Employers whose principal place of business and associated operations are located in a single state typically have to concern themselves with only applying for and obtaining workers’ compensation coverage in one state. However, some employers, while having their operations in one state, may dispatch their employees to other states for purposes such as servicing customers, installing products, transporting goods or constructing facilities. In these cases, the employer should be sure to notify its workers’ compensation insurance carrier, insurance agent and third-party administrator of this fact and of the business activities which are taking place in other states. While it is beyond the scope of this alert, there may also be corporate law issues associated with such out-of-state work, including the need to qualify to do business in other states and to register with other state departments of revenue.
Regarding workers’ compensation, when an employee is dispatched to another state, there is a possibility that the workers’ compensation coverage limits, financial assurance obligations (in the case of self-insured employers) and other administrative details may be different than in the employer’s “home” state. Since workers’ compensation benefits are state specific, for the most part, it is also possible that an employee may perform work in a state that provides greater (or lesser, for that matter) benefits than the “home” state for the same injury.
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