What counts as a workers compensation claim?

If any of your employees suffer a work-related injury, workers comp claims are designed to pay for medical care and lost wages, among other potential costs. While this may sound simple and straightforward, the situation is a bit more complicated, especially when taking into consideration the location of your business.

Differences in what constitutes a work-related injury and what types of workers are covered can often lead to confusion and unpleasant gaps in coverage. To help you avoid this, let’s dig deeper into what would count as an appropriate workers comp claim based on your industry and geographical location.

What will a workers comp policy cover?

First and foremost, workers compensation laws differ by state, so it’s important to understand your state’s workers comp requirements to stay compliant. Also, not all states manage workers compensation in the same way:

1. Four U.S. states — North Dakota, Ohio, Washington, and Wyoming — are “monopolistic” states, meaning the state provides employers with the insurance policy; and
2. All other states, including the District of Columbia, to insurance companies to provide the coverage.

Most states tend to agree that for an injury to be considered work-related, it has to happen while the employee is carrying out a task for the employer or during employment — this is often referred to as a “course and scope” test. Typically, these injuries occur in the workplace. If an employee is injured while on lunch break, the injury may be covered by workers comp if it happens on the employer’s property, or is connected to the course of employment (for example, a business lunch in a restaurant).

However, even if the employee is injured at a different location, the injury may be considered work-related as long as it happens while they are acting on behalf of the employer. According to Larson’s Workers’ Compensation Law, injuries may be compensable if the employee was expressly or implicitly required to attend the event or if the event provided a significant benefit to the employer beyond employee morale.

Larson’s Workers’ Compensation Law, a law book cited by courts in workers comp cases in all U.S. states, outlines three key facts that determine whether workers comp will cover recreational activities:

1. Whether the employer expressly or impliedly requires participation
2. Whether the employer derives a benefit from the employee’s involvement beyond the employee’s health and morale
3. Whether the activities occur on the employer’s premises during lunch or a recreation period as a regular incident of employment

So, while workers compensation policies exclude intentional injury, in some cases, recreational activities such as team-building events or office parties are compensable if employees do not opt out of participating. 

Looking to purchase a workers comp policy? You can get your instant workers compensation insurance quote with Embroker in just a few minutes.

Who does workers compensation cover?

We’ve addressed the fact that most employers must carry workers compensation insurance for their employees. But who exactly is an “employee” from an insurance standpoint?

While this varies from state to state, the IRS classifies an employee as anyone who performs services for a business where the company controls both what work is done and how it is done. The factors that designate someone as an employee are:

• A specific salary
• An existing verbal or written contract
• The employer controls the work they perform

Again, state laws ultimately define “employees” under workers compensation.  What this means in practice is that in many states, domestic, agricultural, seasonal workers, and undocumented workers are not covered under an employer’s workers comp policy without a specific endorsement. 

Other employee types, such as those who work on docks, military bases, or fishing vessels, require specific endorsements to ensure coverage under the policy.

Additionally, federal government employees are covered under federal programs (such as FELA) and aren’t subject to their state’s programs. 

State-by-state workers compensation coverage

As we mentioned, each state has different workers comp laws. Let’s break down which workers are typically not covered on a standard, unendorsed state-by-state basis. This may be because they are covered elsewhere (e.g., homeowner’s policy, specific state program, etc.) or may not meet the state’s definition of “employee” (such as independent contractors)

Alabama:

–Domestic servants
– Farm laborers
– Casual employees
– Those working for a business with fewer than five people
– Licensed real estate brokers
– Product demonstrators

Alaska:

– Part-time babysitters
– Domestic servants
– Harvest and similar non-permanent help
– Contracted entertainers
– Statutorily-defined taxi cab drivers
– Statutorily-defined commercial fishermen

Arizona:

– Casual employees
– Domestic servants
– Independent contractors

Arkansas:

– Agricultural farm laborers
– State employees
– Casual employees
– Inmates

California:

– Domestic employees employed by family members
– Deputy sheriffs or clerks
– Anyone performing services in return for aid or sustenance only
– Anyone officiating amateur sporting events
– Volunteers at non-profit recreational camps

Colorado:

– Inmates
– Volunteers
– Drivers under a lease agreement with a common carrier

Connecticut:

– Sole proprietors
– Business partners
– Independent contractors
– Casual employees

Delaware:

– A spouse and minor children of a farm employer not named in an endorsement to the farm employer’s contract of insurance
– Casual employees

District of Columbia:

– Employees whose employer is an uninsured subcontractor can assert a claim against the general contractor

Florida:

– Independent contractors NOT in the construction industry
– Licensed real estate brokers
– Musicians and theatrical performers
– Causal employees,
– Volunteers (most)
– Some Vehicle-for-hire drivers
– Some sports officials

Georgia:

– Railroad workers engaged in interstate or intrastate commerce
– Farm laborers
– Domestic servants
– Licensed real estate salespeople or associate brokers
– Independent contractors

Hawaii:

– Almost none (a few exceptions for primary and secondary contractors)

Idaho:

– Domestic servants
– Casual workers
– Pilots flying in agriculture
– Real estate brokers and real estate salesmen
– Volunteer ski patrollers
– Officials secondary school sports events

Illinois:

– Real estate brokers
– Farmers
– Jurors

Indiana:

– Railroad workers
– Employees of fire or police departments
– Casual laborers
– Farm or agricultural employees
– Household employees

Iowa:

– Household employees earning less than $1,500 during 12 months before an injury
– Casual employees earning less than $1,500 during 12 months before an injury
– Agricultural employees where the employer’s nonexempt cash payroll is less than $2,500 for the preceding calendar year
– Relatives of farm employer and the employer’s spouse
– Some corporate officers

