New Emergency Law Passed by California Governor Which Provides for Worker’s Compensation Liability When Workers Get COVID-19

Author: Regina Silva

June 9, 2020 9:00am

On May 6, 2020, Governor Newsom issued Executive Order N-62-20 which provides that any COVID-19-related illness of a worker shall be PRESUMED to arise out of and in the “course of the employment for purposes of awarding worker’s compensation benefits” if specific requirements have been met.

The specific requirements are as follows:

  1. The worker tested positive for COVID-19 within 14 days after a day that the worker performed work for the employer at the workplace
  2. The date in which the work was performed by the worker was on or after March 19, 2020
  3. The diagnosis of COVID-19 was by a CA licensed doctor, and the diagnosis was confirmed by further testing within 30 days of the date of the diagnosis.

The presumption applies to dates of injury occurring through 60 days following the date of the Order.  As such, the presumption will apply through July 5, 2020.

The law also states that the presumption will NOT apply if the worker contracts COVID-19 while they were working from home.

The law further states that the presumption is disputable and may be controverted by “other evidence.”  But, if the presumption is not controverted, the Worker’s Compensation Appeals Board is bound to find in accordance with the presumption.

In addition, if liability for a COVID-19 related illness is not rejected within 30 days after the date the worker’s comp claim form was filed, the illness shall be presumed to be compensable, unless rebutted by evidence only discovered subsequent to the 30-day period.  (Generally, the timeframe for insurers to make the compensability decision is 90 days).  As such, employers will need to act quickly to provide the “other evidence” to rebut the presumption, and will be prevented from submitting evidence after the initial 30-day period unless the evidence was only discovered after that time frame.

Once the COVID-19 claim is accepted, the worker will be eligible to receive all benefits applicable under the worker’s comp laws, including full hospital, surgical, medical treatment, disability indemnity, and even death benefits (although death benefits do not get paid when there are no dependents).

The law further provides that when a worker had already been paid sick leave benefits available in response to COVID-19, those benefits are to be used and exhausted before any temporary disability benefits or other worker’s comp benefits are due and payable.  By the same token, if there are no COVID-19 sick leave benefits available to the worker, then the worker shall be provided temporary disability benefits or other worker’s comp benefits from the date their disability began.  In other words, there is no waiting period that a worker has to wait in order to have to receive these benefits.  Moreover, in order for the worker to receive the temporary disability or other worker’s comp benefit payments, they must provide certification supporting the temporary disability within 15 days after the initial diagnosis, and/or following the date of the Order (if the worker tested was diagnosed prior to the date of the Order), and then continue to provide certification every 15 days thereafter for the first 45 days following diagnosis. (Notably, the general rule provided that the certification be provided every 45 days).

This Order applies to all worker’s comp insurance carriers who write policies that provide coverage in California, to self-insured employers, and any other employer carrying its own risks, including the State of California.   The Order also permits an insurance carrier to adjust the “costs” of their policies per authority.

The Administrative Director of the Division of Worker’s Compensation is also authorized to adopt, amend, or repeal any regulations as necessary in order to implement this Order.

Notably, a number of other states have also amended their worker’s compensation rules to provide for a rebuttable presumption for those workers who contract COVID-19, but a majority of the states have limited the application to those workers providing primary care, such as nurses, doctors, and law enforcement.

It is anticipated that there may be challenges to this new law, but the challenges will have to be submitted quickly given the fast turnaround for providing of benefits.

It will also remain to be seen what happens in the context of employment-related litigation cases that are filed in connection with claims for negligence or other claimed violations due to an employee contracting COVID-19 given the worker’s comp exclusivity law.  The Worker’s Comp exclusivity provision preempts injuries that are either collateral or derive from a compensable workplace injury.  This includes additional or aggravated injuries that stem from conduct.  (See, e.g., King v. CompPartners (2018) 5 Cal. 1039.)

What does this new law mean for employers?

Likely, workers who are currently working at their employer’s workplace, or returning to work before July 5, 2020, and who contract COVID-19, will be presumed to have contracted the virus while at work.  Having to submit “other evidence” to rebut this presumption puts a high burden on an employer, and it will be difficult to meet that burden given the highly contagious nature of COVID-19.  So, unless there is clear evidence that the worker was exposed at home to the virus, or in direct contact with someone outside work who contracted the virus, liability will be on the employer.

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