Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
Dear Littler: Thank you for answering our question last month about what wage and hour issues we needed to consider for our “wandering worker” who moved to North Dakota and wants to continue remote work. Of course, now that that issue is resolved, we have another question for you.
Our small, Texas-based company has now grown to 62 employees and we’re still growing! We hired Terry Traveler about nine months ago and he has been an amazing employee with a skill set and work ethic we just can’t do without. Unfortunately, Terry is not well – he was just diagnosed with a medical condition. This diagnosis and the pandemic, as well as Terry’s recent viewing of the movie Nomadland have made him realize life is short and that he wants to travel the United States in his RV. He plans to spend the summer of 2021 in sunny Florida, the fall in lovely Massachusetts to watch the leaves turn, and then the winter with his extended family in New Jersey, starting right after Thanksgiving. Terry plans to continue to work full time from his RV while living in and visiting all these locales.
We have the wage and hour issues covered after reading your response to our last question (Terry would be considered a bona fide exempt employee in all three states). And we know there are tax issues we’ll ask more about in a separate question. What we’re worried about is Terry’s benefits – we want to make sure he gets all the benefits to which he is entitled, but what we don’t know is the following:
- Would Terry be able to use our Texas-based health insurance if he needs to see a physician while living and working in another state?
- What if he gets injured while driving his RV? Would that be considered a workplace injury covered by workers’ compensation insurance since it’s also where he works?
- What about FMLA? Would he be covered if he’s working more than 75 miles from our home office in Texas and needs time off?
- What about any state leave laws – would they apply?
- Can we continue applying our normal Texas-based sick-leave policy of three days per year when he’s not working in Texas?
We’ve never had an employee want to move around so much, and while Terry’s job can be completed remotely, it’s making us nervous. What can we do to protect Terry as well as ourselves?
— Worried & Wondering About Terry Traveler
Dear Worried & Wondering,
We completely understand your trepidation and hope to give you some guideposts to help Terry on his journey. Terry is moving around a lot and, as we said in part 1 of this series, the first rule of thumb for legal compliance with employees working at remote worksites (i.e., wandering workers) is “location, location, location.” The law that applies to a person’s work will most likely be the law of the jurisdiction where that person is working – even if the employer is located elsewhere. That said, the issues surrounding Terry’s travels are not insurmountable, but may require a little more time and expense to ensure compliance.
We should start with the health insurance question. Health insurance coverage is typically limited to the plan’s network of “preferred” or “in-network” providers. Otherwise, an employee will pay the provider’s full rate or an out-of-network rate (if there is any out-of-network coverage at all in the plan) if they see a provider who is not considered “in network.” Most health insurance plans only have “preferred” or “in-network” providers located in the state in which the plan was purchased or originated. The good news: all health insurance plans cover emergency services at any hospital in the United States, so if Terry has an emergency, he should be covered. The bad news is that if Terry’s health condition requires regular medical care or he suffers a “non-emergency,” he may not be fully covered. One option is to call your broker and see if you can find a multi-state plan (or MSP) that will cover Terry in the states he plans to visit.
Workers’ compensation insurance typically will apply in states where the employer is physically located. When a worker travels to another state, the worker falls under the jurisdiction of a different, yet fundamentally similar, workers’ compensation system. Many states, including Texas, have reciprocal agreements with other states allowing workers to be covered under their home state’s workers’ compensation law if they are injured in another state so this shouldn’t be an issue, but we recommend you consult with your insurance broker and review the state programs to make sure.
In general, an employee’s injury or illness is compensable under workers’ compensation only if it “arises out of and in the course of employment,” regardless of where the injury occurs. Hence, even though Terry’s RV is his remote work location, if Terry gets into a car accident while driving his RV, it likely won’t be a covered compensable injury because driving is not part of Terry’s job duties and he would not be traveling at the behest of the employer. On the other hand, if Terry slips and falls in his RV on the way to the bathroom during his working hours, that slight deviation may be considered “in the course of” his employment and present a covered claim.
If Terry is seriously injured or requires time off from work for his own serious health condition, he would likely be covered by the Family and Medical Leave Act (FMLA). An employee who works remotely (75 miles or more from the employer's office) is covered under the FMLA if the office to which the employee reports and from which assignments are made has 50 or more employees working within 75 miles of its location. Your Texas office would qualify, to the extent Terry still reports there and receives his work from there. The applicable regulation says: "An employee's personal residence is not a worksite in the case of employees, such as salespersons, who travel a sales territory and who generally leave to work and return from work to their personal residence, or employees who work at home, as under the concept of flexiplace or telecommuting. Rather, their worksite is the office to which they report and from which assignments are made." Hence, the location of Terry’s RV at the time he may need FMLA leave is not his work location for purposes of the FMLA, and Terry would likely be eligible for FMLA leave if he meets all the other FMLA requirements.
Terry also may be covered by state leave laws, should a covered event occur. For example, Massachusetts has a Paid Family Medical Leave Act (PFML). Unlike FMLA, to be eligible to receive paid leave under PFML, a worker only must have earned at least $5,400 in the previous 12 months. PFML eligibility is not dependent on how long an individual has worked for a current employer – it applies to all W-2 employees working in Massachusetts (which Terry may be for the part of the year that he is working in Massachusetts). If Terry falls ill after earning more than $5,400 as a Massachusetts employee, he may be covered, and you may be required to withhold pay from his paycheck to fund this benefit. Similarly, New Jersey’s Family Leave Act (NJFLA) applies to employers of 30 or more employees anywhere in the world and employees working in New Jersey who have been employed by the employer for at least one year and have worked at least 1,000 hours in the past 12 months. NJFLA allows up to 12 weeks off for an employee to, among other things, bond with a new child or care for a covered family member, but does not apply to one’s own disability or injury. Therefore, if Terry falls ill while in Massachusetts and uses his 12 weeks of FMLA leave and Massachusetts PFML for his own illness, when he arrives in New Jersey in November, he may have up to 12 weeks of time off still available to him under the NJFLA if his mother falls ill and he needs to care for her. He also may be eligible for New Jersey Family Leave insurance benefits through the state, and you may need to fund such benefits as well. Payroll should be able to make these adjustments to his locations as Terry changes places.
Finally, with three days of paid sick time per year, you may not be offering Terry enough paid sick time to comply with Massachusetts or New Jersey state law. Massachusetts and New Jersey each requires paid sick time to be provided at a rate of one hour of paid sick time for every 30 hours worked, up to 40 hours each year. Terry’s accrual of three days per year would not be sufficient to meet the requirements of the law, if he worked full time.
The most important thing is to make sure Terry keeps you informed every time he starts working in another state. With a little pre-planning and a few key policies and procedures in place, Terry can be on his way in no time!1
Stay tuned for our next installment, where we will address other thorny employment law issues arising from the Wandering Worker.
1 Littler’s Remote Work Package for Employers is a great place to start; it includes a model policy and model agreement. Click here for more information.