Workers compensation jurisdiction: injury in one state, employment in another

If a worker is employed in one state but suffers an on-the-job injury in another state, under which state would benefits be paid? This is a question that frequently surfaces, particularly with today's often-mobile work force. As with many things in workers comp, it can be confusing for employers and injured workers alike, and the difference in benefits from state to state can be significant.

Remember, there is no one national law for workers comp - state law prevails. Each state has a different level of benefits. Maximum weekly benefits for temporary total disability range from a scanty $331 a week in Mississippi to a high of $1,103 in Iowa. Federal employees who are covered under the Federal Employee's Compensation Act may be entitled to up to $1596 a week in wage replacement. (Source: DOL)

The vagaries in benefits from one state to another don't stop at wage replacement. Other issues might include whether the employee or the employer can choose the physician, the length of the waiting period before benefits kick in, whether vocational rehabilitation is covered, how long benefits will be paid, survivor benefits in cases of fatalities, etc. The jurisdiction may also have an effect on an employer's immunity from tort action or rights of recovery through subrogation.

Each state treats jurisdictional issues differently. In his September 2000 article for the International Risk Management Institute, Jurisdiction in Workers Compensation Cases, Jim Pocius presents an overview of the topic. Generally, the state where an injury occurred will have jurisdiction; most states will also assume jurisdiction if an employment contract was initiated in that state or when a state is the principal place of employment. In conflicting scenarios, an employee might select the state to file a claim, although the employer might dispute this. In some cases there might be dual jurisdiction with benefits partially paid by each state. (In such cases, there would not be full benefits from each state.)

The claims that resulted from the September 11, 2001 events illustrate many of the jurisdictional complexities that can exist. Many of the deceased or injured workers lived in New Jersey but were employed in New York; other workers were employed by multi-state or multi-global firms. Dual jurisdictional issues were rife. John Gelman and Lewis Heller discuss these issues in some depth in an article entitled World Trade Center Tragedy Creates Complex Workers' Compensation Issues

"Recognizing that employment relationships are becoming more geographically complex as a result of interstate and international relationships, the courts have become increasingly challenged with problems of choice of law. Sometimes the courts have to go beyond the traditional tests (site of injury, site of contract, or site of employment) in order to determine which forum’s law should be applied. The courts have considered fairness to claimants in selecting an applicable law. Two major considerations in NJ are the public policy demand that the injured employee be cared for adequately within the State of NJ and the mandatory nature of workers’ compensation in NJ.

In the case of a work injury with jurisdictional issues, both the injured worker and the employer would do well to examine the relevant states' statutes to review how the law treats jurisdiction, and to review benefits, rights, and responsibilities. Insurance companies do not decide jurisdictional issues. The state authorities that have responsibility for workers compensation issues are the arbiters in matters of jurisdiction, and most governing bodies would heavily weigh issues of fairness to the worker, a principal that is at the heart of all workers compensation statutes.

The Pocius article cited above offers some risk management recommendations for employers and a 1997 article in Rough Notes by LeRoy Utschig discusses extraterritoriality -- coverage of workers who are temporarily employed in other states -- and how this issue should be treated in the declarations page of your policy. (While some of the state particulars in the article may be dated, most of the issues remain the same.) Of course, the best risk management of all would be to ensure that any traveling workers are trained in job safety issues and well versed in any company safety policies and practices.