Systems. As mentioned, the state rules vary. Some states allow employers (or require them) to use ratings based on all states' claims history. This may or may not be better for your budget. If given the alternative, it's good to know how such a combined rating system may help or harm you.
Where to Start
Unfortunately, properly covering all your employees against injury and fulfilling your employer obligations can be complex. The best place to start is by meeting with an experienced workers compensation insurance agency—such as Tucker Insurance Agency—with experience in multistate issues. Make an appointment today to learn more about these important factors and others that may affect you.