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Making Sense Of The Worker’s Comp Conundrum

Making Sense Of The Worker’s Comp Conundrum

Workers compensation is an essential factor in running any business, yet what that means on a state-by-state basis is not entirely clear. As The National Conference of State Legislatures research highlights, quite literally every state has a new standard of law making its way through the halls of power in response to the health and safety demands being placed on businesses. Some are enabled; and some just proposed; but regardless, the law varies wildly from state to state, and that can make it hard to adapt. For entrepreneurs, looking at the states with the strongest workforces – Texas, Colorado and Virginia – can help to assess the lay of the land.

Texas’ rules

Texas is the number one state in the country for businesses when it comes to the availability of workforce, according to CNBC, but it also happens to have one of the more complex legal climates to boot. Texas is, of course, well known for its individualist traditions and this impacts on law-making. The employee is typically liable for their protection in many issues, and personal responsibility is factored in heavily. Texas workers comp laws dovetail with this quite explicitly – it’s the only state where you are not required to provide private works comp. This must be communicated to the employee prior to hiring, and can present an opportunity for businesses to reduce overheads – but can also make the hiring process more complex.

Colorado’s two-man rules

Conversely to Texas, Colorado and its burgeoning workforce does demand workers comp. This is effective for any business with two or more employees according to the Colorado Department of Labor and Employment. Where it meets with Texas rules is in how you can obtain cover – you can either obtain private insurance or, if you meet certain income criteria, self-insure. Either way, the cover must be in place to avoid fines and other punishments arising from non-compliance.

Working in Virginia

Virginia, in a similar vein to Colorado, demands workers comp for any business with three or more full time employees. However, Virginia has rocked the boat in the provision and enforcement of their news laws. As the Virginia Mercury asserts, legal battles are already underway over provisions within their workers comp bill, and specifically with regards to how the state treats COVID-19 cases. As a result, it’s not quite as clear as to exactly what burdens a business will be expected to undertake. In the simplest terms, however, the state is clear – workers compensation for any business with three or more employees, on that same private or self-insured basis. This works to protect Virginia’s workforce which has contributed to making the state the best place in the USA to do business.

Getting your head around what the various statutes and rules of each state demand in regards to workers comp is crucial in the age of remote working and COVID-19. Businesses have to provide a certain level of assurance, and that will protect them from issues down the line.

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