Do I need workers' comp for an employee in another state?
Usually yes. Workers' comp follows where the employee works, and an employee working from home in another state is generally working in that state. That state belongs in Item 3.A of your policy, the list of states whose law it covers. Item 3.C, other-states coverage, is a backstop for work that starts after the policy begins. It does not replace listing a state where someone already works.
Updated . Written by Andre Beukers, principal at Redoubt, a commercial insurance agency in Salt Lake City, not a government office.
Do remote and out-of-state employees need coverage in the state where they work?
In most cases, yes. States look at where the work is done, not where the business is registered. Washington's Department of Labor & Industries treats an employee as based in the state they "live in, if they also work from that state (such as telework)." The New York Workers' Compensation Board requires a full New York policy from an out-of-state employer with "employees whose primary work location is in New York."
A home address alone does not add a state. New York does not require its coverage for a resident who does no work in New York and receives no direction from the employer at home, when the employer is a business whose only locations are outside New York.
What is the difference between 3.A and 3.C on my policy?
In NCCI states, both are lines on the information page of the standard policy, form WC 00 00 00 C; other states' forms can label them differently. The policy covers the workers' comp law "of each state or territory named in Item 3.A." Item 3.C applies in one situation: "If you begin work in any one of those states after the effective date of this policy," the policy applies "as though that state were listed in Item 3.A."
States can also limit 3.C. New York accepts it only for infrequent meetings, "not more than one per month," or travel through the state. A primary work location, construction work, or 25 or more employee-days there in the prior year needs New York in 3.A.
What if the employee's state isn't on my policy?
It depends on when the work there started. If it began after the policy's effective date in a state listed in Item 3.C, the policy treats that state as listed in 3.A, provided you "tell us at once." If the work was already underway at the start, "coverage will not be afforded for that state unless we are notified within thirty days." An employee who moved last year and was never added at renewal is exactly that case.
Washington L&I says that if an out-of-state insurer denies a claim because it occurred in Washington, the employer is liable for "all unpaid premium, penalties, interest, and claim costs."
Is my employee covered on a short job in another state?
Often, through the home state's extraterritorial rule. Under Utah Code 34A-2-405, an employee hired or regularly employed in Utah who is hurt outside Utah gets Utah benefits within six months of leaving, unless the employer files to extend that period. California Labor Code 3600.5(a) gives California benefits to an employee "hired or is regularly working in the state" who is hurt outside California, with no six-month cutoff.
The destination state decides whether it accepts that. Utah Code 34A-2-406 and California's 3600.5(b) exempt an out-of-state employee temporarily in the state when the home-state policy covers the work there and the home state returns the courtesy. Washington L&I has reciprocal agreements with Idaho, Montana, Nevada, North Dakota, Oregon, South Dakota, Utah, and Wyoming; the Montana and Nevada agreements exclude construction. Check the destination state's agency before a crew travels.
What if my employee moves to another state?
Treat the move as a policy change, not only a payroll change.
- Tell your agent or carrier before the move date: the new state, job duties, and expected payroll there
- Ask for the new state to be added to Item 3.A by endorsement rather than relying on 3.C
- For North Dakota, Ohio, Washington, or Wyoming, open a state fund account unless you are certified self-insured; Washington's law "does not allow for private workers' compensation coverage"
- Tell the carrier the new state and expected payroll there; final premium is set from payroll and classification at audit
Item 3.A vs Item 3.C, line by line
From the wording of NCCI form WC 00 00 00 C.
| Item 3.A | Item 3.C (Part Three) | |
|---|---|---|
| What it is | States whose workers' comp law the policy covers | States where coverage switches on if work starts later |
| What you must do | Report payroll at audit | Tell the insurer at once when work begins |
| Work already underway at the start | Covered | Not covered unless the insurer hears within 30 days |
| ND, OH, WA, WY | State fund only, unless certified self-insured | State fund only, unless certified self-insured |
Requirements depend on the business, where each employee works, and the current instructions of each state's workers' compensation agency.
Where these answers come from
Statutes, state agencies, and rating bureaus. Requirements depend on the business, the worker setup, and the current instructions of the state agency, so check the source for your state before acting.
The next question
Workers’ comp requirements in every state
Each state page gives the employee threshold, the owner and officer exemptions, the penalty for going without, the rating bureau, the market, the enforcing agency, and the exemption filing, each with its statute or agency source.
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Employees in another state FAQ
Does 3.C other-states coverage cover a remote employee?+
Only for work that began after the policy's effective date, and only if you told the insurer at once. A state where the employee already worked belongs in Item 3.A.
Do I need a separate policy for each state?+
Usually not; one policy can list several states in Item 3.A. North Dakota, Ohio, Washington, and Wyoming are the exceptions, since coverage there comes only from the state fund, unless the employer is certified self-insured.
Which state's law applies if a remote employee is hurt at home?+
Generally the state where the employee lives and works. The hiring state's law can also reach the injury, as Utah Code 34A-2-405 and California Labor Code 3600.5 do.
Adding a state before someone moves?
Text Redoubt the employee's new state, job duties, and expected payroll there. We will check your information page and tell you what belongs in 3.A and what to send the carrier.
This is general insurance information, not legal advice or a coverage determination. Statutes, agency instructions, policy forms, and the facts of the business control.