Policy Name:	Multistate Jurisdiction Payroll and Coverage
Policy #:	EP-18-01
Code/Rule Reference	ORC 4123.01(M)(2), 4123.29 (A)(2)(c),  4123.292, 4123.54(H)(1), and 4141.01; OAC 4123-14-06, 4123-17-14, 4123-17-23, and 4123-17-24.
Effective Date:	July 1, 2020
Approved:	Winnie Warren, Interim Chief of Employer Services
Origin:	Employer Policy
Supersedes:	The Multistate Jurisdiction Payroll and Coverage policy effective July 1, 2015.
History:	The Multistate Jurisdiction Payroll and Coverage policy was revised July 16, 2020; July 22, 2016. Previously, the Interstate Jurisdiction policy was effective from January 1, 2009, to June 30, 2015.
Review Date:	July 1, 2025

 

 

I.      Policy Purpose

 

The Bureau of Workers’ Compensation (BWC) provides guidance in applying the laws and rules on payroll reporting of Ohio employers with employees performing temporary duties outside Ohio and to out-of-state employers on determining when Ohio coverage is required.

 

II.    Applicability

 

This policy applies to BWC Underwriting and Premium Audit, Other States Coverage, employers, and their authorized representatives.

 

III.   Definitions

A.    Extraterritorial Coverage: Ohio workers’ compensation coverage for an Ohio employee who is injured while temporarily performing duties outside the state; or, the recognition of another state’s coverage for a non-Ohio employee who is temporarily working in Ohio.

B.    Non-Ohio coverage: Workers’ compensation coverage obtained by an Ohio employer from a private or state-run insurance carrier in another state.

C.   Payments due BWC: Any premiums, administrative costs, assessments, penalties or monies otherwise due to any fund administered by BWC for which the employer has not submitted a dispute of the obligation to the bureau's adjudicating committee as set forth in OAC rule 4123-14-06.

D.   Payroll or wages: Amounts paid by an employer to employees in the employer's service for the applicable period; includes remuneration.

E.    Remuneration: Generally speaking has the same meaning as defined in ORC division (H) of section 4141.01 which includes all compensation for personal services, including commissions and bonuses, and the cash value of all compensation in any medium other than cash.

1.    Use of this definition in no way obligates BWC to follow payroll reporting requirements, or the methodology to determine employee status, used by Ohio Jobs and Family Services. (ODJFS).

2.    For employees who usually receive tips or gratuities, remuneration includes all actual wages paid, and all tips, to the extent they are used to supplement federal minimum wage requirements.

F.    True-up: Annual reconciliation of estimated payroll and actual payroll. All employers must file annual payroll electronically after the conclusion of the policy year. BWC calculates any premium obligation or credit for the completed policy year. Employers must pay any premium obligation due at the time of reporting or by the established reporting due date.

IV.  Policy

A.    Location of Employment and Injury.

1.    Ohio workers’ compensation coverage is required for employees hired to work specifically in Ohio, regardless of where the contracts of hire were entered. Payroll for such employees shall be used to calculate estimated annual premium (EAP) and the actual payroll reported in True-up.

2.    Although Ohio extraterritorial coverage will respond to an injury, wherever such injury has occurred, this insurance may not constitute compliance with the laws of another state and does not supersede the jurisdictional requirements of the state in which the injury takes place. 

B.    Payroll.

1.    Ohio Supervising Office. The payroll of employees whose employment involves activities both inside and outside Ohio, and where the supervising office of the employer is located in Ohio, shall be used to calculate the employer’s Ohio EAP.

a.    An employer may elect to obtain other-states' coverage under ORC section 4123.292 directly through an other-states insurer.

b.    If such election is made, the employer shall include in True-up only the payroll for work the employees perform in Ohio, and other work not covered by the other-states' coverage, as set forth in OAC rule 4123-17-14(I).

2.    Payroll involving transitory services in interstate commerce. The payroll of employees of out-of-state employers, who have entered into a contract of employment outside of Ohio to perform transitory services in interstate commerce only, both inside and outside of the boundaries of Ohio, shall not be used to calculate Ohio EAP and shall not be included in the actual payroll reported in True-up.

3.    Out-of-state employees working temporarily in Ohio. BWC recognizes the extraterritorial workers' compensation insurance coverage of an out-of-state employer for its regular employees who are residents of a state other than Ohio while temporarily performing work in the state of Ohio.  The payroll of employees temporarily working in Ohio shall not be used to calculate Ohio EAP and shall not be included in the actual payroll reported in True-up.

a.    Ohio law recognizes the extraterritorial coverage of an out-of-state employer for a temporary period not to exceed ninety (90) consecutive calendar days. Multiple temporary periods with each exposure less than ninety-one (91) calendar days in duration are distinct temporary periods.

b.    If a temporary period exceeds ninety (90) consecutive calendar days, the out-of-state employer shall include in the Ohio actual payroll reported in True-up the payroll for work an employee performed in Ohio beyond that ninety (90) day period.

c.     The ninety (90) day exemption is not applicable to residents of a foreign country. Payroll for foreign employees working temporarily in Ohio shall be used to calculate Ohio EAP and the actual payroll reported in True-up.

C.   Election to Obtain Non-Ohio Coverage for Employees Working Outside of Ohio.

1.    Ohio law allows employers to obtain coverage in other states, in addition to their Ohio coverage, to cover employees who perform work outside of Ohio on a temporary basis.

2.    An employer electing non-Ohio coverage must file a completed Notice of Election to Obtain Coverage from Other States for Employees Working Outside of Ohio (U-131) form with BWC.

a.    The employer must include a copy of the insurance policy issued by the insurer from the other state with the U-131 that is submitted to BWC.

b.    Both documents must be mailed to: BWC Policy Processing Department, 30 W. Spring St., 22nd Floor, Columbus, OH 43215.

3.    Division of payroll and premium payment requirements.

a.    The employer must report payroll to BWC for work done outside of Ohio and covered under the employer’s non-Ohio coverage. The employer must use the online Payroll reports service offering on BWC’s website. This reporting is for record-keeping purposes only, subject to the exception set forth in section IV.C.4.

b.    The employer must report payroll and pay premium to BWC for all work its employees do in Ohio. See the Prospective Billing Installment Payments and Payroll True-Up policies for additional information.

4.    If an employer fails to pay premium for its non-Ohio coverage, BWC considers the employer noncompliant for the purposes of having non-Ohio coverage. BWC then calculates the employer’s premium according to Ohio workers’ compensation law using both the payroll reportable to Ohio and the non-Ohio coverage insurers.

5.    An employer may obtain coverage in other states through BWC. See the Other States Coverage Policy (OSCP) for additional information. Additionally, the U-131 form to report out of state payroll is not required for an OSCP through BWC.

D.   Resolution of Complaints.

1.    Employer complaints are processed under the General Employer Complaint Policy.

2.    BWC has not identified any extenuating circumstances that apply to Multistate Jurisdiction Payroll and Coverage Issues.