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Extraterritorial Workers’ Compensation Coverage Concerns

October 08, 2021

Man working from home with laptop feeling wrist painAs members sort through issues of having employees work remotely, questions have arisen regarding an employee’s eligibility for workers’ compensation benefits if he or she sustains a work-related injury while working from home when the employee’s home is not in Minnesota.

During the period that the governor’s executive order required employees to work from home when possible, it was MCIT’s position that working remotely out of state was temporary and in response to a public health emergency, so any illness or injury sustained should be subject to Minnesota workers’ compensation laws and benefits (Minn. Stat. 176). Fortunately, no situations arose that tested this position.

After the expiration of the governor’s order, some members have allowed or will require employees to work remotely. As a result, MCIT has concluded that the jurisdictional and territorial constraints of workers’ compensation likely return for those employees who work permanently from a remote location out of state.

Workers’ compensation operates under a set of laws unique to the specific state where the employee works, not where the employer is located. MCIT is formed under Minnesota law and is, therefore, unable to provide extraterritorial workers’ compensation coverage for members whose employees’ permanent work locations are outside of Minnesota. MCIT looked into options to provide this coverage but found that while many members will allow employees to work remotely, it is generally not on a permanent basis or out of state.

MCIT surveyed the 373 members that participate in the workers’ compensation division. Of the approximate 30,000 employees eligible for workers’ compensation, the survey found that 204 employees are working remotely out of state on a permanent basis.

In light of these results, MCIT recommends that members whose employees will permanently work from a remote location outside of Minnesota contact an insurance agent in that state(s) and secure workers’ compensation coverage for these employees.

Members are also encouraged to consider other personnel/employment issues, such as income taxes, pay equity, Family and Medical Leave Act, Occupational Safety and Health Administration requirements, Fair Labor Standards Act, etc. when allowing or requiring employees to work remotely when that remote location is not in Minnesota.


Remote Workers Survey Results

MCIT surveyed members that participate in the workers’ compensation division about employees’ remote work. One-hundred-ninety-six members responded, which included all 80 participating counties.

The survey disclosed that 204 employees will likely meet the criteria of permanently working from a remote location out of state.* The majority of these are employees of Nobles County (11), Winona County (28) and Washington County (91).

*“Permanent” is defined as the employee’s home being his or her regular workplace with an occasional visit to the employer’s facility. “Occasionally working remotely” is defined as flexing time at the employer’s facility and working remotely from a location outside of Minnesota (e.g., three days at the employer’s facility and two days working remotely).