Do employers have to insure workers in other states?
When vast numbers of employees began working from home five years ago, only a handful of states mandated Paid Family and Medical Leave.
Today, more than a dozen states require most businesses to provide paid family and medical leave for employees. This presents new challenges for HR departments and benefits advisors managing remote or hybrid workforces in these states.
Unlike FMLA, which is a federal law, paid family and medical leave benefits are determined by state legislation.
In most cases, the employee will qualify for PFML in the state where they work, not where the business is located. But, “it’s rarely black and white,” said Sonja Spruiel, VP, business development and underwriting manager at The DBL Center. “There are often gray areas at play.”
In Spite of Return-to-Office, Employees Still Seek Hybrid or Remote Arrangements
Despite the headlines surrounding big players like Amazon and the U.S. Federal Government pushing return-to-office mandates, remote work isn’t going anywhere. Between 2023 and 2025 hybrid job posts increased from 9% to 23%, according to research from Robert Half. Fully remote jobs increased by 5% in that time frame, from 10% to 15%.
Allowing the flexibility of remote work can help employers attract top talent. Robert Half’s Demand for Skilled Talent report revealed that nearly half (48%) of job seekers polled want a hybrid job, while more than one-quarter (26%) prefer a fully remote position.
In spite of the advantages and arguments in favor of remote work, employers need to understand the ramifications when it comes to employee benefits.
Employee Benefits and Hybrid or Remote Workers
Confusion may arise when hybrid employees split time between two states. This comes up frequently for workers who commute to a neighboring state, such as New York and New Jersey, Connecticut and Massachusetts, or Oregon and Washington. In most cases, the employee will qualify for benefits in the state where they spend more than 50% of their working time.
Benefits management may also be more complicated for employers in states that recently passed a paid family and medical leave act.
For instance, Spruiel shared a situation where a client in New York hired a remote worker based in Colorado. Yet, the client hadn’t registered as a Colorado business. When the worker needed family leave after having a baby, she didn’t qualify in either New York or Colorado.
“New York PFL requires that you work in New York,” Spruiel explained. Because the client hadn’t registered as a Colorado business, the employee wasn’t granted PFML for their home state, either. “The client had to back-file in Colorado and pay all the penalties. All because they weren’t aware of the rules.”
Traveling Workers
Likewise, employers may be confused about Paid Family and Medical Leave for workers who don’t have a specific work location, like truck drivers, flight attendants, and traveling nurses. In these cases, most of the time, the employer would provide benefits based on the state work is directed out of.
For instance, Spruiel said, “If a trucking operation is based in Maryland, but the truckers live in Virginia and travel across the U.S, their work is being directed out of Maryland. The employer could be required to cover the employees under Maryland paid family leave laws.”
Next Steps for Brokers
As more states institute paid family and medical leave laws, it’s important for insurance brokers to be prepared to educate their clients. Brokers can start by running a risk analysis. Ask where employees are based so that no one slips through the cracks. This is especially important for businesses that employ remote workers.
“When remote work became so popular, the majority of employers did not consider work state coding,” Spruiel said. Neglecting to provide employees with the right benefits, however, can be a costly mistake.
Because rules vary widely, our brokers can rely on The DBL Center for guidance. “It really comes down to having someone who understands the rules and can make the phone calls to get answers if there’s any confusion,” Spruiel said. “The DBL Center team can look at a company’s unique situation and what states the business has workers and what the requirements are for those states.”
FAQs
Are remote employees eligible for MA PFML?
Remote employees who work in the state of Massachusetts may qualify for paid family and medical leave under the state’s laws. Business owners can choose to privatize PFML to take advantage of better service and potentially lower premiums.
Does MA PFML cover out of state employees?
MA PFML covers employees who work in Massachusetts, even if they live in a different state.
Is Paid Family Leave in all states?
As of March 2025, thirteen states and Washington D.C. have passed paid (medical/disability), family leave or paid family and medical leave laws. There is no federal requirement mandating that employers provide paid family leave. Employees may qualify for unpaid job protection under the Family Medical Leave Act (FMLA), which is a federal law.
