He definitely is a skeleton - at least Elsa doesn't ask whether Papyrus is a human or not. That question gets to be a bit taxing. Still, Sans sounds a bit troubled about the whole thing, even if he's trying to play it off as something relatively positive.

"He's a janitor, around here," he explains, with a bit of humour. "Which... when you meet him, you'll probably get why." He drinks more tea, contemplative. "...It's all gotten pretty complicated, though. In a bad way."

The last part is added tentatively, because he's not sure he wants to bring it up. It's been such a shitshow, though. He doesn't know what to do with himself.