Defined: What is Workers' Compensation?

Workers’ compensation is a critical way for employers to protect their employees and their organization. Even though workers’ comp is nothing new for HR teams and employers, COVID-19 has shifted the worksite from office to home for many employees. What do employers need to know about workers’ compensation when their workforces are operating outside of the office?

Defined: What is Workers’ Compensation?

Workers’ compensation—often just called “workers’ comp”—is a type of business insurance that provides benefits to employees who suffer job-related injuries or illnesses. These funds help workers pay for their missed wages, medical treatment, ongoing care, and disability leave. 

Most organizations must have workers’ compensation insurance, but the requirements, laws, and regulations vary by state depending on size and industry. Therefore, it’s important for employers to familiarize themselves with their specific state’s laws. States may have exceptions for workers’ compensation including organizations with few workers, seasonal workers, temporary workers, agricultural workers, and independent contractors.

How Does Workers’ Compensation Work?

Workers’ compensation benefits are paid for by employers of the state. Since workers’ comp systems vary from state to state, employers usually pay for workers’ compensation either by premiums to state-run insurance programs, payments to an insurance company, or directly to employees.

In order to qualify for workers’ comp, employees have to provide medical and factual proof of the following under the Federal Employees’ Compensation Act (FECA) in their claim: 

1. The employee’s claim was filed within FECA time limits
2. The injured person was an employee as defined by FECA
3. The injury or accident occurred and the employee was diagnosed with a medical condition connected with the event
4. The employee was “in the performance of duty when the event(s) leading to the claim occurred,” as stated by the DOL
5. The medical evidence proves that the diagnosis is causally related to the event\
   
   

Are Employees Covered by Workers’ Comp While Working From Home?

Generally speaking, employees are still covered by workers’ compensation while working from home during COVID-19. If the employee is working in the interest of the organization while the injury or illness occurs—and since home is considered the office premises while employees work remotely—the employee is still covered under workers’ compensation. 

According to SHRM, employee injuries and illnesses are “compensable under workers’ compensation if it arises out of and in the course of employment, regardless of the location the injury occurs.” Employers can make sure they maintain compliance and keep employees safe while they are telecommuting by developing remote work policies to ensure home offices are safe and staying up-to-date on state-specific worker’s comp laws.