Workers Compensation Insurance and the Gig Economy

Workers Comp

In 2014, Meghan Biro highlighted several salient points that help explain why businesses are moving more toward hiring telecommuters or allowing workers to telecommute instead of sit in the physical office space. “[H]aving remote and virtual employees is not only a way to get things done round the clock, without commuting, and with hard-to-find skill sets,” wrote Biro, “but is also a way to meet the needs of employees who don’t want to or can’t live near the mother ship.”

Since writing that article, the number of individuals choosing to telecommute has risen. What Biro labels as the “future of work” has also come under several different titles, most notably the “gig economy”. Employers are increasingly hiring workers on a part-time basis to get work done from any location. In fact, the growth of the gig economy has been noteworthy enough to receive direct attention from the Bureau of Labor Statistics, which now tracks the gig economy and its growth, labeling under “nonemployer business”.

Many businesses are utilizing telecommuting workers as a way to save money. However, many may wrongly assume that using such workers also frees them up from required liability insurance purchases, such as Workers Compensation. The Society for Human Resource Management (SHRM) answers the question regarding this issue very directly.  Are telecommuters covered under WC? “Yes,” states SHRM, which goes on to explain that “an employee injury or illness is compensable under workers’ compensation if it arises out of and in the course of employment, regardless of the location the injury occurs.”

Most businesses will likely note that it’s more difficult to verify that a telecommuting worker was performing job duties, or that the injury would have been otherwise unavoidable had the worker been in the physical workplace. However, the National Law Review notes that even a telecommuting worker who trips over the family dog on his or her way to the printer may have a successful Workers Compensation claim.

For all intents and purposes, businesses will still need to cover telecommuting workers for Workers Compensation. Hiring telecommuters does not free a business from its Workers Compensation purchasing requirements, nor does it free the business from Workers Compensation claims. Instead, businesses that do hire telecommuters need to be extra vigilant in providing those workers with proper safety procedures as they would with on-site employees.