Workers’ Compensation and Covid-19: How to Mitigate Risk

In these unprecedented times, staffing companies have a very unique and hugely beneficial role to fill. Many essential industries like grocery, fulfillment centers, distribution, and companies that transport goods are experiencing a nearly immediate increase in demand for their services, resulting in a hiring surge. Staffing companies are tasked with the important job of filling these positions quickly.

While we understand many industries have ceased operations temporarily (hospitality, tourism, restaurant, etc) we expect the staffing industry will be one of the first industries to make a quick rebound once the economy begins to open back up. For those staffing companies that are hiring right now, there are several things to consider to reduce risk with your employees and workers’ compensation claims related to Covid-19:

1. Know what is considered a compensable claim. In many jurisdictions, anyone in a first-responder or healthcare role who contracts Covid-19 may be covered under workers’ comp. This is called a “presumption of coverage.” Regardless of where the employee contracted the virus, it will be presumed they contracted it through the workplace. A more common virus or disease, such as the seasonal flu, would be handled differently and employees would have to prove they caught it and had more exposure through work than the general population exposure.

2. Keep up with each state’s rules. Some states have implemented emergency measures requiring that all essential workers are covered under workers’ comp for Covid-19 illness — including grocery store employees, pharmacists, transportation workers, etc. In these states, it is presumed that an essential employee who tests positive for Covid-19 caught it at work. This is crucial to know, and these laws change daily. To monitor each state’s rules and bills, the National Council on Compensation Insurance (NCCI), maintains a weekly update for each state. This is critical because if your company is placing people in an essential business, you need to understand specific state laws. We will likely see a standardization in the next month where states adopt each other’s language to have a more uniform policy.

PREMIUM CONTENT: Disaster Recovery Business Process Continuity Guidance for Staffing Firms

3. Check if there were any positive cases at the company you’re hiring for. At the onset of working with a company, get to know if they have had any positive or presumptive positive cases. It is best to get this information confirmed in writing. If it is a nursing home or a manufacturing facility, and there has been an outbreak, this may be reported in the news. Some of the questions carriers have been asking are: Are there any active Covid-19 cases? Why does the company need workers? Find out if it is because they have positive cases.

4. Understand the company’s policies for preventing the spread of Covid-19. Ask questions of the company: What procedures do you have in place to limit exposure to sick people? Are you taking employee’s temperature? Do you have 10 or fewer employees working together? How are you able to manage distances between employees? Staffing companies need to understand what the procedures are before placing employees in harm’s way. Do they provide the appropriate PPEs? If you’re staffing front-line or essential workers and not supplying with proper PPEs or verifying they have PPE, that is a risk as the staffing company bears ultimate responsibility.

There are many different situations for staffing companies to consider, especially as some states and then various types of businesses begin to slowly reopen. This presents only a sample of some possible lines of inquiry.

It’s important to remember you want to minimize the risk to your company and not put your employees in harm’s way. We recommend following the CDC guidelines as well as your state’s government agencies who are providing specific guidelines for reopening for business.


Blake Souers

Blake Souers
Blake Souers is chief underwriting officer for Bradenton, FL-based SUNZ Insurance, which provides workers’ compensation insurance for staffing companies, PEOs and large companies.

Blake Souers

Share This Post


Recent Articles

Powered by ·