By Melanie English, Underwriter / LPT Program Manager

The MTM Underwriting and Marketing Departments regularly receive inquiries about Workers’ Compensation coverage for our Member’s out-of-state employees. Often it is because a Member has hired a salesperson, clerical staff or installers who work in other states or an acquired out-of-state facility. Due to an increase in these inquiries, we thought it was a good time to update you on the out-of-state coverage requirements.

Your MTM policy covers all Michigan employees. This coverage follows a Michigan employee when they work temporarily at an out-of-state location or even at a worksite out of the country. This means that if your employee attends a convention in California, your MTM Michigan coverage follows them there. If you send your employee to another country for work, coverage also exists. Any temporary work assignment for a Michigan employee, even worldwide, is covered by your MTM policy. The requirements are that they be a Michigan employee, which means they normally work, were hired, and get paid in Michigan. They must also have Michigan State income taxes deducted from their salary. Your Michigan employee can even live in another state, but be hired to work at your Michigan location and have Michigan taxes taken out of their paycheck. We frequently see a resident of Ohio, who drives to work at a Michigan plant.

Alternatively, if a Michigan employer hires a salesperson in Ohio and the employee’s main reporting office is in Ohio and the employer deducts Ohio state taxes from the employees check, then they are an Ohio employee. This would apply whether the remote employee was in Ohio, West Virginia, Florida or any other state. The requirements are where is the employee’s normal work site located, and, in today’s world, that sometimes is at their home. Another key is where do they pay their state income tax.

Workers’ compensation coverage is governed by state law, which means the coverage rules change from state to state. Because of our close proximity to Ohio, it is the most frequently asked about state by our Members. Ohio is different from Michigan in that all workers’ compensation coverage is required to be purchased from a state agency, called Ohio Bureau of Workers’ Compensation (BWC). Private insurance carriers are not allowed to provide coverage in Ohio. In the insurance world, Ohio is called a monopolistic coverage state. The other monopolistic states that require workers’ compensation insurance to be provided exclusively by a state fund are Wyoming, Washington State, and North Dakota.

Using the information above, shows that if an employee lives in Toledo, but works at a plant in Detroit and has Michigan taxes taken out of their paycheck, they are a Michigan employee. However, if the employee is hired in Ohio, works in Ohio and has Ohio income tax taken out of their paycheck, then workers’ compensation coverage is needed from the State of Ohio. I have listed the BWC link at the end of this article.

The MTM Marketing Department is well versed on out-ofstate coverage. It is complicated and varies by state, but know that the MTM Marketing staff is ready to provide guidance if needed. Please, contact our Marketing Department at 248- 715-0012 or sales@mtmic.com.

https://info.bwc.ohio.gov/for-employers/workers-compensation-coverage