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Workers' comp for out-of-state employees

November 11, 2022
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You may have employees working out-of-state. Here are some important considerations to discuss with your Pinnacol agent or underwriter about whether you need to adjust your workers’ comp policy to protect employees working in other states.

How do you know if you should add another state to your workers’ comp policy?

A critical step in determining whether you’ll need to modify your workers’ comp policy to cover an employee working out-of-state is understanding the requirements within the state where the work will be performed.

Each state has its own workers’ compensation laws, and you want to ensure you comply with those laws, whether your employee is working on a temporary contract or in a permanent location.

We recommend you contact the workers’ compensation governing body in the state where the employee will be working. You can also reach out to your agent or underwriter to help you understand the other states’ requirements.

What do you need to know?

Your agent or underwriter will be familiar with the details of your policy and the workers' compensation law that protects your Colorado employees. It's important for you to know that there are limited protections in place if a Colorado employee temporarily works outside the state, included in the statute as an "extraterritorial provision."

In addition, your policy includes a "Limited Other States Endorsement," which explains possible reimbursement based on specific conditions related to an out-of-state injury. It’s also important to note that some states offer reciprocity. You can contact your agent or underwriter to learn more.

How does Colorado define “extraterritorial,” and why is it important for businesses with employees working out of state?

Colorado defines “extraterritorial” this way:

“Extraterritorial is the extension of state workers’ compensation law to provide benefits for workers hired in a particular state but injured while working in another state. There is usually a maximum placed on the amount of time an employee can spend outside the state of hire and still file a claim in that state.” Colorado’s provision in the statute allows a Colorado employee to temporarily work for six months in another state.

What is “reciprocity,” and how do you know which states reciprocate with other states?

Reciprocity is an agreement between two states that they will mutually accept the other state’s extraterritorial provision, as defined above.

However, not all states reciprocate with one another. The best way to determine if there is a reciprocity agreement in place is to contact the workers’ compensation governing body within the state in which your employee is performing work.

Does Colorado offer reciprocity with other states?

As of 2022, Colorado is a non-reciprocating state. 

When should you consider making changes to your workers’ comp policy?

Anytime you have a Colorado employee working outside the state, whether they are temporarily working there or you are setting up a permanent location, you may need to make changes to your policy.

It’s important to ensure your business and employees are fully protected. Please contact your agent or underwriter to discuss getting coverage for an employee working out of state.

Pinnacol Assurance assumes no responsibility for management or control of customer safety activities. Please ensure your business meets the requirements of all federal, state, and local laws, regulations, or ordinances related to workplace safety.

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