In today’s remote-first world, it’s not uncommon to have a rockstar employee living and working halfway across the globe. But if you’ve got a U.S. employee working abroad — even if they’re doing the same job they’ve always done from the comfort of a Croatian Airbnb — you might be wondering: are we still covered under our workers’ comp policy?
Here’s the short answer: no.
Most domestic workers’ compensation policies stop at the border. If you have a W-2 employee living or traveling internationally for work, you’ll likely need a special type of coverage called Foreign Voluntary Workers’ Compensation (FVWC).
What Is FVWC, and Why Might You Need It?
Foreign Voluntary Workers’ Comp is designed to fill the gap when U.S. employees are working outside the country. It extends the same types of protection as your standard work comp policy — things like medical expenses, wage replacement, and disability benefits — to employees who are living or traveling internationally for work.
Even if the job is low-risk (think software development or marketing strategy), things can still happen. If you don’t carry FVWC, your business is essentially self-insuring. That means you’d be financially responsible if your employee was injured or fell ill while working abroad.
Is FVWC Required?
Not always. If your employee is a U.S. citizen working remotely overseas with no physical business presence or operations in the foreign country, FVWC is typically optional. But “optional” doesn’t mean “unnecessary.” Some companies carry FVWC simply to eliminate gray areas and ensure they’re not exposed to legal or financial surprises.
When Should You Consider It?
You should take a serious look at FVWC if:
You have a U.S.-based employee living abroad
You want to avoid legal confusion around workers’ comp coverage in foreign jurisdictions
You’re expanding operations or talent acquisition globally
What Does It Cost?
Compared to the potential risk, the cost is surprisingly reasonable. Most policies fall in the low thousands per year per employee, depending on the country, industry, and job role. It’s often well worth it for the peace of mind.
Foreign Workers’ Comp: Quick FAQ
Q: Is FVWC just for long-term international assignments?
No — it can apply even for short-term travel. If an employee is going overseas for a client meeting or conference, a slip-and-fall incident could still result in a coverage gap.
Q: What if the employee is a contractor, not a W-2?
FVWC typically applies to W-2 employees. Independent contractors aren’t covered unless you specifically structure the policy to include them, which is less common.
Q: Is this the same thing as Defense Base Act coverage?
Not quite. The Defense Base Act is a federal requirement for contractors working on U.S. government contracts overseas. FVWC is voluntary and applies to private-sector employees working abroad.
Q: What happens if we don’t get it?
If something goes wrong, you’re on the hook. You’d be responsible for the employee’s medical expenses, disability payments, or legal liabilities — out of pocket.
Have someone overseas — or planning to? Let’s talk through the options. Foreign Voluntary Workers’ Comp isn’t a legal must-have in every situation, but it might just be a smart move for your team. Get in touch with us and we’ll help you weigh your risks and make the best call for your business.