Kansas:

– None

Kentucky:

– Domestic servants, if there are fewer than two regularly employed in a private home for 40 hours or less per week
– Maintenance, repair, and similar employees employed in a private home

Louisiana:

– Household employees and workers of private unincorporated farms
– Musicians and performers

Maine:

– Independent contractors
– Maritime employees covered under admiralty law
– Certain agricultural workers

Maryland:

– Independent contractors

Massachusetts:

– Workers on vessels engaged in interstate or foreign commerce
– Those working in organized, professional athletics
– Real estate brokers
– Commission-only salespeople
– Persons employed by an employer engaged in interstate or international commerce
– Casual workers

Michigan:

– Smaller employers
– Some agricultural employees and domestic workers
– Real estate brokers

Minnesota:

– Farmers or their families who exchange work with other farmers

Mississippi:

– Independent contractors

Missouri:

– Leased truck operators in interstate commerce
– Farm workers
– Domestic servants
– Family chauffeurs
– Licensed real estate agents
– Inmates
– Volunteers
– Sports officials

Montana:

– Domestic servants
– Casual workers
– Dependent member of the employer’s family
– Sole proprietors
– Real estate brokers
– Certain officials at athletic events
– Freelance photographers and authors
– Newspaper carriers
– Cosmetologist or barbers
– Jockeys
– Ordained ministers
– Officer or manager of a ditch company
– Persons working for enrolled tribal members who operate solely within the boundaries reservations
– Petroleum land workers

Nebraska:

– Domestic servants
– Agricultural employees
– Railroad workers employed by companies engaged in interstate or foreign commerce

Nevada:

– Casual employees
– Theatrical or stager performers
– Musicians whose services do not last more than two consecutive days
– Domestic workers
– Voluntary ski patrol
– Sports officials paid a nominal fee
– Any member of the clergy
– Real estate brokers
– Direct salespersons working on commission

New Hampshire:

– Railroad workers engaged in interstate commerce
– Direct sellers
– Real estate brokers and appraisers
– Service providers for individuals with developmental, acquired, or emotional disabilities

New Jersey:

– Independent contractors
– Domestic workers
– A willfully negligent employee
– Inmates
– Casual workers

New Mexico:

– Farmworkers
– Domestic servants
– Real estate agents
– Anyone who waives their coverage

New York State:

– Domestic employees working less than 40 hours per week
– Clergymen
– Employees of municipalities not engaged in hazardous employment
– Sanitation workers, firefighters, and police officers in the employment by the City of New York
– Babysitters and minors over the age of 14 engaged in casual employment
– Longshoremen and harbor workers
– Railroad employees

North Carolina:

– Casual workers
– Independent contractors
– Anyone engaged in an illegal enterprise
– Real estate brokers and agents
– Board members
– Newspaper deliveries

North Dakota:

-Owner, partner, corporate officer, or spouse
-Employer’s children under the age of 22
-Certain licensed real estate brokers
–Newspaper delivery personnel
-Farm and ranch labor
-Certain custom farm operations
-Household domestic workers
-Employees engaged in the operation of a place of worship
-Federal and railroad employees

Ohio (Monopolistic):

– None

Oklahoma:

– Horticulture workers are not using motorized machines
– Licensed real estate brokers
– Medical care or social services employees
– Employers with fewer than five employees if they are all related by blood or marriage
– Youth league employees, if they are tax-exempt
– Sole proprietors
– Volunteers
– Domestic servants
– Leased truck and tractor-trailer operators

Oregon:

– Inmates or wards of a state institution
– Casual employees

Pennsylvania:

– Casual employees

Rhode Island:

– Employees of the state
– Casual employees
– Farmers and farm laborers
– Nursery workers
– Real estate brokers
– Salespeople

South Carolina:

– Casual employees

South Dakota:

– Volunteers
– Independent contractors
– Domestic servants working less than 20 hours per week
– Farm laborers

Tennessee:

– Undocumented workers

Texas:

– Independent contractors
– Federal employees

Utah:

– Real estate agents and brokers

Vermont:

– Casual employees
– Amateur sportsman
– Agricultural employees for an employer with an aggregate payroll of less than $10,000 per year
– Family members living in the employer’s house
– Those engaged in service at a private dwelling
– Sole proprietors
– Real estate brokers or salespeople
– Certain members of a corporation or LLC are Independent contractors
– Assistant judges
– Illegally hired minors

Virginia:

– Employees who are not employed within the usual course of the employer’s business

Washington (Monopolistic):

– Workers for businesses registered within the Registration of Contractors
– Licensed electricians
– Domestic servants
– Home gardening and maintenance workers
– Workers performing services in return for aid or sustenance
– Sole proprietors or partners
– Minors employed by parents in agriculture
– Jockeys
– Corporate officers
– Entertainers
– Newspaper deliveries

West Virginia:

– Domestic servants
– Agricultural employers of fewer than six full-time employees
– Church workers
– Casual employees
– Employees engaged in organized, professional sports activities
– Volunteer rescue or police
– Federal employees

Wisconsin:

– Domestic servants
– Most volunteers

Wyoming (Monopolistic):

– Casual employees
– Sole proprietors
– Corporate officers
– Independent contractors
– Professional athletes
– Federal government employees
– Elected officials
– Volunteers, members of LLCs
– Foster parents
– State childcare workers

The takeaway

In most states, companies must provide workers compensation benefits if an employee of the business gets hurt during their employment. You can also read more about the coverage and get your workers compensation quote in just a few minutes.